The NFL calendar is filled with little dates here and there that are very important for salary cap purposes that sometimes get lost in the shuffle. We are now coming up on one of those dates- July 15, just 9 days away from the time I am writing this. July 15 is the final day that a team can sign their Franchise player to a long term contract. If they fail to come to a contract agreement by 4:00 PM on the 15th the player can only play the season on a one year contract with his current team with no extension allowed until after the conclusion of the season.
I am not a big fan of allowing players to play out the season on the Franchise tag. It compromises your salary cap and puts you right back at square one after the season. Normally when you tag a player the players is an exceptional player and when his contract is up for extension again the following season he is still an exceptional player. His value doesn’t go down it is only going to go up.
Obviously drafting skilled players and hiring the right coaching staff are two major factors in team success, but much of a team’s success, specifically long term, is predicated on efficient and effective contract management. The prime years for most NFL talent is between the ages of 26 and 29. The longer past the age of 30 a contract runs and the more dead money linked to those post 30 years the more compromised a team becomes in the future.
The problem with tagging a 26 or 27 year old player rather than signing a 5 year extension that runs until he is 30 or 31 comes at both the front end and back end of the contract. For example Anthony Spencer of the Cowboys had proven himself to be a pretty solid player thru 2011. Dallas had him play the year out on the tag in 2012, when he had just turned 28. Spencer did nothing to decrease his value as he is playing in the prime of his career, and if anything increased his value in free agency.
Rather than locking him up at 28 years of age the cap-strapped Cowboys put $8.85 million on their cap instead of using the benefits of proration and contract management to limit the cap obligations on the front end. Now 29 the Cowboys have tagged him again, this time at $10.63 million, contributing in part to the execution of a string of bad contract restructures to be cap compliant in 2013.
The Cowboys, who have called off negotiations with Spencer this season, supposedly still want to do a long term deal after this season. Assuming they do so they will have paid Spencer around $19.5 million in cash and cap for 2012 and 2013 and will now be stuck in a contract with him until 34 or 35 years old, with him likely earning the same deal and guarantees he would have earned back in 2012 with the Cowboys having an option to release at 31 years of age.
The only times the franchise tag is acceptable, in my opinion, is if you have a question mark “one season wonder” or it is an player on a win now team that has no intentions of ever re-signing the player to a long term deal. When the Carolina Panthers tagged Matt Moore it made sense because he was totally unproven and as things turned out he was pretty bad in a starting role and ended up as a backup in Miami. The tag saved Caroline a ton of money. The New York Jets tagging of John Abraham in 2005 fit the second criteria, and helped the team control his rights to collect a first round pick for a player they had many reservations about keeping.
Our look at the positional Franchise players who could get deals done this week:
Branden Albert– Albert will turn 29 during the course of the 2013 season and the Chiefs really shot themselves in the foot by franchising him for the sole purpose of trading him. When they failed to accept what the market would offer they got stuck with a $9.8 million dollar cap charge on a player they don’t really want. Albert is versatile and you can get a few extra years out of that position than some others, but considering where both sides are it probably serves no purpose for the Chiefs to sign him long term, though the cost of the tag has hurt their cap flexibility with the season approaching.
Jairus Byrd– Byrd is 27 years old and one of the best two or three Safeties in the NFL. Bills could be thinking that two years of tagging at a low cost position rather than paying $8 million a year for top end of the market is worthwhile, especially on a team that should experience some defensive turnover in the next year or two. That would cost the Bills an extra $4 million in cap but save them about $4 million in cash over a two year period if benchmarking against Eric Weddle in San Diego. The Bills should extend him but my guess is they will not.
Ryan Clady– Clady is another 27 year old and a 3 time Pro Bowler. The cost of franchising an offensive lineman is high- $9.8 million, but finding a fair value contract for any lineman is difficult. The Broncos are built to win now and may perceive investment at the position not worth the long term cost. I think the decision should be made in part based on how many years the team expects Peyton Manning to start. Considering his salary in 2014 is fully guaranteed it puts Denver in a position to play the tag game again next year as its doubtful they will throw a rookie in at LT with Manning. As a point of reference Jake Long will only cost the Rams $13.5 million in cap over the next two years and an additional $10.5 million if they keep him in the third season. I have not heard anything about discussions between the two sides and they may be financially too far apart, but he is a player that should be signed long term.
Michael Johnson– A head scratcher. The Bengals have no cap issues and Johnson has produced 17.5 sacks over the last two seasons and is a vital part of the defense. He is only 26 years old and would give the Bengals a head start on extending a core of young players that can get very expensive n a few years. They should extend Johnson but may balk at Johnson looking for premier pass rusher money while the market for pass rushers has somewhat shrunk, though none as young as him. The Bengals should work hard on locking him up as the cost to franchise next season if prohibitive.
Henry Melton– Melton has produced 13 sacks the last two seasons and won’t turn 27 until October. Right now the Bears have limited long term visions with a number of high priced contracts set to expire. In many ways you can say the Bears have a cap filled with franchise tags based on the cost, lack of dead money, and remaining seasons on the contract. Paying a DT on the tag is almost worthless due to the high cost compared to positional value. Bears should have never even tagged him in the first place. Based on everything the Bears are doing they are likely just giving one last shot with this group and will let Melton walk after this season.
Anthony Spencer– We discussed Spencer above and the Cowboys have really just botched this from day one. Their best option at this point would be to see if a team was willing to trade for Spencer. Dallas always has an inflated view of themselves and I am sure see themselves as a win it all this year type of club which will be the justification for keeping him this year on the franchise tag.
Randy Starks– Starks will be 30 towards the conclusion of the season and already has nine years of wear and tear on his body. The Dolphins clearly went all in on the season making the retention of Starks very important to the team. He is a solid player for a somewhat underrated defense and should be a key contributor in 2013. At his age a long term extension is really not a wise decision. Older players at this position often end up on lower cost one and two year deals and the Dolphins could look to that model for the future if the market dries up for him next year. He is one of those rare players where it makes more sense to play on the tag then extend, and I fully expect Miami to hold firm on Starks this year.
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.