Predicting Odell Beckham’s Extension with the Giants

In early April, I wrote an article on the Odell Beckham Jr. contract situation that has since led to the opportunity to work with Pat Leonard at the New York Daily News on an article later in April and I had a conversation with Anita Marks on ESPN New York a couple weeks ago on the topic, so I thought I’d expand on this topic here.

With all the information we have now on the Giants’ salary cap situation, plus the reports of the concerns for both sides of the negotiation, I thought now would be a good time to present a contract that could work out for both side’s needs and desires.

Mr. Beckham has noted that he wants $20 million per year, which earlier this offseason I thought was a bit too much to be asking for in a market that’s currently peaked at $17 million a year with Antonio Brown, but which I’ve since realized is a very realistic and fair number for the best rookie contract receiver in the NFL to be asking for.

At the time of my first projection, I hadn’t recognized the need for the non-quarterback market to increase its market price in correlation with how past record setting deals would calculate against the cap. I projected a deal worth $18.95 million per year in new money over the five-years of the extension, $94.75 million in new money, which might have been close enough to Beckham’s asking price to get him to say yes. The deal proposed would have set new records: for total guaranteed receiver money ($55.709 million), money in the first year of a receiver deal ($29.959 million), and money in the first three years of a receiver contract ($56.459 million), and tying Dez Bryant’s record of a $20 million signing bonus.

Joel Corry released an article in late May that detailed how Aaron Donald and Khalil Mack may become the first $20 million per year non-quarterbacks, which also applies to Odell Beckham’s contract situation.

Corry details how insane the quarterback market’s growth has been over the current CBA, highlighting Derek Carr being the first quarterback to sign a deal worth $25 million per year just last June and Matt Ryan hitting $30 million per year less than 11 months later. And Aaron Rodgers will likely sign an extension that eclipses Mr. Ryan in the next few weeks.

Corry notes that this same growth phenomenon hasn’t been occuring for non-quarterbacks and “the top of the non-quarterback markets have been stagnant, comparatively speaking. In the almost seven years since the existing Collective Bargaining Agreement was ratified (in August 2011 after the lockout), the top of the non-quarterback market has grown by just over 18 percent. By contrast, the top of the quarterback market has increased by almost 67 percent. In fact, the market has escalated by 20 percent in a little less than a year.” That 20 percent growth is the jump from Carr to Ryan.

Corry details that Donald’s agent, Todd France, is the man who negotiated Marcell Dareus’ 2015 extension with the Bills, which made him the NFL’s second-highest-paid NFL interior lineman behind Ndamukong Suh at $15.85 million per year. France has set records for non-quarterback guarantees with Dareus at $60 million, then Fletcher Cox at $63.299 million in 2016. Mack’s agent, Joel Segal, made Chiefs outside linebacker Justin Houston the NFL’s second highest-paid non-quarterback in 2015 with a six-year, $101 million contract with $52.5 million in guarantees.

These are two agents who have experience negotiating top of market deals in the markets they’re currently representing Donald and Mack in.

Beckham’s agent, Zeke Sandhu, doesn’t have the same experience to fall back on, but he did just sign Danielle Hunter to a five-year extension with $72 million in new money, which comes out to $14.4 million per year. This deal is about $4.7 million less per year than Von Miller’s market leading contract for an edge rusher and $2.6 million less per year than Olivier Vernon’s leader for defensive ends. It’s a reasonable deal for a player who has shown the potential to be one of the top young edge rushers in the NFL and who had one year left at $1.907 million on a third round rookie deal, but it stands to be very team friendly in a few years if he becomes the player he should become. Hunter may have gotten $17 to 18.5 million a year if he had a big year and hit free agency after Mack reset the market, but that would have had it’s risks too.

With Beckham, Sandhu can’t leave any money on the table as he’s proved he’s the best and deserving of a top contract.

Corry points out where the thinking behind Beckham’s demands may come from, which is the logic that Sandhu may have passed on to Beckham and the cause for what seems like high demands for his contract: “It’s become a common practice for agents to adjust contracts into the existing salary-cap climate when preparing for negotiations on behalf of clients, which is something these two savvy negotiators [France and Segal] probably have done to help formulate contract offers. How persuasive this methodology is with NFL teams varies.”

Corry writes that while average yearly salary doesn’t give the complete picture of a contract, adjusting top non-quarterback contracts signed under the 2011 CBA to the current $177.2 million salary cap illustrates the need for growth in non-quarterback deals. The chart below outlines these contracts:

As Corry points out, while Von Miller is the current standard bearer for non-quarterback contracts, he isn’t even in the top five as his adjusted contract ranks sixth at slightly more than $21.775 million per year. “Miller signed a six-year, $114.5 million contract averaging $19,083,333 per year as a franchise player in 2016. The Super Bowl 50 MVP’s $70 million in overall guarantees is also the benchmark for non-quarterbacks.”

Corry illustrated how the relationship between the average salary of quarterbacks versus non-quarterbacks has been ripped out of whack in 2017 with the increase in quarterback spending up to $30 million per year while Von Miller’s $19,083,333 per year being just 63.6% of that $30 million number. Adjusting for the 78.72% average seen from 2011 to 2017, then Mack or Donald could be slightly over $23.6 million per year.

Similarly, guaranteed money totals are further apart than ever with Matthew Stafford at $92 million in guarantees with Von Miller’s $70 million being under 80% of the quarterback guarantees.

Even the fully guaranteed at signing of Von Miller’s pace setter for non-quarterbacks, it doesn’t correlate with the percentage of overall guarantee fully guaranteed that we saw in prior pace setters.

Corry writes that by applying the guarantee metrics, Mack and Donald would be justified in seeking $85 million in overall guarantees with approximately $67.5 million fully guaranteed at signing.

All of these numbers Corry cites are benchmarks for where the market could be if we to look at past top contracts and use cap inflation to project the current market. But just starting with the five contracts he used for the first table with average salary per year, outside of the J.J. Watt deal, the four other contracts were market breakers, contracts so outside of what was any reasonable cap manager would have perceived to be realistic contracts at the time. None of the General Managers who were with these teams when they signed these deals are still with the team. So while Donald and Mack could command that much money, they likely won’t see that much money, which is why Corry further tempers expectations tweeting that he would be surprised if Donald and Mack don’t get more than $21 million per year, while not saying they’re highly likely to reach the $23.6 million mentioned.

We have to properly balance these projected non-quarterback contract earnings with where markets currently stand and for Odell Beckham, the wide receiver market is lower than the defensive line market, despite Calvin Johnson and Larry Fitzgerald having the two most expensive inflation adjusted non-quarterback contracts of the current CBA. As stated earlier, Miller sets the edge rusher market at $19,083,333, while Brown sets the receiver market at $17 million. We’re going to look at the Beckham contract through that lens.

There are a few factors working for Beckham that could increase his cost past the $20 million number. For one, he’s been a clear reason why Eli Manning has even been competent over the last three seasons. The stats when Odell is and isn’t on the field are a stark example of how the offense and Eli look when he isn’t on the field.

Another thing that increases Beckham’s ability to earn is that the Giants are going to be in a transitionary period over the next few seasons as they move on from Eli Manning and onto a new quarterback situation with a likely rookie contract quarterback who would see the same benefit that a declining Manning has received in Beckham. The current quarterback battle is between 2017 third round pick Davis Webb and 2018 fourth round pick Kyle Lauletta and while teams don’t typically find starters in the middle rounds at quarterback, there are reasons to feel encouraged about both players in Pat Shurmur’s offensive system. Considering the importance of finding Manning’s replacement, and their having a chance to take Sam Darnold, Josh Rosen or Lamar Jackson with their #2 overall pick in 2018, I know Shurmur must have seen something he liked in Lauletta. The Giants understand the importance of being prepared to move on from Eli, so they had to feel it necessary to leave the draft with someone they felt could take over the role in 2020 and–after the season Shurmur got out of Case Keenum–I trust his eye a bit more.

The Giants move for Barkley was probably a sign that they believe they’re in win-now mode, which in some ways makes sense. They were 11-5 in 2016 before their disastrous 3-13 year in 2017, but many would argue they don’t have a roster worthy of competing for a championship in the short-term. Important to note that the Giants’ performance in 2017 will also be used by Beckham’s team to communicate how valuable Beckham is. Considering that Dave Gettleman was the Giants’ Pro Personnel Director for both of their Super Bowl titles in the 2000s, he may believe that this roster has similarities with the formula for success they created in those two seasons.

If the team was more focused on building toward the future, though, I would argue they would have taken one of those three quarterbacks at #2 knowing they needed to be ready to transition to the Post-Manning Era with the higher probability of quarterback draft success at the #2 spot.

Jason Fitzgerald did an analysis in October 2017 in an article titled, “Thoughts on the Cleveland Browns,” where he looked at every quarterback drafted from 2002 through 2014 and “did a quick good, passable, miss rating for the quarterbacks drafted.” Maybe the Giants didn’t believe in the quarterbacks available at #2, but Jason found that Top 10 picks at quarterback have a 35.0% “good” rating and a 20.0% “passable” rating. It’s a steep drop off for finding quarterback success as picks 11 through 32 only have an 11.1% “good” rating and an 11.1% “passable” rating. By the third round the ratings were 6.3% good and 12.5% passable. In the fourth round, the ratings were 5.9% and 11.8%.

Even if they didn’t love who was available at #2 and they believed in the Webb/Lauletta combination, it’s still a risky proposition to pass up quarterbacks that the league consensus says are first round picks. I do like what they’ve done in creating this competition behind Eli and giving them options for the future, but it felt like the time was right to go for a quarterback early. Shurmur also may have confidence that he can get more out of Manning than he the uncreative Ben McAdoo could. Even the 2016 team that was 11-5 was 29th in rushing, so they must be betting the addition of Barkley will give them an added variable for success that could be a real difference maker now and into the future.

Say one of these two, Webb or Lauletta, becomes the starter, or if the team drafts a starter in the first round in 2019 or 2020, whoever is at quarterback will benefit from an offense with Saquon Barkley, Evan Engram, Beckham, and Sterling Shepard, if they re-sign him. Even though the current 2020 free agent market is slated to have Drew Brees, Aaron Rodgers, Russell Wilson, Ben Roethlisberger, Philip Rivers, Tom Brady, and Case Keenum, the team would probably rather solve their quarterback situation through the draft. If Wilson and Keenum perform, it’s unlikely they make it to free agency, Rodgers will be signed to an extension this year, while the others will be nearing the end of their careers. Even if the Giants were looking toward the future free agent market for quarterbacks, I wouldn’t pass on re-signing Beckham to sign some quarterback who’s cost will far outpace the value he’s going to provide you. While Beckham is going to be expensive for his position, you know he has a high probability of success.. If any of those quarterbacks hit free agency, it will likely be because they haven’t been producing because teams retain quarterbacks that produce. I don’t foresee Manning playing well enough to be worth re-signing at 39-years old with the high price he’ll probably want.

So to Beckham’s benefit, the team will be in a low-cost quarterback situation downstream, which means they will be able to afford a few higher expenses elsewhere. It’s actually an ideal situation from an earnings perspective for a wide receiver hitting free agency as the team knows he may be the most important piece in this transition toward a low-cost quarterback and they have the money to spend. From an offensive perspective, if the Giants aren’t spending the money at quarterback, then a left tackle (Nate Solder) and a wide receiver that protect and produce for a young quarterback is a worthwhile investment. Shoot, say Lauletta becomes the starter in 2020, they’d have two years of a starting quarterback under $1 million making around 0.45% of the cap. That means a lot of money to spend elsewhere and Beckham will deserve that money.

To further cement the understanding that Beckham should be the highest paid receiver in the league,Danny Heifetz from The Ringer wrote in a March 2018 article that Beckham is one of the best young receivers of all-time from a statistical perspective.

“Through 47 career games, he has accrued 4,424 yards, 313 receptions (14.1 yards per catch), and 38 touchdowns. Since the NFL-AFL merger in 1970, here are the players who had 35 or more receiving touchdowns through their first 47 games.

  • Randy Moss, 42
  • Jerry Rice, 41
  • Rob Gronkowski, 40
  • Odell Beckham, Jr., 38
  • John Jefferson, 37

And here is the list of players who cracked 4,000 receiving yards through 47 games.

  • Odell Beckham, Jr., 4,424
  • Julio Jones, 4,165
  • Randy Moss, 4,121″

Those are elite lists so Beckham, who will be 26 in 2018, should see the kind of deal he’s asking for.

There are reasonable causes for concerns that must be addressed: teams are always concerned with a wide receiver of immense celebrity and the potential distractions, but Beckham has, by all accounts I’ve seen recently, seemed to be a man dedicated to his craft and dedicated to being one of the best receivers of all-time.

Another cause for concern is that he came into the NFL in 2014 and set the league on fire in his 12 game rookie season with 1305 yards and 12 touchdowns on 91 catches as a rookie with a 70.0% catch rate. His per game averages were 7.6 receptions per game and 108.8 yards per game.

In 2015, he had 6.4 receptions per game for 96.7 yards per game with a 60.8% catch rate during a 15 game season where he had 1450 yards on 96 catches with 13 touchdowns.

In 2016, his only 16 game season in the NFL, which in itself is cause for concern, he had 101 catches for 1367 yards and 10 touchdowns with a 59.8% catch rate. His per game averages shrank again to 6.3 catches per game and 85.4 yards per game.

He was injured with four minutes left in the fourth quarter of the Giants fourth game in 2017, but we did see another yardage drop to 75.5 yards per game. I wouldn’t judge him on this season, as there wasn’t a big sample size, but the drop across years might be something the team is thinking about when considering this deal.

Of course, his most recent injury, the surgically repaired fractured ankle is the biggest cause for concern right now.

These things are valid causes for concern, but not enough to not make him the highest paid receiver in NFL history and increase the market near the $20 million per year number he has been advocating for.

As Jason detailed in this article on the Brandin Cooks contract, there are yearly new money cash flows that Beckham will want to beat. Cooks deal is just barely below the leading new money cash flows for a receiver who you probably wouldn’t name as one of the five best receivers in the NFL. His year 1 earnings actually lead the pack for the highest paid receiver and how quickly a player receives the cash that makes up his deal is a key point of focus in any deal. Of course, these contracts aren’t about who is the best receiver in the NFL, or was the previous season, these big money contracts are a function of rookie contract players who have proven to be top receivers, or proven to have the potential to be top receivers, simply hitting the free agent market or nearing it.

Cooks’ contract is also an interesting comparable for Beckham because, while Cooks is a great player, his production is far below Beckham’s. Per 16 games, Cooks average totals are 77 catches on 118 targets (65.3% catch rate) for 1088 yards (14.1 ypc; 9.22 yds/target) and seven touchdowns. Beckham’s average totals are 107 catches on 170 targets (62.9% catch rate) for 1506 yards (14.1 YPC; 8.86 YPT) and 13 touchdowns.

Cooks played with Drew Brees and Tom Brady, two of the best quarterbacks in the game today, so maybe he should have performed more, but he also never saw more than 130 targets in a season during this time as those quarterbacks had more weapons to spread the ball around to than Eli Manning has had. Beckham saw 130 targets in his 12 game rookie season, then 158 and 169 before 2017, although he was on pace for 164 through four games.

Either way, Beckham needs a contract that outpaces the market and sufficiently outpaces what Cooks just earned considering Beckham is a much more productive player.

So, this is the contract I came up with for Beckham:

*Cap projections based on a historic 7.5% year over year increase.

The deal is a five-year extension worth with $100,541,000 in new money, which comes out to $20,108,200 per year. It has a $10 million signing bonus, which will be prorated out over the first five years of the contract.

Since the Giants have about $1.2 million in cap space after the Connor Barwin contract, there can’t be a bigger cap hit than $10 million or so, but this deal takes after the Cooks contract with an option bonus in 2019, which is then prorated out over the rest of the contract. Beckham’s cap number will increase by just over $1.5 million, which means there will be some adjustments made elsewhere on the roster to clear a little bit of cap space, but that shouldn’t be a problem. That will come naturally through cuts or through re-structuring someone else’s contract.

While Cooks received a signing bonus of $7 million and an option bonus of $17 million for a total of $24 million, Beckham’s signing bonus will be $10 million and his roster bonus will be $20 million. He’ll have a roster bonus of $9 million in 2019 that will be guaranteed and, while his roster bonus of $4 million in 2020 won’t be guaranteed, they won’t be releasing a player who will have $31 million in dead money against the cap that year.

Including the $20 million option bonus as a guarantee, Beckham could have a total of $57 million in guarantees, which will surpass Mike Evans’ $55 million in guarantees. Evans had his first two seasons guaranteed at signing, which was $38.258 million of that total, but $11.75 million of his 2020 salary vests from injury guarantee to fully guaranteed if Evans is on the roser on the fifth day of the 2019 league year. For Beckham, I would advocate for his $9 million salary to be fully guaranteed. As seen from the guarantees Joel Corry explained above, this is not out of the question. Calvin Johnson had $53.25 million in guarantees back in 2012, there is no reason Beckham shouldn’t see $57 million. In fact, I think the $4 million roster bonus should be fully guaranteed to take it to $61 million fully guaranteed, but I’m not going to push it with this contract. That roster bonus could also simply be factored into his guaranteed salary in 2020 rather than be a roster a bonus at all.

His yearly cash flows are above the rates we see for the current top paid receivers, so it’s a deal that would likely be sufficient for Beckham.

Other than Year 0, due to the Giants cap space restrictions in 2018, Beckham’s deal sets cash flow records at the position in every season of the deal and it sets these records by quite a bit.

The deal immediately makes up for that Year 0 earning being much lower than Brown’s $15.2 million with a $9 million roster bonus that would hit on the third day of the 2019 league year. According to our own Jason Fitzgerald, the option bonus of $20 million could be negotiated to be paid out entirely in March or April, which is what the case would probably be for a quarterback, or it could be paid out in as many as three separate installments like some of it coming in April, some in September, and the last part of it in March. Jason says, “basically it’s like a signing bonus in that they have leeway with it, but generally all of these are paid within a year.”

While it’s a sound deal that pays Beckham his rate, there may be even more opportunity for his agent to push more money into the earlier years. The option bonus would be a great coup for Beckham and the team would point to the combined $39 million in bonuses before 2020 hits as reasoning for why he doesn’t need an increased salary for 2019 or 2020, but Beckham’s cost against the cap is still not near the top of where the market is, so there’s room to bump him up.

Also, the contract isn’t in line with the table Corry shared where he compared quarterback average salary versus the highest-paid non-quarterback. If you compare Beckham’s $20,108,200 to Matt Ryan’s current $30 million per year, which will soon be passed by Aaron Rodgers, then he’s only at 67.0% of Ryan’s number. If you compare Beckham to Stafford’s $27 million a year he’s at 74.5%, which is still below the 78.72% that Corry has as the average for the current CBA. If we compare Beckham to Carr’s deal, he’s at 80.4% of Carr’s average per year.

Like Corry is quoted as saying earlier in this article, the top of the quarterback market has increased by 67% over the course of the current CBA with a 20% increase over the last year from Carr’s deal to Ryan’s, so I don’t expect other markets to grow at a similar sort of out of control pace to the quarterback market.

One of the big issues with the current CBA for the players is that teams are getting a lot of value out of rookie contract players on below market value costs and even choosing to play with more undrafted free agents rather than sign more expensive veterans, so a lot of the money that’s being saved by these decisions and the steady and strong increases in the salary cap is being dumped into the quarterback market. Maybe the non-quarterback market should jump with the quarterback market, but I don’t think Beckham is going to increase the receiver market from $17 million a year all the way to $23.6 million.

*From Caponomics: Building Super Bowl Champions.

On the team’s side of the negotiation, the franchise tag in 2019 is projected to be about $17 million according to Joel Corry at 8.92% of his projected $190 million cap. If he were to get franchised twice, then his second year on the tag in 2020 would be at $20.4 million. This means that his $52.541 million in new money through 2020 would be about $15 million more than what his 5th-year option and two franchise tags would cost over three years.

The Giants have a projected $35 to $37 million in cap space dependent on where the 2019 cap is. This means that with the Beckham cap hit at $16 million, they will be able to afford Landon Collins and the at least $13 million a year contract they can likely expect him to sign at no matter what his year one cap hit is in 2019.

While the Giants are paying him $15 million more in cash than double tagging him on this deal, it’s still a pretty team friendly situation with Beckham’s 2019 and 2020 cap hits actually being below what those tags would cost with the benefit of the option bonus and it’s proration from 2019 through 2023. With that $15 million more in mind, the Giants won’t want to pay him much more than that, but the cap numbers and the need for contract inflation to stay in line with cap inflation as Corry explained to us, Beckham’s team will want to push some more of that money into the early years. They want bigger differences in cash flows to come earlier.

The Giants have good reasons to want to wait on paying Beckham with his ankle injury, but the more they wait, the more Beckham’s team sees markets increase and his cost go up for the team. If Mack and/or Donald sign deals worth $22 or $23 million a year, you can expect that Beckham’s team might factor that into the equation. Cooks’ contract may have increased Beckham’s expectations if he believes that Cooks is a sizeable step below him as well.

Overall, the deal averages about $3 million more per year than where the current wide receiver market stands in terms of cash flow over the course of the deal, so I think it’s a sound deal where the best young receiver in the game resets the market, but it doesn’t leap so much that it’s unrealistic. It’s a reasonable price from a cap perspective.

Considering that Beckham is dealing with a bone injury rather than a muscle, ligament, or tendon injury, I’d be more comfortable signing him to this deal based on what I see out of him in camp. This is a deal that should be done as soon as possible for the sake of Beckham getting the security he’s earned and the Giants signing him before Mack or Donald sign contracts that could push his asking price even higher.

Sandhu could ask for a deal with $106,542,000 in new money that would average $21,308,200 per year by putting $4 million more in salary in 2019 and $6 million more in 2020. This deal could have $61 million in guaranteed money, which is $6 million more than Mike Evans’ current record for guaranteed money at the position.

The $21,308,200 number would be 71.0% of Matt Ryan’s $30 million per year and 78.9% of Stafford’s, so maybe that’s a position that Sandhu could articulate as a means for expressing why Beckham is worth this kind of coin regardless of where the current market is.

As seen from the percentage of cap standpoint, the numbers are still arguably within a reasonable range for a top paid wide receiver. As I write in Caponomics, you want to keep a wide receiver under nine percent of the cap at the top, but by not extending Beckham earlier, and without the cap space to increase his 2018 cap hit to spread out the cap consequences across years, the Giants have put themselves in a position where they could have to have high cap hits throughout the deal.

Beckham’s team would probably accept the first contract proposed, but they may try to push it for the second contract. Either way, Beckham’s contract will likely end up in this range and both sides could be satisfied with the result.

*As I finished editing this article. Joel Corry wrote an article on Odell Beckham as well. You can check it out here.

Zack Moore is a writer for OverTheCap.com and author of the recently released book titled, “Caponomics: Building Super Bowl Champions,” which is now available on Amazon. You can follow him on Twitter @ZackMooreNFL. 

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