Writers of Pro Football Prospectus 2008

Most Recent FO Features

StaffordMat09.jpg

» Clutch Encounters: Week 7

Saints bomb again in the final minutes. Also: Kyle Orton's rare GWD, Andy Reid's game management, the return of Colt McCoy, Jets' regression and you can't blow out Russell Wilson.

05 May 2009

Under the Cap: Matt Stafford

by J.I. Halsell

Ever since Football Outsiders launched almost six years ago, we've been on the hunt for somebody who could analyze NFL contracts. When it comes to building a year-in, year-out Super Bowl contender, working out the best contract language can be almost as important as picking the right talent.

So we're happy today to introduce our newest staff writer, J.I. Halsell, and his biweekly column "Under the Cap." Halsell spent the past two seasons as Salary Cap Analyst for the Washington Redskins, where he was involved in every player contract negotiation to occur during that time. Before that, he worked for two years at the NFL Management Council, the league office’s department responsible for administering the salary cap and the approval of all player contracts.

You can check out what J.I. previously had to say about 2009 free agency at his blog, Inside the Cap. If you have a question for J.I. or a topic you would like him to tackle in a future column, leave a note in the comments or e-mail him at ji-at-footballoutsiders.com.

Before we compare Stafford’s contract to the preceding No. 1 draft pick contracts of Jake Long and JaMarcus Russell, lets take a look at how his six-year contract is structured. Per league and agent sources the contract breaks down as follows:

Guaranteed money:

  • Year 1 P5 (salary): $3.1 million
  • Year 2 P5: $395,000
  • Year 2 1-Time NLTBE (Not-Likely-To-Earned) Bonus: $9.105 million
  • Option Bonus: $17.4 million
  • Year 3 P5 Guarantee: $9 million
  • Year 4 P5 Guarantee: $2.7 million of $10.5 million
  • Totaling: $41.7 million

Non-guaranteed money:

  • Year 4 Non-Guaranteed P5: $7.8 million
  • Year 5 P5: $11.5 million
  • Year 6 P5: $11 million
  • Totaling: $30.3 million

Base total contract value:

  • Guaranteed Money: $41.7 million
  • Non-Guaranteed Money: $30.3 million
  • Totaling: $72 million

Max total contract value:

  • Base Contract Value: $72 million
  • High-End Performance Escalators: max $6 million
  • Totaling: $78 million

Year-by-year totals (accrued totals year-by-year):

  • Year 1: $41.7 million
  • Year 2: $41.7 million
  • Year 3: $41.7 million
  • Year 4: $49.5 million
  • Year 5: $61 million
  • Year 6: $72 million

So in short, Stafford is guaranteed to make at least $41.7 million over the first 3 years of his contract. If he were to be cut after Year 4 he would have made at least $49.5 million. Over six years, he’s going to make at least $72 million, but could earn a maximum of $78 million over that same term.

In any negotiation, the best deals are those in which both sides feel like they walked away with a deal they can feel good about; the Stafford deal is definitely one that falls into this category.

From the perspective of Tom Condon and CAA, if your primary interest is maximizing your client’s guaranteed money, then, simply, the fact that you got your client the most lucrative rookie contract in history bodes well for your future recruiting of the next Stafford (hello, Sam Bradford). Moreover, the fact that you got your client $12 million per year, while Jake Long from a year ago got $10 million a year and Matt Ryan got $11 million a year, also bodes well for your argument.

From the perspective of the Lions, you knew going into it that you were going to pay a king’s ransom for Stafford. However, you can feel good about getting a deal done ahead of the draft (unlike JaMarcus Russell) and maybe more importantly you can feel good about limiting the “percentage increase” of the guarantee to only 1.5 percent from Long’s 14.3 percent, and in exchange for this you’re willing to give up a higher per-year base contract value ($12 million/year for Stafford vs. $10 million/year for both Long and Russell). Just as agents are interested in maximizing guaranteed money, clubs are interested in limiting it in anyway possible; relatively speaking, Detroit did a good job in this regard.


Rookie Contracts of Recent No. 1 Draft Picks
Player Years Guaranteed $ Guarantee/Year % Increase
Russell, JaMarcus 6 $31,500,000 $5,250,000 --
Long, Jake 5 $30,000,000 $6,000,000 14.3%
Stafford, Matthew 6 $41,700,000 $6,950,000 15.8%

You see that Stafford’s increase was 1.5 percent more than Long’s; however, last year’s premier rookie quarterback, Matt Ryan, got an even higher increase than his predecessor at No. 3. Ryan’s increase was 3.3 percent.


Rookie Contracts of Recent No. 3 Draft Picks
Player Years Guaranteed $ Guarantee/Year % Increase
Young, Vince 5 $18,765,000 $3,753,000 --
Thomas, Joe 5 $23,000,000 $4,600,000 22.6%
Ryan, Matt 6 $34,750,000 $5,791,666 25.9%

(As an aside, looking at the last three No. 3 overall picks, Tyson Jackson should be going to the Pro Bowl as a rookie.)

So now begs the question, what does this all mean for Mark Sanchez at No. 5? The history of the No. 5 slot is as follows:


Rookie Contracts of Recent No. 5 Draft Picks
Player Years Guaranteed $ Guarantee/Year % Increase
Hawk, A.J. 6 $16,112,500 $2,685,417 --
Brown, Levi 6 $18,050,000 $3,008,333 12.0%
Dorsey, Glenn 5 $17,961,500 $3,592,300 19.4%

Based on the last few players chosen in his slot, my best guess is that Sanchez gets a six-year contract with at least $25 million guaranteed ($4.17 million/year of guaranteed money).

Posted by: J.I. Halsell on 05 May 2009

90 comments, Last at 07 May 2009, 11:20pm by Jason423

Comments

1
by Temo :: Tue, 05/05/2009 - 11:21am

This is the best new feature FO has ever instituted. Thanks.

16
by drobviousso :: Tue, 05/05/2009 - 1:30pm

Ditto.

36
by Insancipitory :: Tue, 05/05/2009 - 4:03pm

This has got to make me better at NFL Headcoach 09.

2
by JD (not verified) :: Tue, 05/05/2009 - 11:29am

Great analysis - this is what I've been looking for all over.

One question. Why is Stafford's Year 2 NLTBE bonus included in guaranteed money? Is it really something that he'll almost surely hit (e.g. starting one game) and just classified as NLTBE so that the Lions can push the cap hit back a year?

4
by Bowl Game Anomaly :: Tue, 05/05/2009 - 11:40am

I was wondering that as well.

(Formerly "The McNabb Bowl Game Anomaly")

6
by Temo :: Tue, 05/05/2009 - 11:41am

If you read the author's blog, he has a section on Matt Ryan's contract that illuminates some of the jargon he uses here:

http://insidethecap.blogspot.com/2009/04/anatomy-of-1st-round-contract.h...

8
by JasonK :: Tue, 05/05/2009 - 11:59am

Nice find. The explanation from the link:

"In 1st & 2nd round draft pick contracts, there is almost always money tied to NLTBE (Not-Like-To-Be-Earned) Incentives. These incentives are "backed up" or guaranteed by P5 guarantees. These P5 guarantees typically void upon the earning of the NLTBE incentive (ie, a total of $1M in P5 guarantees voiding when a $1M NLTBE incentive is earned). Unlike Signing Bonus, these NLTBE bonuses don't hit a team's cap until they're earned."

So, as I read that, the NLTBE bonus counts as a guarantee, because in the event that it is not earned, an equivalent portion of base salary becomes guaranteed.

43
by Dean :: Tue, 05/05/2009 - 4:49pm

I looked at this, and I still don't know what P5 means. Yet somehow, I can't help but think I'm missing something obvious.

45
by DrewTS (not verified) :: Tue, 05/05/2009 - 5:00pm

"Year 1 P5 (salary)"

68
by apk3000 :: Wed, 05/06/2009 - 8:45am

I'm guessing it means "Paragraph 5 Salary" which is probably how the CBA refers to the base salary. The NHL's CBA has similar terminology, player salary is always described as the Paragraph 1 Salary, because that's where the standard contract template has it listed.

3
by Unverifiable (not verified) :: Tue, 05/05/2009 - 11:37am

Why does it make sense to divide the guaranteed money by the total number of years of the contract (including non-guaranteed years) as opposed to guaranteed money divided by years of the guarantee?

53
by J.I. Halsell :: Tue, 05/05/2009 - 7:57pm

Just as anything else, there's 30 million ways to skin a cat. However, as we all know, in the NFL their contracts aren't guaranteed and neither are the years that a player will play under a contract. Therefore, to interpret that Stafford's guarantee equals 3 years of guaranteed existence of this contract would be incorrect (sorry, if i created that impression). More accurately, it would be better to compare a player's guarantee based upon their contract being terminated the next day (basically the cost of simply acquiring the player; sometimes called 1st Year Money); however, dividing guaranteed money by the term of the contract is a commonly used barometer.

J.I. Halsell
UNDER THE CAP

71
by bengt (not verified) :: Wed, 05/06/2009 - 9:33am

however, dividing guaranteed money by the term of the contract is a commonly used barometer.
There's nothing else to use, is there? For the team, it's the period of time for which the player is exclusively bound to them. For the player, it's the time until he can assuredly expect to renegotiate. At this stage you have to disregard things like releasing the player or holding out for a new contract.

5
by Joseph :: Tue, 05/05/2009 - 11:40am

Welcome, Mr. Halsell. I look forward to more articles like this in the future. In addition, I hope that for next year's FA period (and any other signings this year), that you can write brief articles detailing the contracts of "big-name/big-$" signings.

60
by J.I. Halsell :: Tue, 05/05/2009 - 8:25pm

Thanks!! I'll definitely continue to break down the prominent deals either here on FO or on my Inside The Cap blog.

J.I. Halsell
UNDER THE CAP

7
by krugerindustria... :: Tue, 05/05/2009 - 11:43am

This column is another great insight into how teams are run.
Having said that, I got stuck on the first paragraph though and perhaps a glossary addition would help, but how does NLTBE bonus make it’s way into guaranteed money? I would have thought the exact opposite.

9
by mawbrew :: Tue, 05/05/2009 - 12:23pm

Anybody know why the big bonus money (NLTBE and Option) gets paid in year 2 (and the first part of year 3)? Is it to circumvent the rookie cap or related to 2009 as the 'last capped year' (or something else)?

12
by Jimmy :: Tue, 05/05/2009 - 12:43pm

It is due to the rookie cap (at least the option bonus is I am not sure what the NLTBEI is for, see my query below). Just about every first round rookie deal I have looked at over the last three or four years has them in. First rounders typically get $1.5-2m in salary and workout bonus in the first year (double that for top ten picks) and the majority of their bonus money in year two. Teams started to do this to get around the rookie cap and it was all fine and dandy back when all first rounders could be asked to sign six year deals so the bonus money all got pro-rated over the last five years of the contract. However since several rulings have gone against NFL teams trying to reclaim roster and option bonus moneys paid to players who subsequently became involved in criminal activity I imagine teams wish they didn't have to do this as a simple signing bonus paid in the first year could be forfeit under the rulings.

Then again the league seems to be interested in taking a hard look at the way rookies are paid anyway.

10
by The Ninjalectual :: Tue, 05/05/2009 - 12:29pm

J.I.--

Did you quit working for the Redskins when they asked you to fit Haynesworth under the cap?

"Just look at that pumpkin."
-John Madden, looking at the moon.

14
by Harris :: Tue, 05/05/2009 - 1:02pm

"Washington Redskins contract analyst" is a job on par with NAMBLA PR director or Sylvester Sallone's speech coach.

Hail Hydra!

15
by Temo :: Tue, 05/05/2009 - 1:18pm

You just made me google "NAMBLA", and... well, I learned something new today.

26
by Led (not verified) :: Tue, 05/05/2009 - 2:25pm

Yikes. I hope that wasn't on your work computer.

38
by Temo :: Tue, 05/05/2009 - 4:09pm

Work computer, but wikipedia entries are pretty sterile in that way.

35
by Tom Gower :: Tue, 05/05/2009 - 3:46pm

I learned something new today
Yup. Until the South Park episode, I never knew there were that many people that looked like Marlon Brando.

39
by Harris :: Tue, 05/05/2009 - 4:12pm

Once in college, a friend thought it would be funny to post an ad with my phone number saying that I would trade a Super Bowl ticket for a ride to the game. As payback, I took out a classified ad with his phone number saying he was looking for people interested in starting an on-campus chapter of NAMBLA. Never bring a knife to a gunfight.

Hail Hydra!

40
by Kevin from Philly :: Tue, 05/05/2009 - 4:34pm

Yikes!

I have a friend that used to work in the DA's office here. One time a cop that worked with them pissed off one of his co-workers and as revenge, he bought a subscription to PGN (Philadelphia Gay News) under the cops name with the delivery address as his desk at Police headquarters. I thought that was the nastiest prank ever, until I read your post.

50
by James-London :: Tue, 05/05/2009 - 7:19pm

NAMBLA?!?!

Shit Harris,....do they make Jam?

Phil Simms is a Cretin.

51
by Jimmy :: Tue, 05/05/2009 - 7:37pm

I really, really, really hope not. Really.

62
by Harris :: Tue, 05/05/2009 - 9:43pm

Me too. I was in Big Brothers/Big Sisters a few years ago. In the interview they asked mw, point blank, "Are you a member of NAMBLA or any similar organization?" I asked if they really had a problem with NAMBLA infiltration. The interviewer told me NAMBLA had an organized program wherein they sent people to the interview, who then disseminated the questions through the organizaiton so other perverts would have a better chance of getting through. That should ruin your lunch and your sleep for a few days. It did for me.

Hail Hydra!

66
by Theo :: Wed, 05/06/2009 - 7:00am

You have sick, very sick and then there is NAMBLA.

11
by Jimmy :: Tue, 05/05/2009 - 12:30pm

If Stafford doesn't reach his NLTBEI of in year two then $9.105m of salary becomes guaranteed? There isn't $9.105m of salary in year two. So does this mean that future salaries are getting guaranteed?

Or is the Not-likely-to-be-earned-incentive (NLTBEI) really a likely-to-be-earned-incentive (LTBEI)?

While I am typing this I feel I should indicate a strong preference for folk using the 'I' (for incentive) or 'B' (for bonus) when using the abbreviations. NLTBE is always followed by the I or the B so why not add it and save having to type the extra word.

13
by Temo :: Tue, 05/05/2009 - 1:01pm

Because of people like me who hate long acronyms and would keep reading NLTBEI and NLTBEB as the same thing, which can be very annoying. LTBE is different because the first letter is different, so it's far easier to distinguish.

18
by Jimmy :: Tue, 05/05/2009 - 1:42pm

NLTBEI and NLTBEB are the same thing. Bonus and Incentive are the same thing as far as this is concerned.

It is the 'N' that changes things.

19
by Temo :: Tue, 05/05/2009 - 1:50pm

oops, sorry I misread what you'd said.

54
by J.I. Halsell :: Tue, 05/05/2009 - 8:01pm

The opportunity to earn the $9.105 1-time NLTBE incentive rolls over to subsequent years in the event that he does not earn it in Year 2. Keep in mind that once earned, this incentive cannot be earned again; hence the "1-time" portion of the name. Great question.

J.I. Halsell
UNDER THE CAP

69
by Jimmy :: Wed, 05/06/2009 - 8:57am

So it is a one time only fall off a log bonus which can be rolled back in case falling off a log is too tough for Mr Stafford early doors. Is there any particular reason why this kind of bonus gets worked onto high draft pick contracts?

80
by J.I. Halsell :: Wed, 05/06/2009 - 7:39pm

Because of rookie pool limitations, teams must put guaranteed money in years beyond Year 1, so the option device is one method to do this. Additionally, the 1-time NLTBE incentive, similar to an option or signing bonus, provides a lump sum of cash when earned. This device is also used in 2nd round contracts, where these players typically receive a signing bonus and have a 1-time that is backed up by future year P5 (salary) guarantees (these P5 guarantees void upon the earning of the 1-time).

J.I. Halsell
UNDER THE CAP

82
by Jimmy :: Wed, 05/06/2009 - 9:16pm

I was wondering why the fall off the log bonus as opposed to a conventional option or roster bonus? If the 'log' bonus is guaranteed anyway why not simply use an option or roster bonus? I guess what I am getting at is why make something more complicated than it needs to be? If I had to guess I would imagine that both sides can then sell the contract different ways but both sides ultimately get what they want. The team management can claim the bonus is lower when negotiating with their own players whereas the agent can tell his player about all the bonus money he is going to get as long as he can fall off the log.

Great article and looking forward to more (outsider) insider insights in the future, cheers for the responses.

84
by tuluse :: Thu, 05/07/2009 - 3:14am

I think it's because NLTBE incentives push the cap hit back one year. I believe rookie deals are limited on how much the cap hit can increase each year.

86
by Jimmy :: Thu, 05/07/2009 - 9:40am

I had forgotten about that rule. Doesn't it apply to all contracts not just rookie ones? I think you are on to something.

17
by claremont :: Tue, 05/05/2009 - 1:34pm

Hey J.I.,

I came across your inside the cap blog a few months ago and immediately it became one of football sites I was most excited to see updated... I wasn't surprised at all when you said you were going to be running columns here, I thought it was a great addition. I tried to comment on your old blog to say how much I liked it but wasn't registered.... I'm pretty sure lots of other people read it and loved it but did the same thing

55
by J.I. Halsell :: Tue, 05/05/2009 - 8:02pm

Thanks!! I appreciate you checking out the other blog; definitely keep reading Inside The Cap, as I'll continue to post items there in between my items here on FO. Thanks again!!

J.I. Halsell
UNDER THE CAP

20
by Scott de B. :: Tue, 05/05/2009 - 2:02pm

I'm looking forward to this series. Now, I'm starting from about ground zero here, but I would like to ask about this sentence:

You see that Stafford’s increase was 1.5 percent more than Long’s

This seems a bit misleading. The rate of increase was 1.5 percent more in absolute terms. But does that mean this is a good deal? We're talking about salaries increasing 15+% a year. What has been the annual percentage increase in NFL salaries on average? What has been the annual rate of increase in NFL revenues? Is 15% rookie salary growth per year sustainable?

21
by Eli (not verified) :: Tue, 05/05/2009 - 2:04pm

I didn't understand this point either. I also don't understand in what way this was a good deal for the Lions.

27
by Temo :: Tue, 05/05/2009 - 2:30pm

Mario Williams: 26.5 guaranteed over 6 (4.42 million per year guaranteed).

That's a 19% increase from Mario Williams to JaMarcus Russel. As for whether or not it's sustainable, over the past 3 years (post new CBA), the total NFL salary cap has risen 6.9%, 7.1%, and 8.8%.

(The salary cap had a weird year in 2006, when Williams was selected, due to the new CBA which increased the salary cap from 85.5 million to 102 million-- a 19% increase).

So it appears like it's definitely not sustainable.

56
by J.I. Halsell :: Tue, 05/05/2009 - 8:09pm

I definitely don't agree that continued 15% increases from one year to another is a good system; particularly when the rookie pool isn't increasing at that rate. However, until the new CBA addresses this, it's the system we're stuck with, and so under the circumstances and previous years precedents, it's a fair deal from a guarantee increase perspective. Again, hopefully, the new CBA, if & when hammered out, addresses this issue and throws those precedents out the window, particularly at the top of the 1st round. As you get into the later rounds the percent increase gets down to like 2% - 6%; a far cry from 15% - 25% at the top of the 1st round.

J.I. Halsell
UNDER THE CAP

22
by Illmatic74 :: Tue, 05/05/2009 - 2:08pm

Great job guys you found one of the 5 guys who understand NFL contracts that aren't employed by NFL teams.

23
by geraldmburris (not verified) :: Tue, 05/05/2009 - 2:12pm

Outstanding.

24
by Ralphie (not verified) :: Tue, 05/05/2009 - 2:17pm

How does a not-likely-to-be-earned bonus qualify as guaranteed money?

25
by Temo :: Tue, 05/05/2009 - 2:22pm

Because:

1) NLTBE is sometimes actually pretty likely (Matt Ryan is well on his way to earning his NLTBE bonus-- 35% of team snaps and improvement in overall team offensive statistics). However, qualifying it as NLTBE delays the cap hit.

2) If the NLTBE bonus isn't earned, it's usually backed up by salary guarentees that replace the unearned bonus (however the cap hit is still postponed, which is the intent of the qualification).

This is the best of my current understanding.

28
by Karl Cuba :: Tue, 05/05/2009 - 2:41pm

Love this new addition. Mr Halsell welcome to the closest thing to peer review that exists for NFL writing.

I used to like PFT when Florio used to really get into these numbers but he hasn't been as thorough recently, can't wait for Pat to turn up and start a (beautifully constructed) 3000 word argument about cap values.

Is there any chance JI could look into the ramifications of the Eagles habit of signing up thier guys who then get unhappy: Sheppard Andrews, Brown etc.

57
by J.I. Halsell :: Tue, 05/05/2009 - 8:12pm

Definitely check either this space or my Inside The Cap blog for me addressing this habit of the Eagles. It's a good cap management tactic, but it doesn't help your team if your cap is managed great, but the players who are suppose to be helping you get W's are disgruntled about their contracts. There's gotta be a balance in my opinion.

J.I. Halsell
UNDER THE CAP

29
by Scarhead :: Tue, 05/05/2009 - 3:00pm

I must have totally missed the point where this is a good deal for the Lions.

Jake Long got a 14.3% increase from the previous year. That's a bad deal when the salary cap increased less than 10%. That's a bad deal if the salary cap increased 20% because it's way too much money for a frickin rookie!

And Stafford got a 15.8% increase from that, which was way too much money. There is no way you can convince me this is in any way a good deal for the Lions. Isn't this more money than Haynesworth got ($41M guaranteed the first three years). If I remember correctly, Haynesworth has actually played a few NFL snaps at a respectable level. Stafford has accomplished as much in the NFL as I have.

I don't see a win-win situation here.

33
by Temo :: Tue, 05/05/2009 - 3:36pm

A few points here:

1) Like I said below, Stafford got a big bump in guaranteed money, but sacrificed his total compensation, which increased only 3.9% over what Long received. Stafford is a QB while Long is "only" a LT.

2) Haynesworth got 41 over 3, while Stafford got 48.7 over 4. So Haynesworth got similar money despite playing a much less important position and being probably just past his prime year (or maybe about to have his prime year).

3) You could say, theoretically, that draft picks are paid (roughly) according to the range of their possible values. In other words, a #1 pick is paid a number that is an amalgam of his possible career paths, based (lets say) on the history of #1 pick QBs in the past. Here's a list, then, of his possible career paths (recent-ish players only):

JaMarcus Russell
Alex Smith
Eli Manning
Carson Palmer
David Carr
Michael Vick
Tim Couch
Peyton Manning
Drew Bledsoe
Jeff George
Troy Aikman
Vinny Testaverde
John Elway

So the question then is, would you be willing to guarantee approx. 41 million over 4 years to have about a 50% chance at landing a franchise QB?

Edit: You also have to take into account Net-present-value into the equation when you are comparing rookies to free agents, since the guarantees afforded to draft picks are not in the form of signing bonuses.

42
by Scarhead :: Tue, 05/05/2009 - 4:42pm

1) My contention is that Long made way too much. Therefore, Stafford made way too much unless he took substantially less than Long. Since it was 3.9% more in total compensation (rather than the 15.8%), that's still too much.

2) Haynesworth position is less important. However, he has already proven himself to be in the running for best defensive player in the game. Stafford has proven nothing. Not. A. Damn. Thing. They should not have comparative contracts.

3) I don't agree that draft picks are paid according to the range of their possible values. Draft picks seem to me to be paid according to how much whoever was chosen at their pick the year before, after the agents broker a ridiculous raise. I'm aware there is a small amount of "quarterback compensation" or whatever you want to call it, but I think it is a somewhat negligible amount in the overall value of the contract.

I also don't see a 50% chance of franchise QB in that list. Peyton and Elway are clearly at the top. Then you have Palmer, Bledsoe, Aikman and Eli. Then you have seven other guys. I don't know that Bledsoe, Aikman, and Eli are worth $41M over 3 years, or $48M over 4, let alone the other scrubs.

That's not even counting the fact that just because the rate was (almost) 50% for franchise QB's does not mean that Stafford has a 50% chance to be a franchise QB. I have no idea what percentage chance he has, but I'm pretty sure it's not related to how well Aikman or Carr did. It is entirely dependant on Stafford himself and the Lions organization. Judging from the past success of Lions QB's and their organization, I have to put the number at somewhat less than 50.

70
by The Blow Leprechaun (not verified) :: Wed, 05/06/2009 - 9:22am

Skimming the internet (literally skimming, so this number could be off), inflation increased 4.2% last year, which means a 3.9% increase on salary functionally is a decrease.

72
by Bad Doctor :: Wed, 05/06/2009 - 1:59pm

I agree with you entirely, but I think J.I. is qualifying the piece appropriately -- "From the perspective of the Lions, you knew going into it that you were going to pay a king’s ransom for Stafford." So given that they had their heart set on Stafford, they negotiated well.

To me, and I'm assuming others here, given that they have a unique ability to negotiate with multiple players prior to the draft (and you can see above the expected drop in guaranteed money to the 3rd or 5th spot) OR pass and drop down to a lower draft slot of their choosing (although I do still hold out a conspiracy theory that the NFL has made it clear that any team that drops this sort of turd in the league's punchbowl on its second biggest day of the year will be dealt with accordingly), and given that Stafford does not seem to be a can't miss prospect by any means, the Lions should have taken a different approach.

30
by Temo :: Tue, 05/05/2009 - 3:01pm

Here's some more numbers which illustrate why the author is correct that the Lions made a decent deal:

Increase in total $$ per year (guarantee and non-guarantee):
Williams- 9.0 million per year
Russel- 10.17/year, 13.0%
Long- 11.55/year (voided 6th year), 13.6%
Stafford- 12.00/year, 3.9%

Increase in TOTAL Guaranteed money per year:
Williams- 26.5 million
Russel- 31.5 million, 19%
Long- 30 million, -5%
Stafford- 41.7 million, 39%

Increase in Guaranteed money per year:
Williams- 4.2 million
Russel- 5.25 million, 19%
Long- 6 million, 14%
Stafford- 6.95 million, 16%

So basically, the Lions gave a very modest increase in total money in the contract in exchange for a huge jump in total guaranteed money. Stafford got only 3.9% more total money per year than Long, and the salary cap increased 8.8% this year.

You can see where the Dolphins took the opposite approach with Long: they gave him less guaranteed money but made it a 5 year deal (actually 6 but the the 6th year was easily voidable) that paid more on a total-money-per-year basis.

34
by Rich Conley (not verified) :: Tue, 05/05/2009 - 3:37pm

I can't see how saving $1M a year for 6 years offsets $12M guaranteed upfront. That seems like lots of additional risk for a very small savings. Thats a poor investment

37
by Temo :: Tue, 05/05/2009 - 4:05pm

You have to make certain concessions to get stuff back. That 12 million/year extra in bonus money is over 4 years and isn't really an increase in money GIVEN, but money guaranteed.

Yes, it's a higher risk in terms of potential money lost of Stafford sucks, but it's also a risk for Stafford in turning down the greater total money in case he DOESN'T suck.

73
by Bad Doctor :: Wed, 05/06/2009 - 2:11pm

I'd disagree on two counts, Temo. First, if a team is taking a QB at the top of the draft, I would think it would prefer lower guaranteed money at the cost of a higher overall value. If the QB is a stud, you'll pay him all that unguaranteed money gladly. If he stinks, your initial investment was lower, and you can cut bait quicker. Conversely, if you're looking at a guy like Jake Long, you're almost certain that, even if he flames out as a left tackle, he'll still be a productive player at right tackle or guard. In that case, hell (time value of money provisos excepted), I'll pay him his whole damn 5 years of salary guaranteed on day one, because I know I'll be hanging on to him and getting productivity (in one way or another) for that entire time.

Second, I don't know how Stafford is taking on any risk. If he's a stud, the Lions gladly pay him $11.25 per in years 5 and 6, plus I would assume the escalators on top of that ... over $14 million per. That money should put him right about where you would expect to be paid as a franchise quarterback. Maybe by agreeing to 6 years instead of 5 he pushes back potential free agency, but when was the last time a franchise quarterback has made it to free agency? Realistically, it just pushes his eventual extension back a year, and from what we see about NFL salary inflation in the numbers above, that might not be a bad thing.

76
by White Rose Duelist :: Wed, 05/06/2009 - 4:02pm

Conversely, if you're looking at a guy like Jake Long, you're almost certain that, even if he flames out as a left tackle, he'll still be a productive player at right tackle or guard.

Robert gallery begs to differ.

79
by Eddo :: Wed, 05/06/2009 - 7:37pm

Gallery's an OK guard, so at least the Raiders got something out of that pick.

31
by Skins Fan (not verified) :: Tue, 05/05/2009 - 3:18pm

Can we get a breakdown of where the skins are at? what does our cap look like next season?? When can we cut jansen?

44
by Jimmy :: Tue, 05/05/2009 - 4:53pm

You can get cap info from a great site found at

www.ianwhetstone.com/football/cap

Apparently it is run by a charitable fellow who does all this stuff in his spare time and is then good enough to put it up on the net. I don't know where he gets his information from (though I wish I did) but it tends to mesh very closely with the USA Today page and just about every salary projection that goes up on a reputable site (ie SI, ESPN etc).

As for the Skins cap it really does depend on whether there is an uncapped year. The page on the website has them as pro-rating Haynesworth and Hall's bonus money due to be paid in '10 (all $36m of it), whereas if there were no cap I imagine Snyder would want to leave it all in '10. I would say the Skins do appear to be in better cap shape in future years than I can ever remember them being. They will probably have approximately $20m of cap room, the flip side of that is they only have 32 players under contract after this season plus any rookies as thier deals haven't been signed (or negotiated) so the number of players under contract will go up and the cap room will go down.

58
by J.I. Halsell :: Tue, 05/05/2009 - 8:16pm

Kinda like how some people deal with their wife, "it's cheaper to keep her." This applies to Jansen, if the Skins were to cut Jansen this year, he'd count more against their cap than if they were to keep him.

J.I. Halsell
UNDER THE CAP

32
by Rich Conley (not verified) :: Tue, 05/05/2009 - 3:32pm

"When it comes to building a year-in, year-out Super Bowl contender, working out the best contract language can be almost as important as picking the right talent."

When has washington been a superbowl contender in the salary cap era?

Great article

47
by John Doe (not verified) :: Tue, 05/05/2009 - 6:14pm

The contract guys don't pick the players to sign. Every year you hear about how the Redskins are in cap hell from signing so many high priced big name players. Then every year the Redskins sign a bunch more. The contract guys must be really good at what they do.

48
by Temo :: Tue, 05/05/2009 - 7:11pm

Right, which kinda supports the point that really, contract guys aren't as important as personnel guys.

59
by J.I. Halsell :: Tue, 05/05/2009 - 8:22pm

OK, so i'm a little biased in this regard, but you have to have talented people in both the scouting department and the football administration (cap & contracts dept.) department, and more importantly, they need to work hand in hand and be on the same page with the how they want to build the team. if you negotiate great contracts and do an outstanding job manageing your cap, but your talent evaluators suck, then what good is it if your players suck and keep losing. Conversely, if you're in cap hell but have a nack for acquiring good players, then your ability to continue to acquire good players is going to be handicapped by the cap. So you gotta be talented in both regards and definitely have to work together. Football is the ultimate team sport both on & off the field.

J.I. Halsell
UNDER THE CAP

61
by Temo :: Tue, 05/05/2009 - 8:25pm

So what you're really saying is, your talent evaluators with the Redskins sucked. :p

Just kidding! (not really)

41
by Kevin from Philly :: Tue, 05/05/2009 - 4:38pm

Enjoyed the article. Could he now explain how he managed to fit all of Dan Snyders whims into the team without putting them in Cap hell?

46
by snik75 (not verified) :: Tue, 05/05/2009 - 5:06pm

If the team's goal (minimize guaranteed money) and the player's goal (maximize it) are exactly opposed, it is hard to argue that both "got a good deal" i.e. more than they would have in an exactly even transaction. That said, I will accept that there are ways of making this look like a good deal for either side. But I would bet a chunk of money that in five years, it will appear that Stafford got by FAR the better of this deal.

49
by Still Alive (not verified) :: Tue, 05/05/2009 - 7:15pm

I have been reading FO for 4 years at least and this is the one thing it definitely sorely lacked. An appreciation of the business aspects is:
A: key to understanding what is going on and predicting future moves and
B: something FO's demographic is disproportionately interested in and cannot get elsewhere easily.

52
by Tundrapaddy (not verified) :: Tue, 05/05/2009 - 7:52pm

Interesting article - welcome to the site, Mr. Halsell.I'm sure you'll find it more enjoyable than fixing Dan Snyder's messes.

On a completely unrelated note - the picture on the FO homepage clinched it for me. Matt Stafford does indeed look like a human cabbage patch doll.

63
by Wait, what? (not verified) :: Tue, 05/05/2009 - 9:57pm

Holy shit, this is fucking awesome. Looking forward to your take on the Eagles' approach to the salary cap (as discussed earlier in the comments). Blog has been bookmarked as well; I like the way you discuss the motivation and potential reasoning behind certain aspects of a given contract, where a lot of analysis would just break down the numbers and leave it at that.

64
by David B. (not verified) :: Wed, 05/06/2009 - 3:22am

Great addition to the team. I just went over to your blog to check it out. (You are in serious need of web development skills - don't they teach that in college? Of course not, they're too busy thumbing you throw classes on Plato. And then they wonder why the workforce lacks the skills needed for full employment. F'in bureaucrats.)

Anyway, back to the topic at hand. I was reading through your column on Jay Cutler, and well, kudos! That is fantastic analysis. In fact, it's so good that not a single columnist I read in any tripe newspaper like ESPN or SI or FAUX even approached the issue. You have real talent. Don't ever waste it on journalism. Please.

"a cheerful, affable young man who is disabled for ordinary business pursuits by a congenital erroneousness which renders him incapable of describing accurately anything he sees, or understanding or reporting accurately anything he hears. As the only employment in which these defects do not matter is journalism (for a newspaper, not having to act on its descriptions and reports, but only to sell them to idly curious people, has nothing but honor to lose by inaccuracy and unveracity), he has perforce become a journalist, and has to keep up an air of high spirits through a daily struggle with his own illiteracy and the precariousness of his employment." - George Bernard Shaw, The Doctor's Dilemma

Now for a real question. Considering the Chicago Bears recent decision to trade away every first round draft pick they can, combined with their consistent interest in moving down in every draft, mixed in with their desire to lock players into long term deals (deep breath)....

1. Did this strategy give them Cap flexibility that was the real difference in the Cutler trade?

2. Is Angelo correct in viewing 1st Round picks as overpriced based upon the CBA agreement figures you noted above (15% inflation??? Is the Federal Reserve running the show???)

David

65
by Megamanic (not verified) :: Wed, 05/06/2009 - 4:17am

Great addition! Welcome on board JI. Can I suggest / beg you to do an analysis of how bad the Chargers upcoming salary cap hell is? You know, the Rivers, Gates, Merriman "perfect storm" and how feasible is it to fit them all in under the cap. Also, is the selection of Larry English really San Diego admitting they're not going to be able to keep Merriman or is it a plan to be really awesome in the pass-rush department for the next few years?

Another suggestion for an article is your take on the impact of a "cap free year" - which teams would use this as an opportunity to go crazy & spend like mad (we can probably name a couple of prime candidates from the NFC East but who else?) & which would rein it in & spend under the cap.

Anyway, welcome again & I'm really looking forward to reading your future articles.

67
by Theo :: Wed, 05/06/2009 - 7:09am

This really is a great addition. Welcome aboard and have fun here.

My question to JI is whether the way the Steelers manage the cap is much different than how other teams do it.
I hear and read that they fit in talent and when the rookie contract is up, and the replacement is ready, they get cut - especially linebackers. (see Gildon, Porter, Haggans, Foote)
Is there more to it, or do they things differently?

74
by White Rose Duelist :: Wed, 05/06/2009 - 3:53pm

Very nice. I look forward to reading more from you.

Just make sure Aaron et al. give you the green comment box.

75
by erniecohen :: Wed, 05/06/2009 - 3:56pm

While it's nice to have contract details (how about Harrison's?), the analysis here is not sound. It makes no sense to divide the guaranteed contract amount (earned over the minimal contract duration) by the contract length (its maximal duration). (For example, adding outrageously salaried years to the end of a contract decreases this ratio, without meaningfully changing the contract.)

A more rational approach is to look at what they will actually have to pay for how many years. In the case of Stafford, he is getting 13.9-12M/year, for 3-6 years (the longer they keep him, the less per year). By contrast, Long is getting 9.5-9.6M/year for 5-6 years. So DET is basically paying Stafford at least 25% more than MIA is paying Long.

Is Stafford's market value close to this? Unless DET knows something we don't, the answer would seem to be no. He's being paid elite QB money, there's little reason to think that Stafford is better than even money to turn into an elite QB, and in any case it's unlikely to happen in his first couple of years. So basically DET got fleeced in order to buck up their fans.

78
by erniecohen :: Wed, 05/06/2009 - 4:27pm

Now that's just creepy. About 1 minute after I posted, Harrison's contract details show up on PFT.

85
by erniecohen :: Thu, 05/07/2009 - 9:16am

Harrison is basicaly $7M/year for 3 years (plus incentives). I thought this was a fair figure until I learned that the average linebacker salary is $57K. Although, as the site warns, "Average linebacker salaries can vary greatly due to company, location, industry, experience and benefits."

87
by erniecohen :: Thu, 05/07/2009 - 9:44am

More average salary infor from www.simplyHired.com:

defensive tackle $91K
defensive end $49K
linebacker $57K
safety $45K
center $46K
offensive guard $63K
tackle $58K
lineman $45K
journeyman lineman $56K
tight end $65K
running back $47K
wide receiver $60K
quarterback $61K
kicker $30K
punter $227K

With the possible exception of punters, how about it we use this as the rookie salary structure?

88
by tuluse :: Thu, 05/07/2009 - 1:55pm

Considering the rookie minimum is like 200k, I'm pretty sure this figures must include the AFL and semi-pro leagues.

89
by erniecohen :: Thu, 05/07/2009 - 2:15pm

If you look at the actual jobs, none of them have anything to do with playing football. But that doesn't make the numbers any less fun. (My favorites are that journeymen linemen are paid more, and that punters are the most prized of all.)

81
by J.I. Halsell :: Wed, 05/06/2009 - 7:48pm

Ernie...you're actually right on point in your assessment and this is actually a way by most contracts are valued against one another (total value earned at a given year/by that year; ie, as you stated $41.7/3 years = $13.9M/yr). I happened to focus on guarantee money in this article because as a player that's all you can really bank on.

Also, Long's 5 year total per year is actually $10M (as his base total value earned after 5 years is $50M); while Stafford's 5 year total per year is $12.2, a 22% increase over Long.

J.I. Halsell
UNDER THE CAP

83
by erniecohen :: Wed, 05/06/2009 - 11:26pm

Hi J.I.. Thanks for your response.

I'd seen two different numbers for Long, the most recent one was I think 47.75 for the first 5. What's the best source for accurate contract information?

Anyway, my point was just that you can't compare contracts using just the data usually provided (duration, value, guarantees). Even if you care only about your guaranteed money, there's a big difference between a contract like Long's (where he has to play for 5 years to earn his guaranteed money) and Stafford's (where they have to pay him extra after 3 years).

Another question: do salary cap experts use mathematical programming to contruct optimal contracts conforming to CBA? (It works really well, at least for the NHL rules...)

77
by Sean D. (not verified) :: Wed, 05/06/2009 - 4:09pm

I would definitely be interested in seeing some contract breakdowns of the top QBs in the game. On a Chargers blog we had a basic discussion about this because Rivers will likely get an extension soon. It'd be nice to see some of the gory details behind what goes into the contract of some of the league's top QBs.

90
by Jason423 (not verified) :: Thu, 05/07/2009 - 11:20pm

What a great addition. Ill certainly be hoping that you can do the same for Mark Sanchez when he signs a deal in the coming months. Out of curiosity are those inflated guaranteed P5's in year 3-4 tied into contract escalators based on minimum PT or offseason participation in a workout program? I know with all those rules they have involving the 25% raises for the rookies that seems to be how they increase the base pay in future years. The other question I had is the 1 time NLTBE not available until year 2 or can it actually be earned in year 1? With the CBA opt out and NLTBEs accelerating to the cap as soon as they are earned is there any way that would hurt the Lions cap this season? Im looking forward to reading more of your work JI!