The Raiders Contracts
2016 was the first offseason where the Raiders really went on a spending spree in free agency. In the past they had been volume shoppers, with arguably just one expensive signing in Rodney Hudson in 2015. Because of the Raiders history and the all cash concepts they use they are still overpaying to bring in talent, but they are a more desirable landing spot than in the past when they would have had problems attracting the same players even at these salaries.
The big signings started before the season ended when they signed Michael Crabtree to an $8.5 million per year extension. Crabtree may have been the best available receiver had he made it to free agency if teams had put past concerns about him behind them. They probably overpaid a bit for him but got him on their terms. In the past a player like Crabtree may not have considered re-signing.
Their ambitious approach continues with the signing of Kelechi Osemele at $11.7 million a year to play guard. He earns about $4 million more a season than the next highest paid at his position. They signed cornerback Sean Smith to a $9.5 million per year deal which was probably around market value given that he was the second player signed. Bruce Irvin at $9.25 million was a stunner to me as its a contract clearly based on potential and the feeling Seattle did not use him well. At the end of free agency the Raiders were left with under $10 million in cap room.
Still while the Raiders are slowly creeping into more aggressive spending patterns they only have Osemele over $10 million a year. They are still underinvested at the top of their roster compared to some other teams. But it’s logical to think that all the spending is going to cause problems.
One of the strange things about the NFL is that fans, media, and everyone else begs their teams to spend money in free agency but the minute they do they begin to question “what happens in the future” now that they have spent all this money. For the Raiders that is primarily because of Carr and Mack who will not be bargain signings by any stretch of the imagination.
The Future for Carr and Mack
While both Carr and Mack are extension eligible in January of 2017 it is important to note that the Raiders effectively hold the rights to Carr through 2018 and Mack through 2019. So while I may talk about the Raiders being smart to proactively extend these players in January or February there is no real need for them to do that. Its fantasy GM’ing on my part or anyone else’s that talks about Oakland.
Carr likely stands to earn at least $20 million a season and if the Raiders were to make the playoffs this season I could see his value going over $21 million a year. The Raiders can use the franchise tag on him in 2018 if there were problems coming to an agreement and because they are used to dealing in all cash contracts it would fit right in with their own planning.
Mack will have his 5th year option picked up for 2018 and then could be franchise tagged in 2019. If he plays primarily at linebacker he’ll be able to be exclusive tagged similar to Von Miller in Denver. Mack’s asking price will likely depend on where Miller ends up this season. Suh is still a reach, but with Olivier Vernon finding his way into a $17 million contract, Id imagine Miller will get close to $18 million.
While these sound like massive numbers especially with other contract values creeping upwards it is important to understand the flexibility Oakland has with their roster. Right now we project Oakland to have around $50 million in cap room to work with in 2017 and as we move into 2018 they are in the upper 1/3 of the NFL in projected cap space.
By 2018 the guarantees of all the big signings of this years team are finished and every player if they underperform can be cut with no consequences. While the Raiders will certainly hope all of their players are home runs, history would indicate that at least 2 of the signings may be renegotiated or cut by then. Osemele, Hudson, Crabtree, Irvin, Smith, and Howard make up nearly $50 million of the Raiders cap commitments in 2018. The only cost left on the cap if they cut them all was $1.4 million, a far cry from the mess that occurred in 2013 when cutting all those players meant $55 million in dead money. So there is the ability to create huge sums of cap space when they absolutely need to sign their young stars.
What if those players are all good and you don’t want to release anyone? The Raiders will have the ability to use different structures with Carr and Mack if they desire. Though they have generally dealt in all cash they have used signing bonuses with in-season extensions for players like Marcel Reece and Sebastian Janikowski.
The Raiders could probably present a case that homegrown players who sign early extensions will be able to earn signing bonuses. If the Raiders have to make up cash spending requirements after the season I would actually recommend that with Carr (signing bonuses committed before March of 2017 will count towards the 2013-2016 spending requirements). Because Carr is a quarterback the Raiders can also argue a special exemption just for the quarterback position when it comes to using a signing bonus. Using the signing bonus would give them the ability to defer more cap dollars to the end of the contract life for the players.
In general the Raiders should put Carr on the top of the priority list, especially if it helps drive the price closer to $20 million. Once Carr is signed that completely caps off the value on Mack as a star quarterback is always the highest paid player on the team and rarely does that change. In the vent Miller signs a mega deal in Denver that surpasses Suh, this is the best protection for Oakland.
Regardless the Raiders have eliminated the problems of the past and should not fall into the trap of the past when it is time to deal with these mega contracts.
The Problems of Expectations
This is the first year Oakland will deal with expectations and that can change everything in a hurry. In my opinion I think the Raiders the favorites to win the AFC West and at the worst should be on par with the Chiefs and Broncos. The AFC is still weak overall and there is no reason for Oakland not to be right in the thick of the wildcard chase. Their young core is better than anyone else’s in the conference and Im not sure its even close.
But expectations don’t always equal results. The Raiders are made up of a number of free agents and there is no guarantee how they will gel and if they continue to give the same effort that was given as they were vying for the big contract. The pressure of expectations can sometimes cause performance to suffer especially if a team gets off to a slow start and coaches and players begin to press.
Despite the emergence of Carr and Mack, if the Raiders were to fail to improve over the 7 wins they had last year it would probably be 50/50 that McKenzie is back. Even if he is back once teams get that sense that they are on the cusp of something good sometimes all the common sense and planning in the world goes out the window. Being stuck at 7 to 9 wins is the worst spot for a team because they often make really bad financial decisions trying to make the playoffs.
The Raiders can probably add another player or two next year, but if they are looking at high priced players that will put them in a pinch when it comes to Carr and Mack. At that stage you would be looking at having 6 or 7 players in the $9 million+ mark a year, which is the spot where only teams like the Packers and Seahawks hang out. To do that you have to extend early without question and then begin to face tougher decisions with your young talent coming up through the pipeline. Right now they are in a perfect spot with the top end contracts and they don’t want to send that into a tailspin by having a bad year run them right back into free agency but for even higher priced players.
But it is definitely a fun experiment to watch. The Raiders have been one of the most unique case studies not just in the NFL but perhaps in all of sports. As an outside observer it really feels like taking a franchise from scratch and completely starting over. For teams like the Browns the Raiders maybe show a glimmer of light for the future as the Browns are now occupying the spot the Raiders once held, though without the over the top contracts. For teams constantly fighting with a bad cap situation they should be a cautionary tale of what can happen when you let things spiral out of control and the time it takes to repair that damage. This team should be one of the big stories of 2016, though only time will tell if it is in a good or bad way.
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.