Free agency is just about a full week in now and this is about the time that we get the first market reset as the money dries up and teams and agents have to re-evaluate their plan for the upcoming season. Usually most free agent periods have at least three phases. The first phase is the mad rush which sees the biggest players signed to massive contracts in the first 48-72 hours of free agency. Phase II then begins with the mid tier players taking center stage, often getting pretty lucrative terms, and then Phase III where the dynamic changes and more and more bargains are found for teams.
This has been an odd free agency, I guess in part due to the Covid-19 outbreak, where I kind of feel that Phase I barely existed and Phase II was really the start leading for us to immediately jump into Phase III really a few days ago. The amount of massive money deals seems way down. Perhaps that is because more teams used the franchise tag this year, but last year there were 30 non-Qb’s who by this time signed big contracts that averaged at least $10 million a season and 17 making at least $13 million a year. This year the numbers are 27 and just 11.
Contract years are also way down. Last year we had 16 players who made $10 million or more a year that signed for four or more seasons. This year its 7 which means the eye popping numbers we often see in free agency (even if they are just fluff) simply did not exist. Most teams are opting for 2 and 3 year contracts and while the guarantees are high relative to the contract size they are getting some better cash flows on this contracts as it generally costs a team far less over three seasons to reach a $10M APY on a three year deal than on a five year one.
Of course this could be player driven as well with hope to come back into free agency in a few years when the cap is expected to rise. For some that can work out well. For others probably no so much. Those angling for that probably should be doing one or two year contracts as three years in the NFL is an eternity.
Thus far I think this virus outbreak has seemed to change the dynamic of some things related to free agency which may have made it more difficult for some to work with scouts and positional coaches to “work the room” a bit more in regard to contracts. Maybe that has led to some added short term contracts though I think it has impacted those on the lower salary spectrum more than the mid level guys.
Now with the Phase III in full swing there is probably a good deal of soul searching that has to go on. There are still a number of big name free agents out there, the biggest being Jadeveon Clowney. Other names include Robby Anderson, Jason Peters, Everson Griffen, Damon Harrison, Jimmy Smith, Logan Ryan, Dontari Poe, and Ndamukong Suh among others. There are also still a good number of solid, viable contributors who were hoping to get a small piece of the pie but may have to now settle for an even smaller one.
While its not out of the realm of possibility for a team to still make a massive offer for one of the big names the odds are generally against it. Players planning for contracts worth over $25M in guarantees on annual values in excess of $10 million a season will likely need to decide if they want to hold out hope for the money, take a one year team friendly contract and hope to hit it the following year in free agency, or to take a longer term deal that may be 60-75% of what they hoped to get in free agency.
The same holds true for the lower level players who may now be staring at minimum salary contracts as a way to continue their careers and get opportunities for 2021. This group of both expensive and lower cost talent often wind up being the biggest bargains in free agency.
It can certainly be a nerve wracking experience. There are various things that come into play now that did not exist a few weeks ago. Going into the season the average cap space in the NFL was around $40 million per team. It’s now under $20 million per team. Teams have spent millions on other players and may be cash strapped as well as cap strapped.
Many depth charts are filling up and team needs are much less than they were last week. Teams also begin to focus more on the draft at this stage. Why sign a $5 million contract with a third tier receiver or lock into an Anderson at $15 million a year when the draft may be full of receivers that can fill a void. If you miss in the draft odds are there is still going to be a veteran sitting around to sign so teams do not need to rush into anything at this point.
The compensatory process also lasts for a few months. Based on Nicks current work there are 15 teams currently on pace to receive at least one compensatory pick. 10 of those teams have at least one 3rd or 4th round projected compensatory pick. Those teams risk picks with any signing and often wait until the compensatory signing period expires before they go back into free agency.
The NFL is also slowly becoming a trading league. We discussed this possibility in our book a few years ago and its becoming more and more of a thing. It is often cheaper for a team to trade a late pick for someone who had the majority of their contractual guarantee paid by another team than to sign a player for millions, especially if that player may cost the team a comp pick to boot.
Overall the leverage almost completely goes to the team side at this stage often making for some unique contracts and landing spots that people like myself will generally praise as some of the best deals of the offseason even though they are often just a byproduct of circumstance and in some cases pure luck.
For those fans who have been disappointed with free agency so far it is far from over and you may be surprised to see who you wind up with out of the blue in the next few weeks. So let’s watch along and see how it all plays out.
Jason is the founder of OTC and has been studying NFL contracts and the salary cap for over 15 years. Jason has co-authored two books about the NFL, Crunching Numbers and the Drafting Stage, which are widely circulated in the industry and hosts the OTC Podcast. Jason’s work has been featured in various publications including the Sporting News, Sports Illustrated, NFL Network and more. OTC is widely considered the leading authority on contract matters in the NFL.