Over the last two or three weeks the Oakland Raiders have been at the top of my questions list The Raiders are finally on the uptick and have some big time players on rookie contracts. Whenever that happens people immediately begin to wonder how they can work all the contracts, so I’ll play fantasy GM of the Raiders and give an overview of their cap situation and offer some of my opinions on their upcoming decisions. To keep the posts from getting too long Ill post this in a few parts with the new section being released each day. In part 1 we’ll look at the Raiders contract strategies before moving on to contractual decisions in part 2.
A lot has been made of the Raiders salary cap strategy by myself and others who discuss this side of the NFL. For those unfamiliar with the Raiders way of doing business they generally follow a philosophy of using no signing bonus in their contracts. In fact of their top 10 contracted players none has received a traditional signing bonus. Instead they use a cash equals cap type of contract structure. It is a strategy that was really first put into use by the Tampa Bay Buccaneers but Oakland is the first team to have success using it.
The positive with this strategy is that it minimizes the damage when a team makes a mistake in signing a player. Generally the contract contains two years of guaranteed base salary and after those two years a player can be cut with no penalties on the salary cap. Compare this to teams using large bonuses that more often than not ensure 3 years on a roster and dead money even in the 4th year when the player is released. This is why the Buccaneers were able to move away from Darrelle Revis after just one season with no cap implications despite a $16 million a year contract while a team like the Dolphins would have no financial escape route with Ndamukong Suh if he had failed to fit in with the team. This contract structure is the prime reason why Oakland is praised when it comes to having flexibility with their salary cap.
However there is also a downside to this strategy. It is clear from above that the team derives benefits from these contracts. When you eliminate the signing bonus you eliminate any kind of “dead money” protection from the release of the player. Cash is also generally deferred for a longer time than a traditional contract in which a full signing bonus is often paid out in the course of a year. So teams usually have to give something in return for those concessions and that leads to contracts that can be overpriced compared to the market. That is how Bruce Irvin lands a $9.5M a year deal despite a generally average tenure in Seattle or why Kelechi Osemele was able to obliterate the market for guards.
If they do well, odds are you will end up paying more, both in cash and on the cap in the prime years of a career, than another team might for a comparable player. In essence you need the player to outperform what he did leading into free agency, and that is rare for most players in a league where careers are short and declines in play can come swiftly. While you can create cap room with a restructure all you have done at that point is overprice the player and give him the benefit of the contract structure, which is the worst of both worlds. The Raiders have done well, IMO, to mitigate this risk by frontloading the year 1 salaries at a time when they had cap room to make things more affordable. I’m not sure that same strategy can work with their younger players, but for the time being they are insulated from free agent flops.
Despite the fact that many people are saying the Raiders have some expensive pieces on the team and that they have been spending so much that the cap will become an issue, that is not really reality. While I can argue that that Raiders paid rather high prices for some of their players, they still do not have a premier contract on their hands. Osemele is a massive premium for a guard, but its pennies for a top paid player. If we remove all QBs out of the equation Osemele’s APY ranks just 36th in the NFL. 25 other teams have at least one non quarterback that is paid more than Osemele, the Raiders highest paid player. So decisions made in the last two years should not in any way compromise the Raiders.
As we look at cap space moving forward there are no real pressing issues prior to the big contract extensions. The Raiders should have over $40 million in room next year, which will rank in the top 1/3 of the NFL, and will be back in the top third the year thereafter. They won’t be forced to make any major contract decisions this offseason other than one on running back Latavius Murray. Here is a listing of the Raiders free agents in the future which should illustrate that there is no real pressing need that could compromise the team’s salary cap in the immediate future.
I think there is also another misconception about the Raiders and their contract situation that all of these players are becoming free agents at once. One of the keys for the Raiders should be their ability to stagger their contracts or use longer timeframes to account for new contract salary . Of their big players I am asked about, these are the years in which the player is a free agent
Latavius Murray- 2017
Derek Carr- 2018
Gabe Jackson -2018
Khalil Mack- 2019
Amari Cooper- 2020
What can cripple a team is when multiple players hit free agency in a given year. Not that Denver was crippled by free agency, but they had to make incredibly difficult decisions because they had their quarterback, superstar pass rusher, two highly regarded defensive ends, linebacker, and running back all hit free agency the same year. They could only protect one player with the franchise tag (Von Miller) and had to really pick and choose who to keep. Since the Raiders drafts haven’t panned out nearly as well that won’t be an issue for them the way some believe. The leverage of the tag will hang over the big three. They can frontload some deals if necessary to use room in a given year. They have options as long as they handle it correctly.
I also want to bring up an important point when we talk about extensions and contract structures- we are making a large guess as to their strategy. The big three are all going to be premier players at premier positions. That is unchartered territory for the Raiders so we have nothing to base things on. They will be extensions not free agent signings and that is pretty much all the Raiders have done. Their two bigger in-house extensions did contain signing bonuses, but those were for a fullback and a kicker so there may be no relevance. (Edit it was pointed out to me I forgot David Amerson. I had him mislabeled s a FA, but he was the lone true extension and received no signing bonus)
It is quite possible that the Raiders can stray from their current strategy if need be. While there is a clear precedent set for free agents they can argue that extensions are different, as they are safer signings. They could simply stray for a quarterback because without the QB the team isn’t going anywhere. Or they can remain status quo. It is really all a guess at this point.
So with that in mind in Part 2 I’ll go through the Raiders decisions with their upcoming free agents, so check back tomorrow night to see some thoughts on Derek Carr and Khalil Mack.
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.