The franchise tag window officially opened on Tuesday and surprisingly the Dolphins are already prepared to place the tag on wide receiver Jarvis Landry. It made for some interesting twitter discussions last night and I thought was worth exploring a little bit further.
In general a franchise tag should be used for three reasons. The first reason is to leverage a young superstar player into a more team friendly contract by preventing the player from truly exploring free agency. The second reason would be if you have a “win now” type of situation and a player you simply can’t afford to lose for this year but are ok with losing in the future. This should apply more to older players looking for a third contract more than a second contract player. In some rare circumstances, and really this only should apply to QBs, it can be used to see a larger sample of a questionable player. If the player doesn’t fit into any of these categories a team really should not use the tag.
Landry puts up great “volume” stats. He is targeted a lot and thus has a bunch of receptions while averaging over 1,000 yards per season in his four year career. However he doesn’t really fit the mold of a game changer, who are the players who typically get hit with the franchise tag.
Receiver is a strange position compared to many others. For one players that are considered stars rarely hit free agency so those who come close to star status (i.e. Mike Wallace a few years back) often cash in. More often than not only number two players hit free agency and this has pressured teams to pay big to retain players who are better than a two but probably not a true one. It is also very difficult to draft talent at the position which leads to the low player churn.
This really became apparent in the last two years which, in my estimation, have thrown the entire market into a state of flux. It began with Allen Hurns signing a contract worth slightly over $10 million a year in 2016 off of one good year. When you took into account for what the Jaguars gave up in that deal it was really more like a $14 million a year contract. That led to Tavon Austin, who had done little in the league except get drafted high, to also sign for more than $10 million a year. The Hurns deal in part led to an extension for Doug Baldwin, on his third contract, that would hit $11.5 million a season, which was nearly met later by Emmanuel Sanders. While Baldwin and Sanders were productive those were both really big numbers for third contract players.
While there could be some arguments made to throw out the Hurns and Austin deals while emphasizing the production of the latter two despite being closer to 30, it likely became impossible to do that after Alshon Jeffery and Davante Adams signed extensions. Jeffery’s last 1,000 yard season came in 2014 when he played 1A to Brandon Marshall. He did score 9 touchdowns this year but had a catch rate below 50% despite a YPC of 13.8, the second lowest of his career. Adams also scored a bunch of touchdowns this year but has never had a 1,000 yard season. Their contracts were for $13 and $14.5 million a year, respectively.
While I think there is a pretty easy argument to be made that Jeffery has tools around the end zone that Landry doesn’t and Adams can score or put a team in a position to score from anywhere on the field it illustrates the way the league has gone. Neither of these players are close to the talent of Dez Bryant, Demaryius Thomas, or AJ Green when they signed their contracts, but they are now in the same ballpark at least on a yearly basis just two years later. The reason why I bring this up is while Landry may not be a superstar I don’t think its also fair to categorize him as a sub $10M receiver like some are doing. That just hasn’t been the way these things have worked and probably won’t until the league reaches a breaking point with big money busts.
But when we are talking a franchise tag we are talking superstars and being lumped in with Adams and Jeffery is not really being considered a superstar. Remember that the superstar status is part of the first scenario requirement for using the tag. That is why I would lean toward the application being a mistake. Here is how things now should, in theory, play out financially.
The tag for Landry is estimated to be $16.3 million a season. That number would be representative of the first year salary for a player earning between $11 and $13 million a season. That sounds reasonable but there is also the benefit for the team that those players are coming in at $25-27 million over two years. How does it work for Landry now?
If Landry signs his tag he locks in his $16.3M for the year. Imagine he still plays at his current level? Based on the current contracts he would be a lock to earn at least the same the following season assuming a weak market when he signs for $12-$13M a season. That brings his two year total up to $32.6 million, which already puts him in the low tier of the $14M types. Another franchise tag brings his total up to $35.9 million, which is now in the higher tier players of Julio Jones and AJ Green. A great year and free agency is going to put him in the DeAndre Hopkins tier for two years.
What if things go bad? In the worst case scenario Landry would fetch number 2 money which is at least $8 million in year 1 salary and potentially more. That brings the two year to $24.3 million or right about where it would be if he agreed to a $12M a year contract now. Really the only negative for Landry in signing the tag would be catastrophic injury as he would likely have over $25 million protected in any extension. So in essence the team is kind of giving up any minor leverage it may have had by trying to argue that the market would come in with the Jeffery contract.
The problem here is that the tag for Landry is pretty much a market or close to market number. This all goes back to the superstar concept and why those are the players you use it on. If we are talking a superstar like a DeAndre Hopkins the tag represents around a $12M loss in value for year 1 (He earned about $28.5M in first year salary compared to what a $16M tag would have netted him had he played 2017 out). Hopkins will earn over $41 million in the first two years of his contract, about $5 million more than he would have earned on two franchise tags. So for Hopkins to outpace a contract signed in 2017 he would have had to make it to market perfectly healthy in 2020 by doing the tag process. Landry only has to get to 2019 on a contract signed in 2018 to basically break even.
Of the positional players in the NFL I currently estimate that 11 signed long term contracts while on the tag. The first column represents what the player would have earned on two franchise tags compared to what they agreed to on a long term contract.
|Player||Two Tags||Two Year Contract||Difference||% Difference|
What’s the main theme here? Almost every one of these players was worth more than what back to back franchise tags would have earned them. The lower you go on the list was probably the more questionable use of the tag. Only two, Pierre-Paul and Glenn, was it probably the wrong use as both came in slightly under. I think Pierre-Paul was an example of extenuating circumstances due to his hand and both sides realizing it would have compromised his chances in free agency.
If we apply the low end numbers we come up with the Dolphins needing to offer a two year salary somewhere around $37.8 million to justify Landry’s status as a “superstar” player. That number is bigger than Adams by nearly $6 million, Julio Jones by about $1 million and AJ Green by $800K. It only trails Hopkins ($41M) and Brown ($44M). Those numbers represent a frontloaded $15.2-$15.5 million per year contract. Even at the Glenn minimum he is going to blow Adams away which should be his best comp. These numbers should also impact any trade possibility if that is what Miami is intending to do since its locked in money before free agency even begins.
Even if they want to do a long term deal scenario 1 really doesn’t apply unless they somehow leverage this back around the Adams cash flows. The fact is if they wanted to sign him long term it should have been done last year early in the season to maximize leverage over a good but not superstar level player.
Does scenario 2 apply to the Dolphins? They won 6 games last year, 10 the year before, and 6 the year before that. I think last year coming off 10 wins with some older guys on defense that they could make the “its now or never” argument. In fact that was really the only logic that should have been used to sign Jay Cutler to not waste a year. But after just 6 wins, only 2 of which came in their last 10 games, I cant see that scenario being viable here either. It’s a team that needs some reworking not a one year $16 million contract for a wide receiver.
So we shall see what happens but I have a feeling at the end of the day we will say that this was the wrong use of the franchise tag at the end of the 2018 season.