The Atlanta Falcons Prepare to Enter Salary Cap Hell in 2020

As the Falcons fall to 1-6 with the 38-10 loss to the Rams that made Jared Goff look like an MVP candidate against the Falcons defense, which is unquestionably one of the worst in the NFL, I was inspired to turn towards 2020 to look at how this team can potentially make a change.

Currently, they’re slated to be $8.7 million over the cap and largely because of some massive investments at the top of their salary cap. And that’s before you take into account the $9.6 million team is currently projected to spend on their 2020 draft picks.

Matt Ryan and Julio Jones will consume 27% of their cap in 2020. The Super Bowl record for Top 2 players was set by Steve Young and Jerry Rice at 21.84% in 1994. Young’s cap hit of 13.1% is the highest cap hit for any Super Bowl champion in the 25 seasons of the salary cap era.

An astute 49ers organization re-signed 17 players in December 1993 to avoid the cap, so they kind of cheated the cap. This makes Matt Ryan’s 16.8% cap hit, and the QB market rates in general, even more crazy.

If you add Jake Matthews, Grady Jarrett, and Desmond Trufant, the Falcons top 5 cap hits will consume 50.6% of the cap. The Super Bowl record was set by the 2002 Bucs. Warren Sapp, Brad Johnson, Simeon Rice, Derrick Brooks, and Jeff Christy combined for 38.4% of the cap.

If you add Alex Mack, Deion Jones, Devonta Freeman, Mohammad Sanu, and Ricardo Allen, the Falcons top 10 cap hits consume a shocking 73.6% of the cap.

The 2015 Broncos have the cap era record for champions in spending 62.3% of the cap on Peyton Manning, Demaryius Thomas, Ryan Clady, Von Miller, Demarcus Ware, Aqib Talib, Louis Vasquez, Emmanuel Sanders, and Chris Harris, Jr.

Demaryius Thomas’ cap hit of 9.2% is the record for wide receivers and #2 cap hits on champions. Jones’ cap hit of 10.2% will be a percentage point higher.

When you consider why the Falcons defense is so horrible, you can look towards the low-percentage situation they’ve put themselves in. They were heavily reliant on too many low-probability things working out for them.

For offensive skill players, Ryan, Jones, Freeman, and Sanu consume 35.8% of the cap. Add Matthews and Mack, the team has 49% invested in six veteran offensive players. The team spent a first round pick in 2018 on another receiver, Calvin Ridley. There is so much invested in this offense and it has impacted the defense.

Over the last two seasons, an organization that has known defense was a weakness since their Super Bowl loss to the Patriots, has invested three first round picks in offensive players over the last two years: Ridley, plus linemen Chris Lindstrom and Kaleb McGary.

In the five drafts since 2015, the team has only had 32 draft picks, that’s eight less than the league average. Eight less opportunities to draft defensive players and instead have to take a larger chance on an undrafted player.

The team has become fully committed to their strategy for success: pass for more production than anyone else. It’s a valid idea for a strategy for success, but we’ve already seen Drew Brees play out this 7-9 reality when his defenses were terrible from 2012 through 2016.

It feels like some tough decisions should have been made over the last couple years like recognizing the crazy investment totals in 2020 and the likely need to trade Julio Jones who wanted a new contract.

He’s having a good season by anyone’s standards, but before this week, he’s already a bad value for the team as he’s produced about $12 million in value versus his $22 million average per year. That’s $22 million number is based on the player Jones was in his late-20s, the end of a receivers prime years. It’s not based in the reality of who he will be in the future.

Trufant is producing $9.4 million in value below his contract value, so two big investments aren’t working out great. Add the rest of the group in though too. Jarrett, Mack, Allen, Ryan, Matthews, Freeman, and Deion Jones are all producing below their value. Sanu is the only player in the Top 10 producing more than his contract value.

This is just an unfortunate truth of NFL contracts. Most second contracts will be proven to be bad values by Jason’s standard because of the extremely undervalued prices of everyone who basically contributes at all while on a rookie contract.

What the organization seemed to fail to recognize in all of this is the value that Kyle Shanahan provided to the organization during that 2016 season. Ryan and Jones had similarly massive cap hits during that year, but because of that trademark Shanahan offense, he was able to pull out the most extreme value out of that offense. The defense was still poor, but Shanahan made their offense the NFL’s highest scoring, not just the most prolific at passing.

That offense was ranked fifth in rushing with Freeman and Tevin Coleman leading an attack that ran for 4.6 per carry, rather than the 3.8 it’s churning at this year. It’s no secret that the Shanahan offense is terrific.

Even with Shanahan though, this 2020 team would be in a lot of trouble. The issue with spending $146.7 million on your Top 10 is an over-reliance on accepting sub-optimal players on the rest of the roster due to costs. Atlanta already has $3 million in dead money costs next year with potentially more dead money charges to come considering the need to get under the cap next year.

If the salary cap is $200 million, the Falcons have $51 million, or just 25.5% of the cap, to spend on the 43 other roster spots. That’s just $1.19 million or 0.59% of the cap per player to invest.

The team currently has just 40 players under contract AND they’re already projected to be over by $18.3 million when factoring in draft picks!

After the Top 10 players, the team has 12 players making over $1 million. When factoring in those 12 players, the Top 22 cap hits for the Falcons consume all but $1.95 million of a $200 million cap.

So an NFL team has 53 players on a roster, the Falcons are spending $198.05 million on 22 players, plus dead money. This leaves the team with $1.95 million for 31 players, which leaves $62,903 per player.

If the team does a complete fire sale and moves on from Mack, Freeman, Sanu, Allen, Keanu Neal, and Allen Bailey, that saves $32.125 million, which brings that total to $34.075 million in cap space. That’s still just $1.1 million per player, which, especially considering all the talent they’d be ridding themselves of in that scenario, likely makes them one of the worst teams in the NFL next year.

I have no idea what the Falcons are going to do to right the ship right now and I don’t think they do either.

Welcome to salary cap hell. We’ve been waiting for you.

Zack Moore is a certified NFL agent, a writer for OverTheCap.com and OnnitGymMMA.com, as well as the author of “Caponomics: Building Super Bowl Champions,” a book that breaks down how Super Bowl champions are built in the NFL’s salary cap era and discusses how NFL front offices can best allocate resources to create successful teams.

You can follow him on Twitter at @ZackMooreNFL. You can subscribe to The Zack Moore Show podcast here.

A Closer Look at Russell Wilson’s Massive Contract

The numbers are now in on the Russell Wilson extension thanks to Ian Rapoport and it’s a big one.


Clearly there is some give and take on both sides, which I discussed today at the Sporting News, but now let’s focus on the cash flow of the contract to see just how big this deal is compared to the market. Continue reading A Closer Look at Russell Wilson’s Massive Contract »

The Cash Flow Structure of a Russell Wilson Contract

According to a report by Ian Rapoport of NFL Network and NFL.com, a big disconnect that currently exists between Russell Wilson and the Seahawks is because of the year by year breakdown of the Seahawks contract, specifically the payments made in 2015. Rapoport indicated that the Seahawks offer would pay Wilson less than $20 million this season, which is a far cry from the $28 million earned by Matt Ryan and $30 million earned by Cam Newton on their extensions. This is something I had discussed as a potential problem a few weeks ago. The problem lies primarily in the other two contracts having large on the book salaries when they signed their deals compared to Wilson’s $1.542 million salary. So let’s look closer at those two contracts and see what the Seahawks are likely offering compared to what Wilson may want. Continue reading The Cash Flow Structure of a Russell Wilson Contract »

The 2015 Sando/ESPN QB Tiers Project and Salaries

Mike Sando of ESPN just wrote up his 2nd annual QB tier rankings in which he polled a number of football people to rank the quarterbacks in the NFL. Mike then crunches the numbers to place players into one of four tiers. It’s a great concept and helps illustrate the various opinions that people have on players in the NFL.  And for the second straight year I’ll look at the opinions and see how they line up with salaries in the NFL.

Continue reading The 2015 Sando/ESPN QB Tiers Project and Salaries »

Stock Down: Week 8

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Every Monday during the season we will take a look back at three players who are entering important stages of their contract that may have hurt their stock in upcoming negotiations with their play on Sunday. In addition we will also look at one player signed in the offseason to a new contract that did not live up to the expectations that his contract sets for the player.

Stock Down

Mike Vick– Vick had two things he had to do this season. The first was to be effective as a starting QB and the second was to actually play in a majority of games. In general he has failed in both regards. Vick was inconsistent during the first few weeks of the season, at times dazzling and at times dreadful, which has been the story of his career. He looked terrible at the start of Sundays game before aggravating his hamstring injury and being forced to the bench again. He’s now missed a portion of at least 4 games this year. A team can not commit to a left handed, run first QB that is constantly injured. At best Vick is a piece you can bring in and hope to get something out of, but you can’t spend much money on him and you need to have a capable backup that can somehow run the same style offense. His options will be limited.  He played this year for a maximum of $7.5 million. He probably will not come close to that in 2014.

Marcedes Lewis– One of the most overpriced Tight End contracts will soon be coming to an end as Lewis’ dead money figure is just $2.8 million in 2014. Lewis has missed most of the season with a calf injury caught just 1 pass for 6 yards in the blowout loss to the 49ers, bringing his season total to just 2 receptions. Pro Football Focus graded Lewis negative in the run blocking game as well, which had been the one thing he had done well over the last few seasons. Scheduled to earn $6.85 million next year he may have a difficult time earning anything more than a token bonus if these numbers persist for the rest of the season.

Antonio Cromartie– This will be at least the second time Cromartie’s name has come up in this section. He is having a downright awful season. He looks to have lost significant speed and is basically getting caught grabbing at guys who then just run away from him. Cromartie allowed another huge reception on Sunday, this time a 53 yard pass to AJ Green where Cromartie wasn’t within 5 yards of Green who just went right by him. Scheduled to carry a $14.95 million dollar cap hit in 2014 he has no chance of playing his contract out. Though the player they drafted in the first round is struggling terribly the Jets may look at this as having a first round investment in the position and Cromartie being expendable. Even if he is not the money he will make will pale in comparison to what he received in his last extension with the team.

New Contract Disappointment Of The Week

Matt Ryan– Just last week I had put Ryan in the Stock Up category and boy does that look like a mistake now. Ryan looked to be in control at home without his favorite targets, but on the road against a good defense he looked anything but. His 4 interceptions were one off his career high and the overall performance was likely the worst of his career. When a team commits the kind of money they sunk into Ryan the expectation has to be that the QB can perform at a high level even when his targets begin to get injured. Aaron Rodgers was able to do it this week and others have been able to do that in the past. If Ryan needs to have three superstar receivers at all times the contract is going to be an albatross for the Falcons. He needs to bounce back over the next few weeks.

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Contract Year Series, Matt Ryan

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Matt Ryan #2 QB, Atlanta Falcons

by Paul Carrozzo

On July 9th, Matthew Stafford signed a 5 year $76.5 million contract with the Detroit Lions.  That signing along with the rumors leading up to the signing put Matt Ryan back on the mind. After watching the Baltimore Ravens gamble and lose with Joe Flacco, the question on most fans minds is how soon Matt Ryan’s contract will be extended by the Falcons.  Ryan is in the final year of his rookie contract (6 year $67.5 million) and is in position to really break the bank on his next contract.

We must remember where the Falcon franchise was in 2008 when they drafted Ryan 3rd overall.  The Mike Vick disaster had the club searching for a new face that it could be proud.  Matt Ryan was the man that not only pulled the Falcons out of the depths of public outcry, but it can be argued that the Falcons are now completely distanced from the incident because of Ryan.  How can something as unprecedented as this be valued?  It really is up to the Falcon brass to weigh in, but my assumption is that the Falcons will not go into the season without extending Ryan.

Oddly enough, it is the contract that Vick signed with the Eagles in 2011 that most closely resembles Ryan’s present value.  Add that skill valuation with the goodwill he has created in Atlanta, and it is a recipe for a Top 5 QB contract.

Estimated New Contract: 5 years, $86 million

The Role of Age in the Success of the NFL QB

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In keeping up with our theme of extending Quarterbacks I decided to look at the age of QB’s advancing deep into the playoffs, meaning at least an appearance in a conference championship game.  Why team success instead of stats?  Primarily because QB’s are paid at an extremely high rate since teams are equating playoff success with QB play.

We’ll begin by breaking the numbers down by decade.

avgage

The 70’s were certainly a different brand of football. The average age of a Super Bowl participant was 31.4. The next closest decade was just 30.3. All 10 seasons in the 70’s had at least 2 QB’s over 30 and 6 years saw at least one over the age of 35. In the 33 years that have followed, only 15 seasons had at least 2 QBs over 30 leading their team to a conference championship game and only 11 seasons with a QB over the age of 35.

Focusing on 1980 thru 2012, we can begin to see some trends that develop. The following graph represents the percentage of players appearing in the championship game sorted by age, with a best fit line trend line added to smooth the data. We can call this a Quarterbacks lifecycle.

qblifecycle

This chart really should be a guideline for teams when identifying talent and extension possibilities for the QB position.  47% of participants in the Championship game were ages 26 thru 29. It’s 54.5% if we extend it to 30. Beyond 30 the numbers begin to crumble. 18.2% were between the ages of 31 and 34 and the 35 and over category is just 10.6%.  The numbers just affirm the saying that “it’s a young mans game”.

The consistent plus 31 group is from an older generation. Joe Montana and Steve Young led the way with 4 appearances while John Elway and Jim Kelly both had 3. The only players whose careers did not begin before 1990 that made the list multiple times were Tom Brady and Brett Favre, both of whom made it two times past the age of 30. The other post 90 QB’s to do it were Brad Johnson,  Kurt Warner, Peyton Manning, Jake Plummer, and Donovan McNabb.  Of the 7 Super Bowl winners (in which I included Phil Simms due to so many starts even though he was injured for the playoffs) only Johnson would be considered a modern era QB. Of the 14 who played in the Super Bowl a total of 4 are from the modern era (Manning, Brady, and Warner along with Johnson).  That doesn’t mean nobody is going to do it again but it’s a hard task, especially if high cap charges for the aging QB, not an issue in the 80’s and even partially in the 90’s, compromise your ability to field the best roster.

As we look around the NFL there are a number of contracts that defy logic just based on the age criteria. Perhaps there is no worse contract in the NFL than the contract given to Peyton Manning. Manning fell into an age group that had a 7.6% chance of making it to at least the title game and in each season the odds get progressively worse. On average he gives the Broncos a 1.5% chance of making it and for that makes $19.2 million a season. The Broncos are paying $12.672 million per percent, by far the highest in the NFL. The Patriots, who were praised to no end (myself included) for the contract extension given to Tom Brady, have the second highest effective spend in the NFL on the position. Brady’s contract may be more difficult to escape than Manning’s, though Brady has been far more successful in the postseason and is one of the most likely candidates to make it back again to the title games as this generations Montana or Elway. Tony Romo is the 3rd worst bargain in the NFL and with no track record at all he is a prayer player for the deep playoff run.

When you look at the rookie contracts it just reinforces why teams should be considering the draft rather than overextending aging talent. Cam Newton, coming in at 22, would have about a 4.8% chance per year at making it over the terms of his rookie deal. Luck, a year older, would be at 7.7%. They both cost around $5.5 million a year, about 3.5 times less than Manning, and with a significantly higher chance at making it deep into the playoffs.

By extending a player earlier in their lifecycle a team can gain tremendous upside and flexibility.  Consider the option of extending Newton when he turns 25. A 5 year extension makes Newton property of the Panthers until the age of 30.  That 6 year period is the peak of the lifecycle with a 10% chance per year of making it deep into the playoffs.  By extending early and rolling the 4th rookie year into the contract the effective cap values of the contract can be smoothed out and rather than just having one low cost year and a few high seasons the Panthers have the ability to have a cap affordable contract over the entire 6 year period using the extra funds to improve the quality of the team for the long term.  In the event a player does not work out or you end up in cap trouble you can escape the contract with minimal cap penalties or potentially extend briefly into the low 30’s.

A perfect illustration of this is the cap killing contract of Joe Flacco versus that of Aaron Rodgers. While the two are at different stages of their careers Rodgers effective cap value is only $18.68 million a year compared to Flacco’s $20.1 million. The Ravens will be forced to extend Flacco at huge money figures when he turns 31. The effective age at which the Ravens will be able to escape Flacco is likely going to be 36 unless he fails so badly that they absorb major cap penalties when he is 32 or 33. Rodgers can be let go after the season in which he will be 34. It’s the benefit of extending early.

The worst thing a team could do is franchise their young QB. All a tag does is delay the inevitable of a long term deal. In Newton’s case you would pay a huge sum of money to invoke their 5th year option when he will be 26. Most likely you will extend the next year keeping him until he is 31 and on a contract with far less flexibility than one in which he was extended at the age of 25.

As difficult as it is for a team to let go it almost seems foolish to chase the dream with the overpriced aging QB, no matter what the track record of the player may be. Brady has probably exceeded all expectations but he is under a contract until he is 40 and in essence the deal is fully guaranteed if he remains on the team through the 2014 season. Structuring deals like the Brees contract that nearly ensures 5 years under contract is insanity. Now 34, Brees is in the age group that shows little upside, let alone at $20 million a season.

In a perfect world teams should be extending their QB’s at the ages of 25 or 26 and setting up contracts with exit strategies in the early 30s. If you must extend in the 30s the contracts need to be of the Alex Smith variety- 3 years with a rapid escape plan after 1 year. Everyone considers it a foregone conclusion that Eli Manning and Ben Roethlisberger will be extended in the next year or two. They probably will be and at least they have the pedigree to be the next group of post 30 stars, but the teams would likely be better off, if the draft quality is good, to trade such a player for multiple first round picks that can be turned into 22 or 23 year old QB’s. If a team does not have the guts to do that kind of move then the next best option is to draft QB’s in the later rounds until you find the successor.  If those teams do plan on extending the earlier they do it the better off they will be when it comes to long term health. It’s far better to extend Eli at 32 than at 34 or 35 years old.

This now leads into a discussion of players currently under contract with potential  extensions on the horizon, the most interesting of which looks to be Matt Ryan. I’ve said multiple times that Ryan is the best young player in the NFL, but Ryan will actually be 28 this season. This is the peak of his career and the Falcons may let him play things out. Signing him at 29 to a 5 or 6 year deal makes much less sense than locking him up at 28, though that is a better option than tagging him and then signing him at 30. Ryan probably should have been extended last season with the Falcons having plenty of options later in his career to use him to rebuild or to hope he is one of the late career success guys.

Jay Cutler will turn 30 this year, his final with the Bears. The Bears best option with him is to let him play the year out, tag him, and try to trade him to a team like the Browns or Buccaneers who will likely bid high in desperation for a QB. Phillip Rivers still has a few years remaining on his contract but with almost  no dead money the next two years this is essentially a free agent year for him. He will be 32 in 2013 and the Chargers should be doing everything in their power to trade him and get younger and cheaper at the position.

The young guys are all strong candidates if the play warrants it. Matt Stafford and Josh Freeman are only 25. I don’t think either has shown enough to be extended now though Stafford’s cap numbers may force the issue. Newton, Andy Dalton and Colin Kaepernick will all be eligible after this season for extensions. Their ages will be 25, 27, and 27 respectively, making Dalton and Kaepernick both very interesting decisions if they have decent seasons. They will be at that age where waiting is counterproductive once you have made the decision that the player will be your starter for the next few years. Better to make mistakes early in the lifecycle than later in it, which should push teams to extend players like this even if some questions persist.

The following table lists the veterans in the NFL and what their effective cap charges are over the entire terms of their contracts. $/percent represents the dollar figure paid for the chance to get to the Championship round. The more expensive the worse the deal is in terms of cap management.

qbtable

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