Thoughts on Eric Fisher’s New Contract

With a flurry of new contracts coming in I wanted to give some quick breakdowns and thoughts on the contracts. Party I wanted to do this because Ive been getting some questions on the deals but also because I think in general we are going way overboard on the guaranteed portions of the contract which sometimes mean something different. I’ll start with Eric Fisher of the Chiefs whose contract was first broken down today by Terez Paylor of the Kansas City Star.

Fisher’s 4 year extension is worth $48 million in new money and has $40 million in guarantees across four seasons. $12 million a season  is pretty rich for a player who has not exactly been a standout but you can read my thoughts on that topic elsewhere. That said after seeing the details of the contract I’d call this more of a salary cap maneuver which actually has some interesting benefits for the Chiefs if Fisher works out.

Too often we see big guarantee numbers reported with little context. I think this is one of those situations. Don’t get me wrong $40 million in injury protection and $22 million in real protection is nothing to sneeze at, but those numbers don’t tell the full story. Fisher was already under contract in 2016 and 2017 for $15.33 million. That salary was already injury guaranteed and we can be pretty sure that he would have had to fall off a cliff to not be on the Chiefs roster in 2017, so we really should be looking at his guarantee not as $22 million but as being worth $6.67 million which is not nearly as impressive sounding.

To Fisher’s favor they negotiated a favorable vesting schedule for his 2018 salary so that is salary that is virtually guaranteed at signing. Being that there would be almost no reason to cut him in 2018 he’ll also earn a small guarantee on his 2019 salary. All told the true virtual guarantee on the contract is about $17.967 million in new money.

I would think that the Chiefs thought process here was that Fisher was going to be a likely tag candidate after his contract expired. This is logical considering the use of the tag on players like Cordy Glenn and some of the other recent contracts given to tackles. This past year the franchise tag for an offensive lineman was $13.7 million. That number has grown pretty steadily over the last few years and I would think it is fair to estimate that in two years the new figure would be between $15.5 and $16.5 million.

Fishers new money he will earn by 2018?  $16.4 million. So essentially all the Chiefs did was pre-buy the franchise tag and assume the guaranteed risk now in return for cap flexibility. Fisher’s new contract will essentially carry the same cap number this year, $2.4 million less than his original 2017 number and around $2 million less than the 2018 tag value.

The only other risk taken on by KC here is that small early vesting guarantee in 2019, which they would gain back anyway if he was cut and signed with another team. Because they did not use a massive signing bonus ($12.5 million) the dead cost to cut him in 2019 will be reasonable at under $7 million.

If we look at this contract as a franchise tag pickup and a three year option the Chiefs did extremely well for themselves. Fisher’s final three seasons average $10.53 million in salary and there is the ultimate flexibility to release if he were to falter in the last two contract seasons. He’ll be 31 when his contract expires and they can keep him at a reasonable salary if he is still playing well enough to stay in the NFL.

Contrast that with the Chiefs waiting on the tag decision. His salary is still virtually the same the next three seasons and the cap flexibility is much less. An extension at that point would conservatively cost the team close to $45 million from 2019 to 2021, a difference of $4.5 million a season. That is significant. They lose that flexibility to cut as the first two years of the new contract would be fully guaranteed and the 3rd year likely injury protected. He’d still be under a high paying contract when he makes the turn past 30 and cost the Chiefs some decent coin against the cap to release him. None of that is an issue now that they extended him.

Was this Kansas City’s reasoning behind extending Fisher now?  I have no idea, but taking a critical look at a contract rather than just being blinded by the numbers can sometimes better explain why a player ends up receiving as much as he does.  It is also worth pointing out that despite his $12M APY the actual cash of his contract trends below the other players earning that much. That is the one advantage a team can sometimes get by signing a shorter term contract in order to meet an APY demand from a player.

Overall I like how this could work out for Kansas City. I cant blame Fisher for taking the deal as he has not been much more than an average player thus far in his career. Despite some of the players who have landed on the franchise tag in recent years I still wouldn’t consider him a likely candidate so taking the guarantee is a reasonable gamble. If he does turn into a big time player the Chiefs have him on a pretty big discount. But even if he just stays average odds are they may have done a similar deal to this anyway down the line and cost themselves flexibility. Id give the Chiefs a much less chance to lose in this contract.