Thoughts on Joe Flacco’s New Contract

Dan Hanzus of NFL.com has the particulars as it relates to cash flow on the record setting contract for Ravens QB Joe Flacco. It is certainly quite the deal for Flacco, a player who has yet to throw for 3,900 yards in a season. The QB salaries are getting so out of whack with the rest of the league that at some point you are going to see teams suffer for overpaying good but not great QB’s. Flacco had a miracle playoff run, but a contract like this completely disregards 5 years of performance on the field.

That is not to say that this should be a surprise. A few weeks ago I looked at Flacco and predicted he would get a contract close to $21 million a year. Why?  It was the Eli Manning model. Manning, who had a similar career trajectory but with more draft status cache and a slightly better track record, blew the field away in 2009 when he signed his contract worth $16.25 million a season. Eventually the bigger names like his brother Peyton surpassed that number, but Eli had more of less been the standard mark for a QB that was not considered prolific but had some playoff success.

The difference between Eli then and Flacco now is the new CBA. The new salary cap limit is $123 million and the union had to jump through hoops to even get the number that high. The salary cap limit back when Eli signed his deal was $123 million and growing rapidly. Basically there has been no inflation in the cap but the same player salary has now risen greatly. On an APY basis Manning’s deal was about $13.2% of the cap. Flacco’s is16.3%.  Sure Flacco and the Ravens will manipulate that cap figure this year but at some point it will catch up with them and teams will suffer because they spent far too much money on a position, even one as important as QB. Here are some very early (and totally unofficial) estimates of what Flacco’s deal may look like.

Base Salary Prorated Cap Charge Dead Money Cash Flow
2013 $1,000,000 $5,800,000 $6,800,000 $52,000,000 $30,000,000
2014 $6,000,000 $8,800,000 $14,800,000 $45,200,000 $21,000,000
2015 $4,000,000 $10,550,000 $14,550,000 $30,400,000 $11,000,000
2016 $18,000,000 $10,550,000 $28,550,000 $25,850,000 $18,000,000
2017 $20,600,000 $10,550,000 $31,150,000 $15,300,000 $20,600,000
2018 $20,000,000 $4,750,000 $24,750,000 $4,750,000 $20,000,000

These numbers are assuming that this $7 million dollar option bonus is paid in 2015 and is prorated over the life of the deal. Sure some will say that its a 3 year contract where you simple re-do the deal in 2016, but look at that dead money figure. What leverage does a team have to force any kind of market correction when cutting a player costs nearly $26 million on your cap?  Those backend cash flows are important because it more of less gives Flacco a starting point of $19.5 million a year in a renegotiation. Its really absurd.

In my value price model I worked on, Flacco’s regular season was worth about $11.5 million a year comparative to the current marketplace. That is a ton of ground to make up to justify this contract. Its just amazing the way the QB position has been treated in the last 8 or 9 years, really since Peyton signed his first mega-deal in 2004 with the Colts. Think back to the early 2000s. Players like Trent Dilfer and Brad Johnson couldnt cash in. Thats not to say Flacco was along for the ride like they were, its just to point out the way things have changed.  Even Tom Brady could not cash in relative to what others in the league were getting after his Super Bowls.

Green Bay is next up in the crazy QB carousel with a far better QB that is going to look for far more money. They don’t usually give in like this but I would not have expected the Ravens to cave in this badly either. The team that makes out the best in all of this is the New England Patriots who got their QB under a cap friendly contract until he retires. Sure he is much older and likely declining but they have a long term advantage that few teams, unless they have outstanding rookies on their rookie contracts, will be able to match in the salary allotments to field a full roster.

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