Thoughts on Cameron Wake’s Extension

Late last week the Dolphins signed Cameron Wake to a new contract that would add an additional season onto his existing contract.  While I hadn’t really had a chance to look much into it until tonight my gut feeling was that it just sounded like a strange deal, which was originally reported as two new years for $14 million and $10 million in guarantees.  When you consider that you have a player who will be 34 years old and is coming off an Achilles injury normally you would expect the player to get squeezed by the team not extended. Looking at the numbers, though, it may not be as odd as I originally had thought.

I guess I should start by saying that Wake is a terrific player. He has three years of double digit sacks and was well on his way before his injury to doing the same last year. The fact that somehow he tore his Achilles and completed a play is absolutely amazing.  He’s been shortchanged since day one by Miami and well outplayed the contract value. But teams generally don’t pay for the past.

The Dolphins held Wake’s rights for this season for a non-guaranteed $8.4 million and a cap charge of $9.8 million. While it’s not uncommon for teams to do veteran extensions for the purpose of cap relief the Dolphins did not have cap concerns this year. They had such a quiet offseason that the money they created with the Ndamukong Suh restructure ended up never really being used. So the cap relief (they got about $1.3 million) was really never an issue.

The new deal will increase his effective guaranteed compensation to $10.125 million, which will be paid across two seasons, not three as originally reported. So at the least Wake received a $1.725 million raise for this season. In return the Dolphins get the opportunity to have a 35 year old Wake for one more season at a new money value of $5.725 million. While my gut reaction is why take on that added risk, when I started to look a bit more at the landscape and the numbers I see the logic much more in Miami making the move.

While Wake has never gotten the acclaim of some of the other players I will mention, I think it is fair to compare him to players like Julius Peppers and DeMarcus Ware. Peppers, coming off a year where he looked like he could have been done, was able to land a contract at age 34 with the Packers that averaged $8.67 million a year. Ware got squeezed into a pay cut but has a contract that will carry a base value of $6.5 million and can max out at $10 million based on his performance. He may have gotten more on the open market.

So if the Dolphins believe that Wake is going to have a good year this season they probably saved themselves anywhere from $1-3 million by doing this contract. His guarantee would have also been higher overall if they allowed him to play out the deal and then sign a new contract next season. While Wake is older than guys like Terrell Suggs, Tamba Hali, or Trent Cole at the time of signing they all signed pretty lucrative contracts in their 30’s.

The risk is not that much provided the Dolphins are willing to play hardball with Wake next season if he plays poorly this season. Miami has a $3 million guarantee plus a $125,000 workout bonus that are likely the only fixed numbers in that contract. That means Miami has the ability to bring his 2017 salary down to $3.125 million.

If that occurred Wake would only cost the Dolphins an additional $1.85 million for the 2017 season. When you consider Chris Clemons will earn $1.5 million this season, Trent Cole will earn $4.25 million, and Calvin Pace earned $2.125 million last year, all Wake needs is a pulse this season to justify the deal.

I think this also explains the somewhat odd structure of reducing his cap/cash slightly this year for no apparent reason (unless they are cash strapped which I doubt they are). By putting the $3M base guarantee in 2017 they can offer him between $3 and $4 million next year and not lose much. This won’t look like an insulting offer by any stretch even though the bottom line is realistically $2M in new money. Compare that with paying $8.4 million this year and trying to negotiate with him to sign a 1 year, $1.8 million contract next year. That second year number sounds insulting and he is going to earn more than that in any realistic scenario.

Because they gave him no signing bonus this year there is also no added leverage from dead money to allow him to resist a reworked contract. Even if they had to cut him and he signed elsewhere for the minimum that would offset about half of that added $1.85 million guarantee they gave him.  I don’t give Miami a ton of credit because of some of the more outlandish things they do but this is actually a pretty shrewd move by them if they are thinking the same way I am here.  Essentially they can pay him next year whatever he deserves based on this year’s payment and likely make him feel good about any pay cut in the process.

The only risk is if he falls off a cliff and doesn’t belong in the NFL next season. That’s not impossible given his age and the injury he suffered but Id imagine there is a place for a situational pass rusher somewhere in the NFL for $1.8 million who at one time was a great player. Just name value alone would get that contract.

Miami made out ok here. They really protected themselves and I think have most of the upside in this contract.  It’s definitely a good example of ways to work out a deal to where both sides are happy but realistically the numbers will work in the team’s favor.