Writers of Pro Football Prospectus 2008

20 May 2008

Ryan, Third Pick, Gets More Money Than Long, First Pick

Jake Long's deal: Five years, $57.75 million, $30 million guaranteed.
Matt Ryan's deal: Six years, $72 million, $34.75 million guaranteed.

Ryan is a quarterback and Long is a tackle, and that obviously plays a part in this. But as Peter King notes, "NFL teams had been trying to hold down rookie salaries this year ... But $34 million guaranteed for the third pick will surely draw the ire of other teams and general managers trying to hold the line."

Posted by: Vincent Verhei on 20 May 2008

31 comments, Last at 30 May 2008, 5:08pm by pastorfrank

Comments

1
by lionsbob (not verified) :: Tue, 05/20/2008 - 5:07pm

The Falcons are paying a lot for the twin of a dude who started at QB for them last season and was a #3 pick by the Lions in 2002.

Yes I think Matt Ryan right now compares well to Joey Harrington when he was drafted.

2
by Jimmy (not verified) :: Tue, 05/20/2008 - 5:13pm

The Dolphins gave Long $6m of guaranteed money per year of the contract.

The Falcons gave Ryan $5.8m of guaranteed money per year of the contract. Doesn't seem like the Falcons got much of a discount for the bigger signing bonus. If a big bonus up front doesn't equate to a longer contract at otherwise better value why do teams even bother to sign these guys to contracts longer than three or four years. That way you could keep your bonus money in your pocket, in a few years it could go towards the signing bonus you have to pay a veteran about to enter the peak of his career. Or do teams realistically have very little control over the length of the deal?

3
by Tom (not verified) :: Tue, 05/20/2008 - 5:21pm

Re 2:

Most teams want as long a deal as possible with rookie because if they turn out good, you have them on the cheap. Also, it makes your position for renegotiating stronger. Players are less likely to hold out if they still have 3 years left on their deal compared their contract year.

4
by mattman (not verified) :: Tue, 05/20/2008 - 5:39pm

#3 - the problem is that with the salaries paid to the top 5 or so picks, you DON'T get them cheap even if they wind up superstars. These draft picks get the same money (if not more) as the very best players at their positions. Reggie Bush's rookie deal was nearly as big as the one given to Shaun Alexander, which happened to be the biggest RB contract ever.

5
by lionsbob (not verified) :: Tue, 05/20/2008 - 6:04pm

At the beginning (or the first 2 years), the final 4 years are usually a lot more cheaper. Joe Thomas is going to be making 1.4 million in his 3rd year, Reggie Bush's deal is now only 2.25 million. Once the signing bonus is finished (usually in the first 2 years) the contract is a deal.

6
by mattman (not verified) :: Tue, 05/20/2008 - 6:20pm

Since when are signing bonuses done after the first two years? Bonuses are almost always prorated over the full length of the contract. In fact, I think the cap hit for a signing bonus is always spread out over six years (or less if the contract is less.) The base salaries for Bush and Thomas might be low, but the cap hit will still be considerable.

7
by Vincent Verhei :: Tue, 05/20/2008 - 6:33pm

The cap hit on signing bonuses is prorated. The actual dollar amount is paid to the player at the time.

8
by Dales (not verified) :: Tue, 05/20/2008 - 8:08pm

#4-- "Reggie Bush’s rookie deal was nearly as big as the one given to Shaun Alexander, which happened to be the biggest RB contract ever."

Yeah, but they've been pretty comparable in value since, so at least in that regard it worked.

9
by Bobman (not verified) :: Wed, 05/21/2008 - 12:37am

#8 OUCH!

At least one has more upside potential over the next, say, 5-6 years. I wonder if some day he'll end up pulling a Desmond Howard--wake up Super Bowl morning and remember that has loads of talent, only to return to semi-bust status when the game is over and the MVP trophy is on the mantel.

10
by Pete (not verified) :: Wed, 05/21/2008 - 2:25am

The Falcons overpaid for Michael Vick and are now paying too much for an unproven asset here.

11
by mawbrew (not verified) :: Wed, 05/21/2008 - 8:44am

Not sure how the salary cap works for suspended players (like Vick). I think they don't count at all during their suspension (assuming the team doesn't release them). But, if Vick ever gets reinstated (and even if the Falcons cut him), the Falcons are going to have some crazy % of their cap tied up at QB. Yikes!

12
by CoachDave (not verified) :: Wed, 05/21/2008 - 10:12am

At this point you have to put Artie Blank squarely in the "Horrible NFL Owners Hall of Fame" with William Clay Ford and Al "Now That I'm Nutso" Davis.

Seriously...is there ANY decision that the Falcons have made since Artie Blank bought the team that hasn't made you think WTF?

I can't think of one.

13
by Will Allen (not verified) :: Wed, 05/21/2008 - 12:15pm

I believe that unless the Falcons prevail in court, and overturn the arbitrator's decision, Vick is going to keep the vast majority of the money paid to him, and that money continues to count against the cap. Ouch, indeed.

14
by cjfarls (not verified) :: Wed, 05/21/2008 - 2:35pm

Yeah, $12/mil per year for a QB is not a deal for the club as a rookie contract, even if Ryan turns outto be a franchise QB.

I agree... if your going to be paying $10 million per year anyway in years 5 and 6, and $5-6 mil/year in guarunteed money, why not just make it a 4 year contract and resign a new deal when you know if they'll be worth the investment.

If he ends up being a stud, you'll want to sign a new deal in year 4 or 5 anyway to lock him up long-term. Is the potential of saving a couple million (if they are great, and you're stupid enough not to reign them) in years 5 & 6 years really worth the risk?

If he ends up decent, you're paying him $8 or $9 million per year, which you probably could've resigned him (or equivelent) for anyway.

If he busts, you're stuck with $5-6 million per year in dead money.

I just see no reason for teams to sign these long-term deals at the top end of the draft. For mid-1st rounder salaries, etc., it makes sense locking up long-term, but the top guys is just stupid at current salaries.

The dolphins were right on this year... I don't see how to get away from the current $$ levels absent a new CBA... but limiting the length to 5 years was smart on their part.

15
by Purds (not verified) :: Wed, 05/21/2008 - 3:11pm

The one thing I will say in favor of this deal is this: look at today's date. It's only May 21, and Ryan is signed and in the system. Compare that to the Raiders' fiasco with Russel, to whom they eventually gave big money but so late in the year (early September) that he was pretty useless to them for the whole season.

I agree they overpaid, but at least they overpaid now, and he's in camp, and he's learning the system.

16
by TomHat (not verified) :: Wed, 05/21/2008 - 5:08pm

I guess they wanted to make sure that their draft spot wasnt the only thing they wasted on this guy.

17
by Theo, Netherlands (not verified) :: Wed, 05/21/2008 - 6:14pm

:: Purds — 5/21/2008 @ 2:11 pm
.
to screw up less than someone else doesn't make it good.
.
OT: I don't know how someone in their right mind thinks that rookies should get paid like this. Agents? Players? Teams? WHY??
.
If the league wants to start anywhere; it should be rookie contracts.

18
by Tom D (not verified) :: Wed, 05/21/2008 - 6:26pm

I'm thinking that maybe Ryan demanded 34 million guaranteed, so the Falcons made the deal as long as possible to lessen the cap hit. Also, if the cap continues to expand at the rate it's been going, in 3-4 years 12 million will be a deal for a franchise QB. Consider Drew Brees who signed a deal worth 10 million a year in 2006. The salary cap was 102 million this next year it's going to be 116 million, if it keeps growing at 7 million a year the salary cap is going to be 137 million. So deal worth the same percentage of the salary cap would be 13.4 million a year, on top of that Brees had serious injury concerns when he signed that deal. I think we could easily see franchise QBs making 18-19 million a year in 2010.

All of this assumes another CBA is signed and a salary cap calculated in a similar way is included.

19
by Purds (not verified) :: Wed, 05/21/2008 - 10:35pm

Theo: "to screw up less than someone else doesn’t make it good."

I hear you, but in that case, you're really attacking the pick itself, not the contract. I don't disagree that Ryan is not worth a #3 pick, or #3 (or #1) money. But, they already picked him.

At this point, having made the pick, I think it's wise to get him into camp. $5m more than Long guaranteed over 6 years is not a huge overpay (less than 1% of the salary cap per year), especially if the early signing allows Ryan to be useful this first year. Again, look at the number of rookies (and rookie QB's) who hold out and then serve no purpose on the field or in study because the first year's camp is lost, and by the time the season begins, you need to let the starter take the reps. Not only will Ryan not be a holdout, he can start now, at the first minicamp.

20
by BDC (not verified) :: Thu, 05/22/2008 - 12:21am

Purds,

I think that sort of thinking is exactly why we don't see rookie salaries come down for the top picks. They have all the leverage, and they know it (or rather, their agents do). They know the team is ultimately going to sign them to what they want (or close to it), because no team wants to be the one to "throw away" a top 5 pick. The only way these salaries won't continue to escalate is if teams make the players aware that if they are unreasonable, they will not be signed. But no team seems willing to do that (and lets be honest, they would be crucified in the media and by their fan base if they did).

Take Russell last year. He knows that ultimately he is getting signed no matter what happens, so he has no reason to negotiate. Sure, it might hurt his development to not make it in to camp, but what does he care? He knows that he is getting signed to a huge long term deal and knows that the team isn't going to give up on him right away, so he still has plenty of time to develop and show what he can do. The ironic part is that it is really the teams that hold all the leverage, but they refuse to use it.

21
by Purds (not verified) :: Thu, 05/22/2008 - 7:52am

BDC:

You're right. The problem, as I see it, is that the teams collectively hold the power, but the players individually hold the power. The rookie contract problem can't be solved by one team refusing to pay a top draft pick. Not only would the media and fan base go nuts, but the team itself would lose out on a great player (if they picked well at all). Only the collective bargaining process will fix this.

22
by Moe Sislak (not verified) :: Thu, 05/22/2008 - 9:43am

Before this year's draft, Colts' GM Bill Polian questioned if rewarding bad teams with high draft picks was actually much of a "reward" anymore. It certainly doesn't seem like it.

Setting aside the almost unique examples of Peyton Manning and John Elway, it's hard to see how a top five or top ten pick can possibly benefit a bad team beyond their tremendous cost. The price of signing top picks has passed the point that young players can't possibly outperform their contracts. Jake Long is now the league's highest paid OT and Matt Ryan's deal compares favourably with Tom Brady's!
To even come close to justifying the cost, a top pick can't merely be good, he has to be dominant...and dominant very early in his career. Even a "pretty good" starter now only represents money that could be better spent elsewhere.

I agree with BDC (#20), it does seem that the drafted players currently hold all the leverage and that it's going to take something drastic for the situation to change. One can only hope that NBA-style slotting of draft picks gets adopted by the NFL.

23
by RickD (not verified) :: Thu, 05/22/2008 - 2:55pm

Shouldn't the headline read "Ryan, rookie, gets more money than Tom Brady, NFL MVP"?

24
by Alex (not verified) :: Thu, 05/22/2008 - 11:32pm

Setting aside the almost unique examples of Peyton Manning and John Elway, it’s hard to see how a top five or top ten pick can possibly benefit a bad team beyond their tremendous cost.

You forgot Troy Aikman, Julius Peppers, Ladainian Tomlinson, Donovan McNabb, Orlando Pace, Jonathan Ogden...

Jake Long is now the league’s highest paid OT

No, he is not. Not in terms of salary cap hit, which is really all that matters to NFL teams. His cap hit won't be even close to the highest in the NFL next year, and by the time his cap hit gets really high, the salary cap will be much higher as well, and it's entirely possible that some other OT will be making significantly more than he is. In any case, he almost certainly won't have the highest cap hit among OTs until at least 3 or 4 years into his contract, by which time he might very well be the best OT in the NFL. I don't see the big problem here.

And in terms of percentage of the salary cap, the amount paid to top 3 picks has been decreasing over the last 10 years. Top picks are getting contracts that seem outrageous now, but that's because most of the contract's money is going to be paid when the salary cap is much higher.

Matt Ryan’s deal compares favourably with Tom Brady’s!

Yeah, I bet Tom Brady regrets renegotiating his contract to allow the Patriots to sign Randy Moss. He's probably sitting there, wishing he were getting $72 million over the next 6 years, throwing to Roddy White and Michael Jenkins, instead of making, say, $65-$70 million and throwing to Randy Moss and Wes Welker.

To even come close to justifying the cost, a top pick can’t merely be good, he has to be dominant…and dominant very early in his career.

Not at all. First off, it usually doesn't matter how good a top 5 pick is in his first year or two, because a team picking in the top 5 is probably not going to be very good in the next two years anyway. If he sucks for the first two years, but then "gets it" in year 3, he probably hasn't cost his team any trips to the Super Bowl. So, top picks definitely don't have to be dominant right away.

And top picks don't ever have to be that dominant to justify the cost. As long as they become very good players, their performance will be in line with their cap hits. In Matt Ryan's case, depending on the way the contract is structured, he might not ever be even the 5th highest paid QB in the NFL during his rookie contract. If, in his prime, he's about the 5th best QB in the NFL, his performance would more than justify his cap hit.

Now, maybe you don't think he'll ever be the 5th best QB in the NFL (I'm skeptical of that myself), but the Falcons do think that, or they wouldn't have drafted him 3rd overall. And I don't know if 5th best in the NFL would really count as dominant.

Even a “pretty good” starter now only represents money that could be better spent elsewhere.

Because good QBs are available in free agency all the time!

Oh, wait, no they aren't. The only good QBs to hit free agency in the last few years have been Drew Brees and Jeff Garcia. Brees was injured, Garcia was old (and they still got pretty lucrative contracts). The only way to acquire a good, young, healthy QB is to draft or trade for one. So if you want, say, the 5th best QB in the NFL, but you'd have to make him the 3rd highest paid QB in the league, it'd still be a good idea to make the deal if you don't already have a good QB. After all, you can't just get a top 5 QB off the free agent market, and having such a QB is extremely valuable.

25
by Pat (not verified) :: Fri, 05/23/2008 - 2:11pm

#3 - the problem is that with the salaries paid to the top 5 or so picks, you DON’T get them cheap even if they wind up superstars.

Only if they're running backs, who have the shortest lifespan of any position, and thus typically pretty depressed salaries given their status as skill position players. As a quarterback and left tackle, Ryan and Long are still cheap - in a few years, Ryan's cap hit will be in the $10M/year or so range, which will be relatively cheap.

In the last few years, it'll be probably $15M/year, which will be about par for the course for an average starting QB.

I really don't know why everyone makes such a big deal about these contract sizes. They're not that large, and the "guaranteed money" is usually just the equivalent of salary for the first three-four years, during which the player wouldn't get cut in any case.

26
by Tom D (not verified) :: Sun, 05/25/2008 - 3:18am

Re 25:

If they are running backs they help you immediately so that helps to offset the shorter lifespan.

27
by Alex (not verified) :: Sun, 05/25/2008 - 6:51am

If they are running backs they help you immediately so that helps to offset the shorter lifespan.

Not by much. I mean, the only difference is that RBs can contribute in their rookie years, while QBs don't usually contribute until year 2 or 3. But if you're drafting in the top 5, you probably aren't going to be any good until year 2 or 3 anyway, because terrible teams don't usually turn things around that fast.

So, a RB gives you 1 or 2 more years in the beginning of his career, when your team probably isn't even going to be good enough for it to matter much anyway. But QBs last much longer than RBs, which gives you a few additional years at the end of their career, when your team will be good enough for it to matter.

28
by VS (not verified) :: Sun, 05/25/2008 - 11:28pm

Shouldn't the top picks be spent on the most valuable players rather than the best players at this point?
Whichever player is willing to sign with the greatest amount of productivity relative to cost should go #1, not the best player. Logically, with the cap structure, the player willing to sign the worst contract should be the first pick in the draft. Obviously, figuring out the exact value of a player as well as the exact amount they will demand is pretty tough, but it seems pretty weird that this isn't even a consideration.

29
by Pat (not verified) :: Tue, 05/27/2008 - 2:06pm

#28:

That's a common mistake people make. Teams aren't looking for the best value. They're looking for the best player, period.

The argument that some people make is that "with a salary cap, marginal value (production-cost) is king," but that completely misses a very important point - roster size is a far, far greater limitation than a salary cap is. You can't glom together two $2M quarterbacks producing $5M of production and get a $10M production QB out of them.

30
by Alex (not verified) :: Tue, 05/27/2008 - 11:47pm

The argument that some people make is that “with a salary cap, marginal value (production-cost) is king,” but that completely misses a very important point - roster size is a far, far greater limitation than a salary cap is.

That, and the fact that even if you could have an unlimited roster, there's only so many elite QBs to go around. Saving a bunch of cap space by not taking a QB high in the draft doesn't help you much if you have to go trade away draft picks or players to get a QB from another team. The cost of a player is not just the money you have to pay them. You also have to factor in the cost of acquiring the player.

Massey and Thaler, for instance, seem to assume that having $9 million/year in cap space is enough to get a top 5 QB, because that's what the 5th best QB (or at least 5th highest paid QB) is paid. But just because a top 5 QB gets $9 million/year doesn't mean that $9 million/year is all it takes to get a top 5 QB. That would only be true if elite QBs were readily available on the free agent market. But elite QBs are almost never available in free agency, so you can't just get $9 million/year of QB production from $9 million/year of cap space.

That said, for some positions, surplus value is relatively more important. So, if you need a RB or a LB, and you have a choice between taking a first rounder that will get you $0.5 million/year in surplus value or taking a third rounder that will get you $1.5 million/year in surplus value, you might be better off taking the third rounder because you can usually use the cap space you save to get a good player at that position in free agency.

That might be one of the reasons that LBs and RBs aren't as frequently chosen in the first few picks in the draft.

31
by pastorfrank (not verified) :: Fri, 05/30/2008 - 5:08pm

If Jesus was alive today, He would certainly be the first pick and be paid well over any amount ever seen in a professional sport to this date. I'd say atleast 23mil a year. So that really makes this Ryan deal not seem so bad.