Expected Contract Value: Quarterback Contract Comparison

Expected Contract Value:  Quarterback Contract Comparison

As a result of the contract extensions signed by Cam Newton and Ryan Tannehill, as well as the ongoing discussion related to the contract negotiations of Russell Wilson, many NFL commentators have recently engaged in an exercise of contract comparison with respect to the largest quarterback contracts signed over the past several years. In terms of methodology, the usual suspects have been well represented: total stated contract amount, average annual value, fully guaranteed money, and three-year payout. But as I have previously explained, none of these metrics are adequate for valuing or comparing contracts.

Expected Contract Value can be used for more accurate contract comparison. As a refresher, the methodology is explained here. Below, I have listed the largest Expected Contract Value totals for quarterback contracts signed following the lockout. Farther down, I have displayed the forecasted likelihoods and the calculations for each contract. As you can see, there isn’t a particularly strong correlation between average annual value and Expected Contract Value, or between fully guaranteed money and Expected Contract Value. A contract’s stated value appears to say the most about its Expected Contract Value, but the hierarchy is still different, and the actual amounts are certainly misleading.

Some have also attempted to incorporate salary cap inflation into the contract comparison analysis, most often by stating the given contract’s average annual value as a percentage of the per-team NFL salary cap of the league year in which the contract was signed. I do not find this to be particularly relevant. First, average annual value assumes that all contract money is equally likely to be earned, and therefore fails to discount for the fact that money in later years of a contract (which often consists of larger salaries) is less likely to be earned than money in earlier years of a contract. Second, the NFL salary cap of a given league year should only be relevant with respect to the money actually earned by a player during that league year. Therefore, we do not need to adjust the average annual value of the contract to account for inflation. Instead, we only need to adjust the payments made to the player in prior league years to translate the contract into 2015 league year dollars. As a result, I have included in the individual charts calculations to adjust pre-2015 payments, and immediately below I show the ranking of inflation-adjusted Expected Contract Value totals.
The numbers are calculated based on the contracts as originally signed, not as they currently stand. For example, the fact that Tony Romo converted base salary into signing bonus in 2014 and 2015 is not considered.   With respect to option bonuses and guaranteed base salary that is not fully guaranteed at signing, the numbers are calculated based on the opportunity that the team has to release the player prior to making the payment or fully guaranteeing the salary. But in subsequent years, the numbers are calculated based on the fact that the amount would have already been paid or guaranteed.

For example, Joe Flacco’s 2014 Save:Avg and Save:Cap are calculated prior to his option bonus being paid, but his 2015 Save:Avg and Save:Cap are calculated subsequent to his option bonus being paid. Alex Smith’s 2015 Save:Avg and Save:Cap are calculated prior to the 2015 base salary becoming fully guaranteed, but his 2016 Save:Avg and Save:Cap are calculated subsequent to the 2016 base salary becoming fully guaranteed, as the guarantee was triggered in 2015.

Some may take exception at the very low probabilities associated with certain contract years of the older quarterbacks (“Only a 7.8% likelihood that Peyton Manning plays out the 2015 season of this contract!”). Please keep in mind that the reason Peyton Manning and Tom Brady have had special careers is because they are the exception to most rules. While they should be celebrated for this, no projection system can be programmed to spot exceptions to rules. They have broken many records precisely because they have survived attrition and randomness and regression to the mean to a greater extent than is reasonable.

On the average, older players lose skill and get injured and choose to retire with greater frequency than younger players. And given that Peyton Manning had just missed an entire season with a serious neck injury at the time he signed his contract, placing an almost 10% likelihood on him playing for $20 million four seasons later actually sounds pretty reasonable. This neck injury is not considered in Expected Contract Value, but it illustrates the types of things that are indirectly included in Expected Contract Value through the 1,000+ inputs.Having said that, I have acknowledged in the past that Expected Contract Value undersells quarterback contracts for premier starters due to positional scarcity and the demonstrably different aging curve that the position enjoys relative to all other non-kicker positions. However, even if quarterback contracts result in Expected Contract Value totals that are smaller than would be accurate relative to other positions, such underestimation is applied equally within the position. As a result, I still think that it is fair to compare quarterback contracts using Expected Contract Value.

QB Expected Contract Value

Player Stated Value Rank AAV Rank Full Guarantee Rank Expected Contract Value
Newton $103,800,000 6 $20,760,000 3 $41,000,000 4 $89,631,502
Rodgers $110,000,000 4 $22,000,000 1 $56,750,000 1 $81,831,100
Flacco $120,600,000 2 $20,100,000 5 $29,000,000 11 $80,829,399
Ryan $103,750,000 7 $20,750,000 4 $42,000,000 2 $71,796,000
Kaepernick $114,000,000 3 $19,000,000 9 $12,973,766 16 $68,984,666
Cutler $126,700,000 1 $18,100,000 10 $38,000,000 7 $63,230,000
Dalton $96,000,000 9 $16,000,000 14 $17,000,000 15 $59,965,097
Romo $108,000,000 5 $18,000,000 11 $40,000,000 5 $59,756,000
Brees $100,000,000 8 $20,000,000 6 $40,000,000 5 $59,474,000
Stafford $53,000,000 16 $17,666,667 12 $41,500,000 3 $59,367,000
Ben R. $87,400,000 11 $21,850,000 2 $31,000,000 10 $58,036,250
Tannehill $77,000,000 13 $19,250,000 7 $21,500,000 12 $55,558,237
Smith $68,000,000 14 $17,000,000 13 $19,000,000 13 $47,221,900
Vick $80,000,000 12 $16,000,000 14 $32,500,000 9 $46,817,000
Brady $57,000,000 15 $11,400,000 16 $33,000,000 8 $37,857,000
Manning $96,000,000 9 $19,200,000 8 $18,000,000 14 $37,431,000

Inflation Adjusted ECV

Player Expected Contract Value Rank Inflation Adjusted ECV
Newton $89,631,502 1 $89,631,502
Rodgers $81,831,100 2 $88,980,895
Flacco $80,829,399 3 $87,328,320
Ryan $71,796,000 4 $77,650,750
Kaepernick $68,984,666 5 $70,060,492
Brees $59,474,000 9 $68,899,849
Romo $59,756,000 8 $65,168,000
Cutler $63,230,000 6 $64,962,500
Stafford $59,367,000 10 $64,718,500
Dalton $59,965,097 7 $61,357,303
Roethlisberger $58,036,250 11 $58,036,250
Tannehill $55,558,237 12 $55,558,237
Vick $46,817,000 14 $54,610,963
Smith $47,221,900 13 $48,684,900
Brady $37,857,000 15 $43,126,000
Manning $37,431,000 16 $42,774,760

Year by Year QB Breakdowns

Cam Newton
Year Salary Expected Outcome Expected Value Adjustment
2015 99.9% $31,000,000
2016 $13,000,000 97.2% $12,636,000 $10,000,000
2017 $13,666,000 89.7% $12,258,402
2018 $15,000,000 71.0% $10,650,000
2019 $16,700,000 47.6% $7,949,200
2020 $19,100,000 26.9% $5,137,900
Subtotal $48,631,502 $41,000,000
Total $89,631,502
 
Year Expected Contract Value Inflation Adjusted ECV
2015 $31,000,000 $31,000,000
2016 $22,636,000 $22,636,000
2017 $12,258,402 $12,258,402
2018 $10,650,000 $10,650,000
2019 $7,949,200 $7,949,200
2020 $5,137,900 $5,137,900
Total: $89,631,502
Ryan Tannehill
Year Salary Expected Outcome Expected Value Adjustment
2015 99.9% $12.160,000
2016 98.0% $9,340,000
2017 $18,000,000 79.2% $14,256,000
2018 $17,500,000 49.5% $8,662,500
2019 $18,750,000 38.9% $7,293,750
2020 $19,522,523 19.7% $3,845,987
Subtotal $34,058,237 $21,500,000
Total $55,558,237
 
Year Expected Contract Value Inflation Adjusted ECV
2015 $12.160,000 $12.160,000
2016 $9,340,000 $9,340,000
2017 $14,256,000 $14,256,000
2018 $8,662,500 $8,662,500
2019 $7,293,750 $7,293,750
2020 $3,845,987 $3,845,987
Total: $55,558,237
Ben Roethlisberger
Year Salary Expected Outcome Expected Value Adjustment
2015 $4,250,000 97.3% $4,135,250 $31,000,000
2016 $17,750,000 70.0% $12,425,000
2017 $12,000,000 49.9% $5,988,000
2018 $17,000,000 17.3% $2,941,000
2019 $17,000,000 9.1% $1,547,000
Subtotal $27,036,250 $31,000,000
Total $58,036,250
 
Year Expected Contract Value Inflation Adjusted ECV
2015 $37,135,250 $37,135,250
2016 $12,425,000 $12,425,000
2017 $5,988,000 $5,988,000
2018 $2,941,000 $2,941,000
2019 $1,547,000 $1,547,000
Total: $58,036,250
Alex Smith
Year Salary Expected Outcome Expected Value Adjustment
2014 99.7% $19,000,000
2015 $12,000,000 81.2% $9,744,000
2016 $14,200,000 86.5% $12,283,000
2017 $13,300,000 28.3% $3,763,900
2018 $17,000,000 14.3% $2,431,000
Subtotal $28,221,900 $19,000,000
Total $47,221,900
 
Year Expected Contract Value Inflation Adjusted ECV
2014 $19,000,000 107.7% $20,463,000
2015 $9,744,000 $9,744,000
2016 $12,283,000 $12,283,000
2017 $3,763,900 $3,763,900
2018 $2,431,000 $2,431,000
Total: $48,684,900
Andy Dalton
Year Salary Expected Outcome Expected Value Adjustment
2014 $1,086,027 99.5% $1,080,597 $17,000,000
2015 $7,200,000 95.4% $6,868,800
2016 $10,700,000 84.8% $9,073,600
2017 $13,300,000 67.3% $8,950,900
2018 $13,900,000 58.6% $8,145,400
2019 $16,200,000 34.5% $5,589,000
2020 $17,700,000 18.4% $3,256,800
Subtotal $42,965,097 $17,000,000
Total $59,965,097
 
Year Expected Contract Value Inflation Adjusted ECV
2014 $18,080,597 107.7% $19,472,803
2015 $6,868,800 $6,868,800
2016 $9,073,600 $9,073,600
2017 $8,950,900 $8,950,900
2018 $8,145,400 $8,145,400
2019 $5,589,000 $5,589,000
2020 $3,256,800 $3,256,800
Total: $61,357,303
Colin Kaepernick
Year Salary Expected Outcome Expected Value Adjustment
2014 $100,000 99.8% $998,000 $12,973,766
2015 $12,800,000 92.5% $11,840,000
2016 $14,300,000 82.2% $11,754,600
2017 $16,900,000 64.9% $10,968,100
2018 $17,400,000 57.2% $9,952,800
2019 $19,200,000 34.5% $6,624,000
2020 $21,400,000 18.1% $3,873,400
Subtotal $56,010,900 $12,973,766
Total $68,984,666
 
Year Expected Contract Value Inflation Adjusted ECV
2014 $13,971,766 107.7% $15,047,592
2015 $11,840,000 $11,840,000
2016 $11,754,600 $11,754,600
2017 $10,968,100 $10,968,100
2018 $9,952,800 $9,952,800
2019 $6,624,000 $6,624,000
2020 $3,873,400 $3,873,400
Total: $70,060,492
Jay Cutler
Year Salary Expected Outcome Expected Value Adjustment
2014 99.4% $22,500,000
2015 94.2% $15,500,000
2016 $16,000,000 80.1% $12,816,000
2017 $15,000,000 31.7% $4,755,000
2018 $16,000,000 25.8% $4,128,000
2019 $20,000,000 11.8% $2,360,000
2020 $21,700,000 5.4% $1,171,800
Subtotal $25,230,000 $38,000,000
Total $63,230,000
 
Year Expected Contract Value Inflation Adjusted ECV
2014 $22,500,000 107.7% $24,232,500
2015 $15,500,000 $15,500,000
2016 $12,816,000 $12,816,000
2017 $4,755,000 $4,755,000
2018 $4,128,000 $4,128,000
2019 $2,360,000 $2,360,000
2020 $1,171,800 $1,171,800
Total: $64,962,500
Matt Ryan
Year Salary Expected Outcome Expected Value Adjustment
2013 99.6% $30,000,000
2014 $21,500,000 94.0% $11,750,000
2015 $11,500,000 94.7% $10,890,500
2016 $15,750,000 61.7% $9,717,750
2017 $15,750,000 37.8% $5,953,500
2018 $19,250,000 18.1% $3,484,250
Subtotal $41,796,000 $30,000,000
Total $71,796,000
 
Year Expected Contract Value Inflation Adjusted ECV
2013 $30,000,000 116.5% $34,950,000
2014 $11,750,000 107.7% $12,654,750
2015 $10,890,500 $10,890,500
2016 $9,717,750 $9,717,750
2017 $5,953,500 $5,953,500
2018 $3,484,250 $3,484,250
Total: $77,650,750
Matthew Stafford
Year Salary Expected Outcome Expected Value Adjustment
2013 100.0% $31,500,000
2014 99.7% $2,000,000
2015 $1,500,000 96.1% $1,441,500 $8,000,000
2016 $17,000,000 57.7% $9,809,000
2017 $16,500,000 40.1% $6,616,500
Subtotal $17,867,000 $41,500,000
Total $59,367,000
 
Year Expected Contract Value Inflation Adjusted ECV
2013 $31,500,000 116.5% $36,697,500
2014 $2,000,000 107.7% $2,154,000
2015 $9,441,500 $9,441,500
2016 $9,809,000 $9,809,000
2017 $6,616,500 $6,616,500
Total: $64,718,500
Aaron Rodgers
Year Salary Expected Outcome Expected Value Adjustment
2013 $500,000 100.0% $500,000 $37,750,000
2014 $1,400,000 99.3% $1,390,200 $9,500,000
2015 $2,100,000 94.1% $1,976,100 $9,500,000
2016 $12,600,000 64.4% $8,114,400
2017 $13,650,000 48.2% $6,579,300
2018 $20,900,000 20.5% $4,284,500
2019 $21,100,000 10.6% $2,236,600
Subtotal $25,081,100 $56,750,000
Total $81,831,100
 
Year Expected Contract Value Inflation Adjusted ECV
2013 $38,250,000 116.5% $44,561,250
2014 $10,890,200 107.7% $11,728,745
2015 $11,476,100 $11,476,100
2016 $8,114,400 $8,114,400
2017 $6,579,300 $6,579,300
2018 $4,284,500 $4,284,500
2019 $2,236,600 $2,236,600
Total: $88,980,895
Tom Brady
Year Salary Expected Outcome Expected Value Adjustment
2013 99.5% $31,000,000
2014 92.3% $2,000,000
2015 $8,000,000 41.5% $3,320,000
2016 $9,000,000 12.3% $1,107,000
2017 $10,000,000 4.3% $430,000
Subtotal $4,857,000 $33,000,000
Total $37,857,000
 
Year Expected Contract Value Inflation Adjusted ECV
2013 $31,000,000 116.5% $36,115,000
2014 $2,000,000 107.7% $2,154,000
2015 $3,320,000 $3,320,000
2016 $1,107,000 $1,107,000
2017 $430,000 $430,000
Total: $43,126,000
Tony Romo
Year Salary Expected Outcome Expected Value Adjustment
2013 99.5% $26,500,000
2014 89.0% $13,500,000
2015 $17,000,000 64.4% $10,948,000
2016 $8,500,000 42.4% $3,604,000
2017 $14,000,000 21.6% $3,024,000
2018 $19,500,000 7.5% $1,462,500
2019 $20,500,000 3.5% $717,500
Subtotal $19,756,000 $40,000,000
Total $59,756,000
 
Year Expected Contract Value Inflation Adjusted ECV
2013 $26,500,000 116.5% $30,872,500
2014 $13,500,000 107.7% $14,539,500
2015 $10,948,000 $10,948,000
2016 $3,604,000 $3,604,000
2017 $3,024,000 $3,024,000
2018 $1,462,500 $1,462,500
2019 $717,500 $717,500
Total: $65,168,000
Joe Flacco
Year Salary Expected Outcome Expected Value Adjustment
2013 $1,000,000 99.9% $999,000 $29,000,000
2014 $21,000,000 95.8% $20,118,000
2015 $11,000,000 90.9% $9,999,999
2016 $18,000,000 59.8% $10,764,000
2017 $20,600,000 31.4% $6,468,400
2018 $20,000,000 17.4% $3,480,000
Subtotal $51,829,399 $29,000,000
Total $80,829,399
 
Year Expected Contract Value Inflation Adjusted ECV
2013 $29,999,000 116.5% $34,948,835
2014 $20,118,000 107.7% $21,667,086
2015 $9,999,999 $9,999,999
2016 $10,764,000 $10,764,000
2017 $6,468,400 $6,468,400
2018 $3,480,000 $3,480,000
Total: $87,328,320
Drew Brees
Year Salary Expected Outcome Expected Value Adjustment
2012 99.5% $40,000,000
2013 $10,000,000 86.4% $8,640,000
2014 $11,000,000 56.7% $6,237,000
2015 $19,000,000 16.3% $3,097,000
2016 $20,000,000 7.5% $1,500,000
Subtotal $19,474,000 $40,000,000
Total $59,474,000
 
Year Expected Contract Value Inflation Adjusted ECV
2012 $40,000,000 118.8% $47,520,000
2013 $8,640,000 116.5% $10,065,600
2014 $6,237,000 107.7% $6,717,249
2015 $3,097,000 $3,097,000
2016 $1,500,000 $1,500,000
Total $68,899,849
Peyton Manning
Year Salary Expected Outcome Expected Value Adjustment
2012 88.0% $18,000,000
2013 $20,000,000 35.4% $7,080,000
2014 $20,000,000 51.4% $10,280,000
2015 $19,000,000 7.8% $1,482,000
2016 $19,000,000 3.1% $589,000
Subtotal $19,431,000 $18,000,000
Total $37,431,000
 
Year Expected Contract Value Inflation Adjusted ECV
2012 $18,000,000 118.8% $21,384,000
2013 $7,080,000 116.5% $8,248,200
2014 10,280,000 107.7% $11,071,560
2015 $1,482,000 $1,482,000
2016 $589,000 $589,000
Total: $42,774,760
Michael Vick
Year Salary Expected Outcome Expected Value Adjustment
2011 99.4% $20,000,000
2012 93.9% $12,500,000
2013 $16,500,000 47.1% $7,771,500
2014 $15,500,000 23.6% $3,658,000
2015 $16,500,000 17.5% $2,887,500
Subtotal $14,317,000 $32,500,000
Total $46,817,000
 
Year Expected Contract Value Inflation Adjusted ECV
2011 $20,000,000 119.4% $23,880,000
2012 $12,500,000 118.8% $14,850,000
2013 $7,771,500 116.5% $9,053,797
2014 $3,658,000 107.7% $3,939,666
2015 $2,887,500 $2,887,500
Total: $54,610,963