At face value I admit the numbers sound crazy. Even after winning a Super Bowl and earning MVP honors it seems to be out of this world to think that Joe Flacco is worth $20 million a year. I mean Flacco has yet to throw for 4,000 yards in a season. He has never thrown for 30 TD’s. For the most part he was considered a caretaker of a team that featured Ray Rice running the football and wanted a QB that would not put the defense in a bad position on the field. Just last year his own teammates seemed to wonder if he could carry them to the promised land.
Flacco’s case seems to be built on, even prior to the Super Bowl, was postseason success, regular season team wins, durability, and last minute comebacks. Why are these the main points of contention? Because statistically he can not compare to the elite players in the NFL so he has to look at the softer factors when negotiating with the Ravens. In some respects this is what happened with Mark Sanchez and the New York Jets who extended the QB based primarily on soft factors like team wins, playoff wins, and draft status. That’s not to compare Flacco and Sanchez. Flacco is Joe Montana compared to Sanchez. It’s just to illustrate a point of the only case that can really be made.
Flacco’s argument really centers around three contracts and three players. The first is Matt Schaub of the Houston Texans who Houston inexplicably gave a $62 million dollar extension to this past season. The annual value at $15.5 million a year puts him above Ben Roethlisberger and Phillip Rivers who were both considered infinitely better players, especially Roethlisberger who has been to three Super Bowls. At the time of Schaub’s extension he had been to the playoffs a grand total of 0 times. He was injured in 2011 and his lifetime record in Houston was 32-32. While Schaub did have one year where he led the NFL is passing yards that was a lifetime ago in 2009 and in general he was considered a caretaker QB and his limitations were badly exposed in the playoffs this season.
I think Schaub is clearly the market pusher for the position. He was different than a player like Kevin Kolb or even Sanchez in that Schaub was a known quantity when he signed. There was no remaining upside or downside. He is what he is, and normally you would expect that to be in $12-13 million a year range. The fact that they pushed the number as high as they did with almost half of the deal coming in the form of real guarantees is an eye opener and market mover. Immediately this jumps the market for Flacco by 20-30% because everyone now needs to adjust to the Schaub deal. So if you are saying to yourself that by no means should he earn more than Roethlisberger the Schaub 20-30% market correction jumps a Roethlisberger salary to between $17.6 and $19.1 million a year. On its face it sounds crazy, but that’s the way the position is now headed salary wise.
Now that doesn’t push Flacco into the highest paid in the game category, but that is where the two other contracts come into play. The other players are Eli Manning and Ben Roethlisberger. Forget for a minute that Eli Manning has two Super Bowl MVPs and nearly threw for 5,000 yards in 2011. What we need to be focused on is what Eli Manning was not what he became. Same goes for Roethlisberger. When Manning signed his 6 year $97.5 million dollar contract back in 2009 he had only won one Super Bowl. He barely snuck over 4,000 yards and, in general was throwing for around 3,300 yards a year. He never threw 30 touchdown passes.
Big Ben was in a similar position. His near $88 million dollar deal that he signed in 2008 came as a QB who just once hit the 3,500 yard mark (and barely at that) and in two of his four years had not even reached 3,000 yards passing. He did have a Pro Bowl nod off his one 30+ TD season and he did win a Super Bowl in 2006, but, like Flacco, was considered something of a caretaker who was tough as nails that was able to make plays when it counted.
The important thing to note with these two players is the timeframe and what those contracts meant at the time. Eli’s brother, Peyton, almost universally regarded as the best QB in the game, was earning $14 million a year. Tom Brady was making $12.1 million. Donovan McNabb made $12.1. Brett Favre I believe was at $12.5 million and Kurt Warner was at $11.5 million. Drew Brees was only at $10 million and Donovan McNabb was just under $9.1. Favre and Warner were both well into their careers, but the other players were more or less on their first real money, post rookie contracts, similar to the position Eli and Ben found themselves in in 2008 and 2009 respectively.
When Eli and Ben signed, Peyton and Brady had 4 Super Bowl wins between the two of them. McNabb had been to a Super Bowl and Brees was setting passing records in New Orleans. The four had 18 Pro Bowls nods among them when Roethlisberger signed and 20 when Manning signed. Maybe we don’t think about it as much now, but back then these were landmark contracts that pushed the market the same way that Flacco is looking to push the marketplace.
Roethlisberger’s contract represented an increase of 4.75% in new money APY over Peyton Manning’s contract at the time. Maybe some looked at that as more reasonable since Ben had two years remaining on his contract at the time making the effective value of the contract $102 million at $12.5 million a season. There was no such ambiguity when the younger Manning signed his contract. It represented a 17.9% increase in APY over his brother’s deal in new money and even if you took it as a 7 year contract and included the old money it was still a 7.14% increase in value. Even today nobody would dream of saying Eli is better than his brother. More clutch in the playoffs perhaps, but not better.
Now I have no idea if this is the argument that has been made behind closed doors to the Ravens, but if it has not been it should be because it’s the only logical way to justify such a pay for Flacco. Since the class of 2004 it has really been a series of misses so Flacco is going to represent the new market reset for a series of young QB’s and in that respect this contract is more important to other NFL Quarterbacks and Teams than just a number for Joe Flacco.
When Roethlisberger received his contract in 2008 he really set the floor for that generation of QB. It was that number that helped Eli and his team negotiate what ended up being a ceiling of sorts that was going to hold until the next successful prospect came up for renegotiation. Almost immediately after the ink was dry on Manning’s contract Rivers, who was statistically superior but failed to advance to a Super Bowl, signed a deal that fit in between the Manning and Roethlisberger deals. Over time the bigger name players surpassed the Eli contract to take their rightful place in the hierarchy but with Schaub and Michael Vick within breathing distance of Manning it’s clear that the market is ready for a reset.
Flacco’s contract is going to set a barometer for Matt Ryan and Matt Stafford, the next two big young guns to get their first real extensions, as well as Josh Freeman and Cam Newton. Whether Flacco is the high mark or low mark is going to depend on if any of these other players can grab the postseason success Flacco has. If Ryan was to win a Super Bowl he would easily jump Flacco, but for now they all may be forced to play Rivers to Flacco’s Manning.
So from that perspective what Flacco is asking for is not that crazy. It’s happened before and will likely happen again. In the past there used to be outlandish rookie deals that made it clear that the market was ready to move, but with those out of the equation poor decisions like those with Schaub and Vick will be the new drivers that inform everyone the market is ready for change. Flacco performing well in the playoffs came at the perfect time and he is going to hit a big payday.
In looking at the top of the market we have Drew Brees making $20 million a year. Based on the Roethlisberger contract, that would put Flacco in line for a payday of $20.95 million a year. The Manning deal would push it to an enormous $23.57 million a year. I would think if the Ravens do give in it will come in closer to the $20.95 million number. When Manning signed there was already Roethlisberger’s deal to base something on. Manning also has a number of soft factors that work in his favor including his last name, draft position, and a bigger fanbase and market that pushes value. Flacco who plays in a smaller market and was never supposed to be a savior can’t meet those same soft factors that Manning had working for him.
Brees will earn $60,500,000 over the first three years of his contract, $40 million of which is fully guaranteed and most likely the full amount virtually guaranteed due to the large signing bonus that he received. The remainder of his contract will likely never be earned unless Brees maintains an extremely high level of play. Based on the Manning and Roethlisberger models Flacco should earn anywhere from $66-$70 million over the course of the first three years of the contract. How much is probably based more on cap needs for the Ravens than demands by Flacco. That is quite a haul and is going to make a new generation of young stars plus a generation of established stars, which includes Ben, Eli and Aaron Rodgers, chomping at the bit to get their last shot at free agency.
I think that does bring up an interesting point that teams may need to confront in the near future and that is the overly heavy investment in the QB position which has the potential to get extremely high if Flacco is able to pull this contract off. Brees’ salary is about $4 million more a year than the next closest positions, which are WR and DE, and the gap between QBs and everyone else is growing. However the high priced QB is no longer pulling off the Super Bowl wins that are expected of them. Of the last 14 Super Bowl champions only 3 have been of the ultra high priced variety- Peyton in 2006, Ben in 2008, and Eli in 2011. Roethlisberger in 2008 was still part of a team at that stage as the transition to being his team was not really complete so in many ways its two players in the last 14 years. The only other mega money QBs to reach the game were Manning in 2009, Brady in 2011, Brady in 2007, and Roethlisberger in 2010. QB’s are earning money for winning the Super Bowl, but it’s questionable whether the league may be pushing too hard at one spot to the detriment of the overall team success. That will be a discussion for another day, but Flacco is going to be the catalyst that gets that discussion started when his contract becomes the new floor for a large group of talented QBs that are playing in the NFL.
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.