Looking at Rob Gronkowski’s Contract and Injuries

The NFL can be a funny place. One minute everyone sings your praises and the next everyone questions your future with the team. It happens on all levels from GM to coach to player. Amazingly I saw that talk filter to Rob Gronkowski who has gone through another season of injuries the latest of which landed him on IR for the remainder of the season.  It’s quite the turnaround from last year where many of those same people were saying he deserved a raise for his level of play. I know it’s easy to get caught up in the “Patriot way” of doing business which has seen superstars traded or allowed to walk in free agency without a second thought, but I don’t see that as the case here.

I’ve written or spoken about Gronkowski’s contract a number of times in the past. When the Patriots signed the contract it was a risk for both sides. For New England they were going to commit top dollar, albeit in a more team friendly manner than some comparable positional contracts, to a player with just two years under his belt and questionable health. We all saw how that worked out for the Patriots with Aaron Hernandez whose questionable character saw him land in jail for a terrible crime. For Gronkowski he was essentially giving up his prime to the Patriots and locking himself into a contract that he might outperform if healthy. He was also tying his salary to being productive at key dates in the contract in 2015 and 2017 to unlock bigger money.

The contract upside/downside was no different than Antonio Browns, the positional salary growth just has not been as large to make it as noticeable. If memory serves correct Gronkowski’s $9M a year APY was around $2M more than the top of the market at the time. It became hard to surpass because there was almost no justification for anyone claiming to be better than he was, but eventually players did go beyond him even if just slightly.

With the success of Gronkowski and Jimmy Graham in New Orleans teams changed their approach to the position. While there had been great players in the past in the passing game such as Tony Gonzalez and Antonio Gates they were considered exceptions to the rules of a tight end being a safety outlet/possession guy.  Teams were now looking at these players as no different than traditional receivers and they could design offenses to exploit mismatches due to size and strength as primary options. Next thing you know every team wanted their version of these players and that has driven salaries to where a Julius Thomas carries an APY higher than Gronkowski’s.

The calls for a raise for Gronkowski began to catch steam last year with a number of stories being written about needing to address his contract and make his pay more fair. None of that would have traditionally been expected by the Patriots but there was likely something to it as they did do a minor restructure of the contract to put some money in his hands at an earlier date even though the material impact on the contract was negligible. It was similar to what was done by the Steelers for Brown and also would make it more difficult, at least in the offseason, to bring up contract talk again which is always a plus for the team.

I really couldn’t see the Patriots doing the raise or big extension anyway because I think they take a much bigger picture look at these things. One of the arguments I had against the contract was while we take such a short term view of contracts and value the fact was for the first two years of the contract it was the Patriots who made out worse on the deal when he played in just 18 games over two years. Had Gronkowski not agreed to his original extension he would have been a free agent in 2014. Does anyone think he would have signed a $9 million a year contract off 14 missed games and a 592 yard season injury filled year?  He came back in 2014 and dominated the NFL and took it even further in 2015 in essence making up for lost time.

Now he is back on IR after just 8 games bringing his new contract total to 56 games played and 24 games missed. Over that same time period the top performing tight ends would average about 71 games played(prorating this years stats to 16 games), which basically means the Patriots have lost nearly a full season more than expected from the position. That would bring his injury adjusted APY to around $10.7M which is a more realistic value for him. The contract has been and continues to be fair for both parties.

Here is how Gronkowski ranks over the last five seasons (again prorated for completion of this season) compared to the other top yardage gainers who are still in the NFL. Adjusted yards is a pretty easy to use metric that Chase Stuart of Football Perspective came up with as a way to evaluate receivers. While not perfect it’s a nice way to encompass the overall impact of the players.

PlayerGamesRecYardsTDsAdjusted YardsSalary$/Yard$/Adj. Yard

In terms of being a bargain, Gronkowski wouldn’t be that. Gronk also is more than just a receiver which does bump his impact, but it has been the impact in the receiving game that drives salaries. The reliability factor in this case also means that the Patriots probably are better off employing a second decent tight end to cover for injury, even if a second “blocking” tight end isn’t needed. Again this isn’t to say Gronkowski has been overpaid just that the injuries have never made him a bargain talent like many have said in the past.

So why then would it make little sense for the Patriots to move on?  The Patriots are paying for one thing when it comes to Gronkowski and that is premier play. Here is how things stack up on a per game basis and what the cost per yard would be if each player was healthy for 16 games over the last five (or in some cases four) years.

PlayerRPGYPGTDPGAdj YPG$/Yard$/Adj. Yard

When you look at the numbers this was not only is Gronkowski incredibly dominant but he is also a bargain. He not only comes in under the average in the value metrics but he is far and away the best value among pure veterans (the three best bargains of Reed, Fleener, and Kelce only have one salaried year under a veteran contract which skews the numbers more).

If you can get 16 games out of Gronkowski you are getting a bargain at the position. When you don’t get those games its kind of wasted space. For two years the Patriots have gotten big bargain years and for two not so much. Which brings us to 2017.

The way I look at this inconsistency due to injury is baked into the contract that the Patriots have with Gronkowski. They didn’t walk away in 2014 when his salary was $4 million for the year and there is no reason to walk away when his salary is a measly $5 million in 2017. The other way to look at is that the Patriots have paid Gronkowski an average of $6.25 million a season since he signed his extension in 2012, so $5 million is below his average salary. His average cap charge over that span is about 3.9% of the unadjusted salary cap. His numbers next year will be around 4.1%. He also has per game bonuses that will reduce his salary if injured again.

Those numbers are probably surprising to some because it’s so easy to get caught up in the annual value of the contract and think the player is paid that amount every year, but that isn’t how it works. The fact is if Gronkowski was going to get injured again this was the perfect year for him because his 2017 salary is so low that its worth the risk because of that premium performance he brings when healthy.

When the team makes the turn to 2018 and 2019 the equation changes. His salaries jump to $9 and $10 million, which are the second and third highest yearly salaries he has ever had in his career.  His $11 and $12 million cap charges are, by far, the highest of his career. It would put him around 6% of the cap, a number he was only once at and that was when the team was in part paying for the upside of lower cost future years. That doesn’t exist after 2017.

While you never discount a New England trade I find that many of their more surprising moves involve players who either are or will be malcontents about their contract. With three years remaining under contract and lower leverage off injury it is hard to see Gronkowski fitting in the category of a Jamie Collins supposedly looking for massive money in a walk year or Chandler Jones in line to be one of the highest paid defenders in the NFL. They are not in the habit of handing out value to other teams and one year at $5 million has the potential to be pretty big value.

Having him play the 2017 season as a Patriot should only help New England. There are basically three scenarios to his 2017 year- he’s great over 16, he’s pretty good in 12 or more, or he is injured again and misses significant time. In the first two scenarios the Patriots get the benefit of the cheap 2017 and his trade value likely increases or stays the same so they get a trade benefit as well if they want to move him in 2018 when his contract could become an issue again.

While the injury scenario (or anything where injuries degrade his play) likely kills his trade value the Patriots will have the ability to use that leverage to try to bring his 2018 salary down further to reflect his injury history. At that point they give themselves the chance for another bargain season in 2018 or longer which can be just as valuable as a 2nd round draft pick.  If he doesn’t agree they cut him with limited pain on the cap.

I just don’t see how the time would be right for the Patriots to be planning an exit strategy after this season.  The production may still be there and when it’s there it’s ridiculous. They are not risking much to try to get that production next year. There just isn’t really a reason for them to move on no matter how frustrating the injuries are or how worrisome this particular injury is.