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31 Aug 2009

Under the Cap: 2004 QB Class Cashes In

by J.I. Halsell

One could make the argument that what the 1983 Quarterback draft class is to Hall of Famers, the 2004 Quarterback draft class is to hefty contract extensions. With Philip Rivers signing his contract earlier this week, it makes sense to compare the contracts of this highly compensated group of quarterbacks.

Class of 2004 Quarterback Contract Extensions
Player Roethlisberger Manning Rivers
Club PIT NYG SD
Sign Date 3/3/2008 8/14/2009 8/25/2009
New Years 6 6 6
Guarantee $33,200,000 $35,000,000 $38,150,000
Guarantee/year $5,533,333 $5,833,333 $6,358,333
Guaranteed vs. Total New Money 37.7% 35.9% 41.6%
Non-Guaranteed Money $54,786,502 $62,500,000 $53,650,000
Total New Money $87,986,502 $97,500,000 $91,800,000
Average Per Year $14,664,417 $16,250,000 $15,300,000
Three-Year Total $52,686,501 $50,850,000 $50,250,000
Guarantee vs. Three-Year Total 63.0% 68.8% 75.9%

In my opinion, guaranteed money is the most important metric by which to judge NFL contracts, which are generally non-guaranteed in nature. When one compares the three contracts with guaranteed money in mind, Philip Rivers’s deal comes out on top. In my Eli Manning analysis article from earlier this month, I wrote that Rivers’s contract could "approach $40 million guaranteed and $100 million in new money ... Sounds a lot like the Haynesworth contract." While Rivers did not get nearly $100 million in new money, he did get $38.15 million guaranteed -- $3 million more than Manning and nearly $5 million more than Roethlisberger. Another good metric is to look at how much guaranteed money a player is getting compared to the number of years they are obligating themselves to. In the case of Rivers, his guarantee per year of $6.36 million easily exceeds Manning and Roethlisberger (and Haynesworth's $5.86 million, for that matter).

The give and take of Rivers’s contract appears to be that in exchange for his high guaranteed money, he sacrificed the total value of his contract. Of the three contracts, Manning’s contract easily has the highest total new money value, $97.5 million. Manning, however, also has the lowest percentage of his contract guaranteed at 35.9 percent. Conversely, Rivers has a total new money value that is nearly $6 million less than Manning, but the 41.6 percent of his contract that is guaranteed is the highest in this group. One could surmise that Manning's inconsistent play, compared to his 2004 classmates, is mirrored by the high percentage of non-guaranteed money in his contract.

The three-year total metric is often the most utilized and practical barometer of total contract value since it is unlikely a player will make it to the latter years of any deal. That said, Roethlisberger is going to make the most new money over the first three years of the contract, $52.67 million, while Rivers is going to make the least of this group of quarterbacks at $50.25 million. However, Rivers’s 75.9 percent guaranteed of his three-year total tops the list and reinforces the point that Rivers sacrificed non-guaranteed money for more guaranteed money.

So what does this mean for the Tom Bradys and Peyton Mannings of the world? Given that quarterbacks can play well into their 30s, perhaps six-year extensions can be in their futures despite their ages (Brady, 32; Manning, 34). Moreover, if the quarterback class of 2004 is getting around $6 million per year in guaranteed money, then Brady and Manning could easily command $7 million per year in guaranteed money (particularly if Matthew Stafford got $6.95 million per year). Another possible structure is an average new money of nearly $20 million per year, but with roughly 25 percent of the total new money guaranteed, for roughly $30 million guaranteed on a six-year deal. This is the approach the Packers took with 31-year-old Brett Favre in 2001. It’s called the "pay as you go approach," which seems fitting for a player heading towards the perceived twilight of their career.

With the rare exception of the Albert Haynesworths of the world, it’s both clear and unsurprising that quarterback is the money position in the NFL. Many front offices believe that a legitimate franchise quarterback single-handedly gives your club a better chance of succeeding. This makes the Jay Cutler trade somewhat of an eyebrow raiser, but subscription to this philosophy is reflected in the value of the quarterback market. The 2004 quarterback draft class exemplifies this fact. Stay tuned to see if in 2014, the 2009 quarterback draft class of Stafford, Sanchez, and Freeman cash in like their 2004 predecessors.

Follow J.I. on Twitter @SalaryCap101

Posted by: J.I. Halsell on 31 Aug 2009

15 comments, Last at 01 Sep 2009, 4:53pm by tuluse

Comments

1
by Chris from CT (not verified) :: Mon, 08/31/2009 - 1:08pm

"Many front offices believe that a legitimate franchise quarterback single-handedly gives your club a better chance of succeeding. "

This is the reason that I give nay-sayers of Eli's contract. Yes, Eli is only the 10th-12th best QB in the league. But as an organization, you have to ask yourself whether its worth it to overpay to not have to ride the QB carousel. I'm sure the Giants, who have a very good defense and running game, are willing to overpay Manning for the time being while the rest of the team is very good and they have a chance over the next few years to win another Super Bowl.

Why let Eli walk in a year and have to sign Daunte Culpepper, Jeff Garcia and Sage Rosenfels to fight it out in camp? And thus waste the rest of the team?

2
by Eddo :: Mon, 08/31/2009 - 2:15pm

I agree with this line of thinking, Chris. Eli's not elite, and I personally don't think he's as good as Rivers or Roethlisberger. However, you absolutely need to factor in the benefits of QB stability, considering Eli is definitely good enough to be an above-average starter.

3
by Bowl Game Anomaly :: Mon, 08/31/2009 - 3:17pm

When looking at top QBs, I'm not sure if 3-year totals and guaranteed vs non-guaranteed money are as important as with non-QBs. Anecdotally at least, franchise QBs always play out their contracts or receive extensions basically until they retire, except in rare cases like Steve McNair. The money might not be guaranteed, but it will still get paid out except in the case of a catastrophic career-ending injury.

4
by tuluse :: Mon, 08/31/2009 - 4:29pm

They're still important. Just because a player might play through his whole contract doesn't mean he gets all the non-guaranteed money, it could be incentives, or it could be backloaded and he'll get a new deal before he sees that money, so it's not real.

And the 3 year totals are important because I could see them renegotiating shortly after 3 years.

14
by Pat (filler) (not verified) :: Tue, 09/01/2009 - 2:41pm

This is why I think for QBs, total base value is the most important barometer. QBs basically play out their deal, maybe up until the last year or so.

As for renegotiating after 3 years: when has this happened? Ever? I can't think of any cases for QBs. Rivers, for instance, will be over 30 when the contract ends, and about 30 when the 3 years are up. Renegotiating usually adds years to the length of a contract (McNabb's deal notwithstanding) and I can't imagine teams wanting to add years to a QB's contract at 30 without knowing how he'll age.

Just thinking back on the major QB contracts (assuming that obvious QBs will not be cut this year)
Steve McNair, 2000: played 5/6 years
Donovan McNabb, 2002: currently played 8/9 years (fake years not included)
Peyton Manning, 2004: currently played 6/7 years
Matt Hasselbeck, 2005: currently played 5/6 years

I don't see any evidence to support J.I. Halsell's statement that QBs are unlikely to see the latter halves of their contract. In fact, that looks like plenty of evidence against it. Though it should be noted that Manning, at least, restructured his contract after 2006, but I think that just shuffled money around.

That, of course, makes trying to compare contracts for QBs nigh-impossible when they're signed, since you have no idea whose contract will need to be restructured after a few years, like Manning or Brady, and whose won't, like McNabb's or Hasselbeck.

5
by Israel P. - Jer... :: Tue, 09/01/2009 - 6:34am

Does anyone think Sanchez, Stafford and Freeman will have any Super Bowl rings among them in 2014?

Does anyone think that Roethlisberger, Manning and Rivers will have more than their current three?

6
by edswood (not verified) :: Tue, 09/01/2009 - 7:08am

No, I do not see a SuperBowl ring for any of the 2009 class, but yes I do see another one (or two) in the trio Roethlisberger, Manning, and Rivers. All three of them are not only good quarterbacks, but also have some of the best talent surronding them. I would almost think that Rivers being arguably the best of the three would have one by 2014, but can he do it in spite of Norv Turner? I also believe that all of them deserved it, even Eli, considering that my Dolphins have wasted four straight number two draft picks without a franchise QB in site. I am sure we wasted more guaranteed money on those four combined guys, than these worthy QB's are getting. Then again, without the numbers in front of me, I could be wrong.

7
by Brandon (not verified) :: Tue, 09/01/2009 - 11:33am

I think when the Pennington era is over in Miami, you could very well be looking at a franchise quarterback in Chad Henne. And no, I'm not a U of M guy... I also believe that there could be multiple rings in the next few years for the class of '04. Eli has to find common ground with his young receiving corps, but that defense will continue to contend. As far as Roethlisberger goes, I still see the Steelers as the class of the AFC and as strong a candidate to repeat as we've seen in a while. Rivers is nipping at their heels, and should benefit from the crappy AFCW, and an improved defense this year with Merriman back to full speed. The '04 QB class is the best we've seen in years. It's no surprise then the kind of $ being thrown around. I don't know if '09 will ever measure up, especially with the likes of the Lions, Jets and Bucs.

11
by Noah of Arkadia :: Tue, 09/01/2009 - 1:18pm

And let's not forget Pat White. Calling 1st and 2nd year QBs picked in the 2nd round wasted picks is way too hasty.

12
by Independent George :: Tue, 09/01/2009 - 1:50pm

My big issue with Roethlisberger is that, unless he dramatically changes his style of play, I can see him missing 3-5 games/season going forward. Even ignoring the motorcycle incident, Roethlisberger takes more punishment than any QB since David Carr.

8
by Independent George :: Tue, 09/01/2009 - 11:37am

The QBs are just the cherry on top; the 2004 draft class as a whole is pretty damned impressive.

9
by Soulless Mercha... :: Tue, 09/01/2009 - 11:52am

And somewhere, J.P. Losman weeps.

(As do a lot of Buffalo fans.)

10
by steelberger (not verified) :: Tue, 09/01/2009 - 12:48pm

I believe that "somewhere" is currently Las Vegas.

13
by Rex (not verified) :: Tue, 09/01/2009 - 2:02pm

The value received by the teams who signed those three six-year deals won't be clear until they're over, but even as a Steelers homer, it's hard for me not to think the Steelers made a nice move by getting out in front of the other two teams and extending Roethlisberger first. They got to set the market rather than being forced to follow and top it, as the Giants and Bolts did. It's not like you'll get the other two guys to sign for less than or the same as the guy who signed first.

15
by tuluse :: Tue, 09/01/2009 - 4:53pm

True, but the Giants and Chargers made their deals when the total salary cap was bigger, it probably evens out.