Looking at Jamaal Charles’ Contract and Chiefs Salary Cap

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According to KCTV5, Chiefs star running back Jamaal Charles is going to hold out of training camp in the hopes of earning a new contract with the Chiefs.

Charles’ situation is not all that different than the contract situation of Andre Johnson that I have alluded to in the past concerning the disgruntled wide receiver playing for years on an under market contract. Charles was one of the last signings under the old CBA, agreeing to a five year extension worth $27 million in December of 2010. Rather than fighting the uncertainty of the labor situation, Charles agreed to the deal in the midst of a 1,400 yard campaign in lieu of becoming a restricted free agent in 2011 in a very uncertain market.

Though Charles was injured in 2011, it became apparent that if he was healthy he was going to be grossly underpaid by the time 2012 rolled around. Following the mega contracts given to Adrian Peterson, Chris Johnson and, to a lesser extent, Deangelo Williams, a number of players earned massive contracts including Arian Foster, Ray Rice, LeSean McCoy, and Jonathan Stewart.  Foster’s contract had to be a dagger into the back of Charles as Foster was also set to be a restricted free agent when he signed his contract.

The following table presents the financials of the various running backs in the market:

Player APY Guarantee 1 Year Cash 2 Year Cash 3 Year Cash
McCoy $9,000,000 $20,765,000 $11,750,000 $19,750,000 $30,000,000
Foster $8,700,000 $20,750,000 $18,000,000 $23,750,000 $30,000,000
Williams $8,600,000 $21,000,000 $19,500,000 $25,000,000 $30,000,000
Forte $7,600,000 $13,800,000 $9,800,000 $16,100,000 $22,600,000
Lynch $7,500,000 $17,000,000 $10,000,000 $17,000,000 $22,500,000
Stewart $7,300,000 $11,500,000 $9,500,000 $20,000,000 $24,500,000
Rice $7,000,000 $15,000,000 $17,000,000 $25,000,000 $29,000,000
Charles $5,400,000 $8,000,000 $11,600,000 $15,100,000 $18,100,000

The difference between Charles and everyone of his peers is startling. Four players earned $29 million or more in the first three years of their contract. All earned over $22 million. Charles earned $18.1 million.

From a performance standpoint its hard to make an argument that any has been better. When we break things down into dollars per annual contract value its clear who is one of the best bargains in the NFL.

Player Rush Yds Pass Yds Total Yds Tot Yds/APY
McCoy 2,447 912 3,359 $2,679
Foster 1,966 400 2,366 $3,677
Williams 1,580 520 2,100 $4,095
Forte 2,433 934 3,367 $2,257
Lynch 2,847 512 3,359 $2,233
Stewart 516 201 717 $10,181
Rice 1,803 799 2,602 $2,690
Charles 2,796 929 3,725 $1,450

It’s no contest as to who has the greatest team value, which usually means a poor contract for the player.

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Charles is only scheduled to earn $3.9 million this season, which will only further the split between he and the other players. That number ranks 14th in the NFL and is $985,000 less than James Casey will earn as a fullback/tight end for the Eagles. Casey played about 14% of the offensive snaps for the Eagles last season. Other players earning more include a seemingly washed up Chris Johnson ($4M from the Jets in free agency), Toby Gerhart ($4.3M in free agency from the Jaguars), and Donald Brown ($4M in free agency from the Chargers). In 2015 Charles salary will jump to $6 million, none of which is guaranteed in the event of an injury.

Charles is hitting the age where the declines in production often come fast and so does the decline in salary, a topic we touched on with Marshawn Lynch a few weeks ago. That kind of makes this his last opportunity to likely gain some leverage since his performance has been so good and he is the best offensive player on the team. Charles is currently the 8th highest paid player on the Chiefs.

Charles does not have as much to lose as some other player. While he does have a $1 million reporting bonus in his contract, he does not have any signing bonus money that can be forfeited. Charles had received a roster bonus in 2010 that is prorated like a signing bonus but does not count in the forfeiture equation. Players can also hold out for five days without real penalty. So this may turn out to be much ado about nothing.

For the Chiefs this is just another in a long line of players who are looking for new contracts from a team that really has very little cap room to be able to accommodate them all. Kansas City went on a spending spree of sorts in 2012 and Dwayne Bowe receiving a deal worth $11.2 million a season likely sets an expectation that the Chiefs should pay their perceived high end player, top end money.

In addition to Charles looking for a new contract, quarterback Alex Smith and pass rusher Justin Houston are both in the final year of their contracts and expecting new contracts. Kansas City has $10 million of cap room left for this season and already has $126 million committed to the 2015 salary cap. Smith is likely seeking around $18 million a season and Houston in the ballpark of $10 million. That makes for a very complex series of negotiations if the Chiefs want to keep this team together in hopes of making a long term contender rather than a one season surprise in the playoffs. It is one of the most delicate situations in the NFL and the news about Charles makes it that harder. Over the next few weeks we will see if the Chiefs are up to the task.

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