new york jets

Geno Smith’s Contract Contains No Year 3 Guarantees

Posted on by Jason Fitzgerald

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Earlier today we discussed Geno Smiths contract structure and the potential reasons behind the workout bonuses in the contract. According to Joel Corry the contract does not contain the year 3 guarantees:


So what to make of this then? We’ll its a loss for Roc Nation in that Smith becomes the first QB to not receive a premium in terms of guarantees in the 2nd round. That said it does give Smith an opportunity to earn actual cash faster than his peers, specifically in the 4th year of the contract, a year none have any guarantees.

I think for the Jets its a win. They didn’t cave in on somewhat of a precedent that had been set by some more difficult to deal with teams like the Bengals and Broncos. The bonuses nearly ensure participation in the event Smith is unhappy with his contract in 2016 and give the Jets a longer time to evaluate him in that 4th year in the event they are turning elsewhere.

For Smith the focus is simply on timing of cash flows. It is better than the rest of his comparison players so in that manner its a win provided he makes it to year 3. The worry for him would be if the Jets are bad this season and have an opportunity to draft a QB then the 3rd year guarantee may have come in handy. As a backup his salary would be low, so I don’t see that as a big concern, but still its puts him a bit behind others who were protected a little more in the event of not claiming the job quickly. If he plays as well as Dalton or Kaepernick the 3rd year guarantee will be no issue.

I would think the contract will be used against Roc Nation if a veteran agent is considering signing a 2nd/3rd round grade QB that he thinks is considering Jay Z’s agency. Its a small bullet point that can be used to discredit the job that was done. If Smith is a star, though, and has his face plastered all over NYC, it will be a moot point. The purpose of signing with Jay Z is about marketing potential and it will be tough to convince someone that they can market the player better than Jay Z will if there is any success shown by the player off the football field.

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Why Does Geno Smith’s Contract Contain Such Large Bonuses?

Posted on by Jason Fitzgerald

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According to ProFootballTalk the Jets have added large workout bonuses into QB Geno Smith’s contract. I speculated yesterday that Smith’s contract would contain at least $100,000 in workout or offseason bonuses but was a bit surprised at the amount that these contain, $690,819. Some speculate that it’s a sign the Jets could be worried about Smith’s offseason dedication while others say that it was a masterful negotiation by Jay Z’s Roc Nation. Which is it?

In terms of offseason money this is the largest amount for a non-first rounder over the final two years of his contract. The prior largest figure was Janoris Jenkins, whose deal contained $684,163 in season roster bonuses, an amount that was chosen because of Jenkins off the field problems. That doesn’t mean it is uncommon to have bonus money, I believe 18 of 32 second rounders had some sort of bonus money last season, just uncommon for it to be of this size. That could indicate some issues with Smith that the Jets are trying to ensure don’t pop up.

While the Jets in the past have been big workout bonus believers, their new GM, John Idzik, has come from a system where the offseason money is not a priority. Considering the Jets let go of the teams lead contract negotiator it is highly unlikely that they would be looking at workout bonuses as a main component of contracts. Again this paints a unique picture for the GM making this a somewhat unique situation.

On the other side of the coin offseason bonus money is always in the players favor as it forces a teams hand to release a player early or pay him. It’s almost like having a “no-offset guarantee” clause in your contract if you make it through workouts or a roster bonus date.  In terms of cash flow it is beneficial to get more money early rather than needing to wait for the season to begin.

Again its not uncommon, specifically for the QB. Colin Kaepernick had $200,000 in workout bonuses with the 49ers. Andy Dalton received $200,000 in reporting bonuses from the Bengals. Brock Osweiler has $349,245 in roster bonus money coming his way from the Broncos. So the precedent for the bonus money is there and in all of these cases this was money pushed for by the agents to improve the cash flows to a very highly valued asset.  Osweiler’s situation is probably the most unique because of the presence of Peyton Manning which is why he pushed for high roster bonuses rather than the later bonuses the others received.

So what was the purpose of the high bonus?  First I would say it depends on the guarantee structure of the contract. As of typing this I do not know  if Smith’s 2015 base salary was guaranteed. I would assume that it was based on former treatment of QB salaries. Dalton received a guarantee on his 3rd year salary. Kaepernick had close to $600,000 of his third year salary guaranteed. Osweiler, selected much later in the round, received his first two years guaranteed. All of their contracts, more or less, represented a premium in guarantees over the slot. That is the QB premium I talk about that exists in the draft.

If Smith did receive a full $585,000 guarantee on his P5 in 2015 that is a big win for the player. The presence of the workout bonus in this case essentially guarantees him  a full guarantee on his third year. That is better than Kaepernick and puts him in the same category as Dalton, both players drafted a few slots higher. That’s a big win.  If there is no year 3 guarantee then Smith lost big and the workout bonus was just a compromise to cover for the guarantee. That will be a big blow for Jay Z’s first client in the NFL and one that will be used against him.

The Jets tied all his extra year 3 and year 4 compensation to workouts, normally meaning something like 70-80% attendance. As I said before the number is a surprise especially given Idzik’s track record.  It may not have anything to do with Smith the player, as is being speculated, but more Jay Z the agent. The Jets have to assume that Smith is going to be their QB of the future. The NFL permits contracts to be renegotiated after the 3rd season in the NFL. This agency is a complete unknown around the NFL and there could be a feeling that Smith is going to be advised to holdout in the future to make it known that he wants a new contract.

The workout bonus gives the Jets protection for that in year 4. A roster or reporting bonus can allow Smith to collect without being present in the offseason, staging a bit of a mini-holdout as we have seen others do. The large workout bonus makes it almost mandatory for Smith to participate even if unhappy with his contract status. About 40% of his 2016 salary is connected to workouts now. That should at least help, a little bit, the potential of an agency turning the offseason into a big story about contracts. The Jets have been down this road multiple times with Darrelle Revis.  Idzik himself even saw a little bit of this last year when someone starting floating a story about how Russell Willson was underpaid and was going to demand his contract redone, even though the CBA didn’t allow it. It was likely a bogus story from the start, but it takes the focus off football.

So when the details of the contract are official we can make a better determination of the whys of the contract. If that guarantee is missing from 2015 then it was a win for the Jets side and they have likely tried to protect themselves from any outside forces keeping Smith from attending the offseason programs. If the guarantee exists then Smith’s team did a really good job and maybe the Jets felt that this was the best protection they could get in the future. We should know the answer later today.

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My take on what the Jets should do with Mark Sanchez (if he’s not the starting QB)

Posted on by Andrew

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Since I started writing posts here on OverTheCap.com, I have rarely, if ever, written about my beloved New York Jets. Jason does an incredible job covering every move the team makes, so there is never anything to add. However, with the Jets set to entertain a quarterback controversy (…again), I want to take a minute and write about a scenario the Jets may be facing, the question of what to do with Mark Sanchez if he isn’t the starting quarterback next year.

As we all know, the Jets quarterback situation isn’t exactly stellar and so the team is set to host a competition for the starting job come training camp. With the abrupt retirement of David Gerrard, we are left with two realistic options to win the job, incumbent Mark Sanchez and touted rookie Geno Smith (no, I don’t count Greg McElroy). In terms of skill, the competition could go either way. Nobody quite knows what the Jets have in Smith just yet, and there’s an argument to be made new Jets coordinator Marty Mornhinweg’s offense is as best a fit for Sanchez as any scheme he’s been in since entering the league in 2009. It wouldn’t shock me if either one outperformed the other come camp. For purposes of this post, let’s assume Geno Smith wins the job and is under center against Revis and company on September 8th. At this point, you’d have voices screaming from every direction as to how handle Sanchez.

There are really two ways the team could go here. The first option is to keep Sanchez on the roster as Smith’s backup. Many would say he’s a better backup then the free agent scrap heaps that remain, and that’s certainly a fair statement. But, if Sanchez remained on the roster all year and wasn’t the starting quarterback, it could create a headache that no one needs. If Smith succeeds, we’re sure to get many camera shots of Sanchez looking glum on the sidelines during games. If Smith struggles, we’ll certainly read a ton of stories about Sanchez looking over Smith’s back, ready to pounce on the job before Smith could truly grab it. I’m sure we’ll even hear how Sanchez looks like a new man in practice, much like we heard during camp last season. This is not the route I would take, but you can certainly understand where people are coming from who would argue Sanchez is the best option as a backup QB. The other option would be to release (or potentially trade) Sanchez prior to the season’s commencement and either sign a new backup or roll with McElroy or someone else competing during camp. I feel confident in saying thiis the choice many Jets fans would prefer. However, whenever you hear talk of Sanchez’ release, you always hear the cap “experts” on TV say it’s, “not a possibility based on the Jets cap situation.”

If you were to listen only to the folks on ESPN, it would quite honestly be a reasonable assumption that the Jets were doomed to go 1-15 next year (hell, let’s say 0-16 for the next decade, just for fun) solely due to cap issues. However, if you’re a reader of this website, you know that the Jets cap issues were vastly overstated.  If you want to argue the Jets aren’t a good team based on talent issues, that’s fine. But to say the team is in “cap hell” shows a lack of homework on the part of the speaker. The team made the no-brainer moves of releasing unproductive players that yielded high cap savings, guys such as Bart Scott, Calvin Pace, Eric Smith and Jason Smith. Of course these savings were not contemplated by the people reporting these issues. These releases saved the team nearly $30 million in cap room (Jason Smith saved $12 million alone!).

Back to Sanchez. Again, we are assuming Geno Smith is the team’s starting quarterback at this point and the team wants to release or trade Sanchez. What are the cap implications? Well, let’s say he’s released out of the blue today. The Jets would suffer a dead money hit on their 2013 salary cap of $17,653,125.  This consists of his guaranteed base salary, workout bonuses, and accelerated signing bonus prorations. However, it’s currently May 20th, Smith hasn’t done anything except look decent in rookie minicamp and Sanchez remains on the roster. It is very doubtful right now that Sanchez is getting released prior to June 1st, so lets look at the implications if he’s released after June 1st. As Jason has thoroughly explained on the site before, a June 1st cut spreads out the dead money hit Sanchez would cost the team. If Sanchez were cut after June 1st, the Jets would suffer a 2013 cap hit of $12,853,125 from his guaranteed base salary, 2013 signing bonus proration and $500k workout bonus. The Jets would then suffer a $4.8 million dead money hit in 2014 due to the acceleration of his bonus proration in 2015 and 2016 (on top his 2014 proration). Either way, the Jets are suffering the same cap hit, it’s just a matter of when.

Now, let’s just go back to the Jets salary cap for a second. The team has an estimated $11,743,505 in cap space for 2013 (which includes Sanchez’ 2013 hit of $12,853,125). Additionally, this includes those draft pickss that are signed, but does not include the estimates for those who remain unsigned (The Jets 2013 cap number for all draft picks is an estimated $6,916,58). If the Jets cut Sanchez today, another chunk of $4.8 million eats into that space (that $4.8 million is from his accelerated bonus proration). So, could the Jets release Sanchez today and absorb the full hit? Yes, they could. It wouldn’t leave them with much room at all though, and they still need to account for signing a new backup (if they don’t stick with McElroy or someone else on the roster) and any injury replacements. It would be tough to swallow, but it’s theoretically possible. As mentioned above though, if the Jets do release Sanchez, it would likely be as a June 1st cut where his cap hit would be spread over this year and next. If this happens, the estimated cap space listed above wouldn’t change; Sanchez’ 2013 hit would be the same as if he were here (the Jets would then just suffer the $4.8 million hit in 2014).No matter which way you look at it, the cap situation isn’t 100% stopping the Jets from making the move.

Many people would scream, “Why would the Jets suffer a 2013 cap hit to release Sanchez that’s at the very least, equal to the amount the Jets would suffer if Sanchez were on the roster?” Very reasonable question. It’s definitely not the most financially prudent move in the world. But, the benefits from other places may outweigh the negatives suffered from the financial imprudence. Despite all the numbers and cap figures thrown around, this is still, you know, a football team (I know, hard to believe sometimes). There are other considerations besides those numbers and cap figures. It’s not going to be financially sound regardless of what the Jets decide to do. Aside from the options I listed above regarding his release, Sanchez will either be an extremely high-paid backup that will be a constant distraction (through no fault of his own – Sanchez likely would play the good soldier), or, if traded, the Jets suffer a hit on their cap anyway due to covering part of his salary AND for the bonus proration that would accelerate into 2013 (similar to Revis’ prorated bonus amounts accelerating in 2013 due to the trade). There is simply no escaping a significant salary cap commitment to Mark Sanchez right now, but there IS escaping the media and locker room headache that comes with it. The Jets are clearly not sold on Sanchez progressing to where they need him to be, they wouldn’t have spent a second round pick on a quarterback if they were. There are available ways out of the Sanchez situation, we’ll see if the team decides to take any.

Twitter: AndrewOTC

Check out Mark Sanchez’ contract page here.

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The Depressed Cornerback Market and Darrelle Revis

Posted on by Jason Fitzgerald

So what exactly is going on right now with the Jets and Darrelle Revis? It is clear that the Jets were at one point shopping him. There were far too many stories from too many sources for it to not be true. The other day it was reported by, I believe, Peter King that the Tampa Bay Buccaneers are willing to give up a 1st and 2nd round pick in the 2014 NFL Draft for Revis. Manish Mehta of the NY Daily News followed up with a report that the Buccaneers were willing to pay Revis $12-13 million a year. Last week the Jets seemed to have a soft deadline to trade Revis due to a $1 million dollar roster bonus that he earned at 4PM on March 17th. The day came and went and the Jets are now on the hook for $1 million in both cash and cap to a player who they are supposedly trading. Now word is that teams aren’t even sure if the Jets are really looking to move him. Weird isn’t it?

Old readers of mine from nyjetscap.com know my feelings on Revis and his relationship with the team. For new readers I don’t think there is any love lost between the organization and Revis. Revis has held them up twice now and was prepared to do it a third time last season before he realized that the Jets held all the contractual power in the world over him and he had no choice but to play on his current contract. When it was floated out there, even while injured, that Revis was again looking to be the highest paid defensive player in the NFL it more or less makes it a no brainer to trade him. The Jets were not a good team with Revis and allocating that kind of money to him is pointless given the teams situation.

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However all of the posturing by Revis was based on an assumption that teams were willing to pay an incredible amount of money for his services.  Now paying the type of money Revis was looking for is fools gold for any corner, even one as great as Revis, but it would not stun me that a team would pay it. I mean the Raiders did it for Asomugha and the Bills did it last year for Mario Williams one of the most overrated pass rushers in the league. This year players lined up looking for big money in free agency but the market changed and nobody got the money.

This time last season the NFL cornerback market had 6 players with an APY over $10 million a season. 11 players were over $9 million and 17 players made over $8 million. The new market is 4 over $10 million, 7 over $9 million, and 11 over $8 million. Overall this is the new marketplace breakdown:

2013 Average APY

2012 Average APY

Percent Change

2013 Median APY

2012 Median APY

Percent Change

Top 5

$10,379,000

$10,906,200

-4.83%

$10,020,000

$10,750,000

-6.79%

Top 10

$9,658,633

$10,305,933

-6.28%

$9,750,000

$10,000,000

-2.50%

Top 16

$8,786,834

$9,670,511

-9.14%

$8,470,667

$9,636,667

-12.10%

Top 32

$6,911,929

$7,635,034

-9.47%

$6,583,334

$8,005,674

-17.77%

It is not as if one can argue that this was a bad market for corners this season. At least two corners, Sean Smith and Aqib Talib, were considered franchise tag candidates this offseason. Smith ended up getting a 3 year deal worth $5.5 million a season and Talib settled for a 1 year contract at $5 million. Brent Grimes, coming off injury, is still waiting to sign a contract. The best deal of the offseason may have been signed by Kyle Arrington, a hybrid number 2/slot cover corner that received $7.5 million in cash in the first year of his contract, the 2nd highest of any corner this season.

Comparing free agency last season with this one shows a startling picture of where the market is headed. Based on my own recollection (which may be off a bit) the biggest offseason deals signed in 2012, based on APY, were those of Brent Grimes, Brandon Carr, Cortland Finnegan, Ladarius Webb, and Stanford Routt. This years top 5 contracts are those of Cary Williams, Smith, Keenan Lewis, Chris Houston, and Talib. This is the average of the two classes:

Total

APY

Guaranteed

% Guaranteed

First Year Cash

2012

$35,676,200

$8,926,867

$15,079,200

42.3%

$9,619,200

2013

$17,810,000

$5,255,333

$7,118,000

40.0%

$6,573,000

Percent Change

-50.1%

-41.1%

-52.8%

-5.4%

-31.7%

It is a complete devaluation of the position in 2013. Teams just do not want to spend on it for a number of reasons ranging from the spread offense to the lack of a large number of dominant WR/QB combinations in the NFL. To think that will change next year is probably wrong. Right now you can get Chris Houston and Aqib Talib for less than it costs to get Revis alone. No matter how great Revis is from a cap standpoint he is a clear loser in this market.

My gut instincts tell me that when the Jets were out in Indianapolis putting feelers out there for Revis and also surveying the market in the first real, even if off the record, negotiating sessions they had a good idea of where teams were headed with the salary cap and positional spending. They knew the cornerback market had a good chance to collapse and that there would be few teams willing to entertain the type of money offers Revis wants. If the Jets do not pull a trade with the Buccaneers, one of the few teams that would be willing to meet Revis’ asking price, Revis is going to have to prove he is 100% healthy to get a decent payday. Even then if a team like the Bucs has a bad season they will likely not overspend for a Revis. That is a team that thinks they can compete, but another losing season and they will quickly change their outlook.

With all of this in mind this may be a situation where the Jets realize there is an opportunity to keep Revis in New York. The most I felt, pre-injury, a team should pay for Revis is $11.25 million based on some crude stat analysis but understood his standing in the NFL and thought that could max it between $12 and 13 million. While that would be overpaying it would not be so egregious that it destroyed your team financially. Now in this new marketplace the Jets may be thinking that by rolling the dice they can get Revis for $11-$12 million a season. Not only does that keep Revis a Jet but it keeps the fans happy with a team that has a bleak outlook in 2013 and gives the Jets a marketing tool as they struggle to sell out the upper deck of the stadium.

Financially the Jets can make this move if they need to. An interesting move that the Jets made a few weeks ago was the restructuring of CB Antonio Cromartie’s contract. Most thought nothing of it at the time since the Jets needed cap relief and he was an obvious candidate. What struck me as odd, though, was that the Jets did not extend him. By extending Cromartie they could have brought his cap number even lower and not dealt with the near $15 million dollar cap figure he has in 2014. With the way the market was at worst they would have extended him under the same $8 million APY of his current contract.

However had they extended him they were locking themselves into Cromartie as their future number 1. Releasing or trading him next season saves $9.5 million in cap room, more than enough to offset a Revis return. They would not have been able to release him if an extension was executed. So looking a bit deeper into that move may have been an indication that the Jets don’t see the door as closed on Revis as we all believe.

Now that doesn’t not mean the Jets wont trade him. I think the issue here is they need something in this years draft to move him. Waiting until next year where positioning and draftees are a complete unknown is not a reasonable return. All along I have said they need a 2nd this season and a potential 1 next year. I think if the Bucs made that offer tomorrow the Jets will take it. But if they don’t the Jets have a window now to get their corner under contract under their terms. The longer Revis waits the more chance there is that he gets re-injured or doesn’t look the same. The way the market is going proving he is 100% doesn’t mean $16 million anymore in free agency. It may not even mean $13 million. Unless the Jets are going to lowball him on an offer he can probably get almost as much now as he will after having a year like he had in 2010 or 2011. Is an extra $1 million a year worth that risk to him?  The Jets might think its not.

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