The Quarterback Contract Conundrum

[dt_divider style=”thick” /]NFL teams throughout the league have a quarterback problem, and they’ve had it for a while. It’s not difficult to figure out that there is a shortage of franchise quarterbacks in the NFL. That’s why teams pour a ton of money into trying to sign or draft their next franchise quarterback – sometimes simultaneously. The Houston Texans took a risk on their next potential franchise quarterback and signed Brock Osweiler to a four-year, $72M deal during the 2016 offseason before trading him to the Cleveland Browns in March of 2017. Houston then traded up to 12 from 25 to snag Deshaun Watson, giving up their 2018 first round pick to Cleveland in the process. The Chicago Bears used cap space and draft capital to sign Mike Glennon to a three-year $45M contract in free agency with $18.5M guaranteed and then traded up one spot to second overall in the draft to select Mitchell Trubisky from North Carolina. That deal gave the San Francisco 49ers the third overall pick, a third round pick, fourth round pick, and a third round pick in next year’s draft. The Seattle Seahawks did something similar in 2012, signing Matt Flynn and drafting Russell Wilson, albeit Wilson was a third rounder.

It worked out well for the Seahawks as they figured out early that Wilson was the guy and won a Super Bowl while he was still cost friendly to the team. Soon after though, the Seahawks had to part with some of their core role players to help fund their expensive franchise quarterback. In 2015, the Seahawks and Wilson agreed to a four-year $87.6M contract extension with $61.542M fully guaranteed according to Over The Cap. Wilson is a franchise quarterback, but it has been difficult for Seattle to get out of the Divisional Round since he inked that deal. Which of course is unfair to place all to blame on his deal itself because the team also wouldn’t make the playoffs without him at this point. And therein lies the paradox. You’ll lose without a franchise quarterback and you’ll lose with one if you’ve overpaid one relative to his peers. The former will result in losing more which makes teams pay quarterbacks more than their peers without talent level being a real factor.

It’s the conundrum a team like Washington is currently facing with Kirk Cousins. Washington has franchise tagged Cousins two offseasons in a row resulting in cap hits of $19,953,000 and $23,943,600 in 2016 and 2017, respectively. His cap hit for 2017 is third highest in the NFL for quarterbacks behind Joe Flacco and Carson Palmer according to Spotrac. Signing Cousins to a long-term deal would allow Washington to spread some of that money out and lower his cap hit to allocate money elsewhere, but that is the dilemma. Cousins is a good quarterback, but he’s not going to win games without a strong supporting cast like Aaron Rodgers or Andrew Luck, two elite talents that are sixth and 11th in terms of 2017 quarterback cap hits, respectively. Figuring out Cousins’s value is the issue because he essentially holds all the cards. There is no one on the street or in house that Washington can replace him with and expect nearly the same level of production. Cousins led the third best total offense in the NFL in 2016, averaging an explosive 403.3 yards per game.

In a way this is the NFL’s fault. The salary cap doesn’t allow players to earn as much as they potentially can earn, especially quarterbacks. NFL.com’s Gregg Rosenthal wrote a piece stating that Derek Carr and other franchise quarterbacks are not paid enough. Rosenthal is right, the salary cap limits what players can make. The quarterback position is always going to be paid the most because it is the most important position on the field and it should set the market for the rest of the positions and players within their own position. However, what happens now is every time a quarterback that is anywhere between good and elite reaches the end of their contract they’ll ask to be paid the most because the elite quarterbacks aren’t always the highest paid. That’s due to the rise in the salary cap every year, as the NFL generates more and more revenue with each passing season. This ultimately helps franchises save on elite quarterbacks in the long run. Without the salary cap, quarterbacks would command much more money than they’re being paid today even if we don’t have an exact dollar figure. Quarterbacks and their salaries are hitting their heads on the ceiling of the salary cap. There is somewhat of a marker for a franchise quarterback. As no quarterback, besides the one’s on rookie contracts, make between $6M and $15M in average annual value per year (which is different from 2017 cap hit seen in the chart below).

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In theory this is a problem for the parity of the league – supposedly one of the results of having a salary cap in the first place. How are teams supposed to compete when they’re paying average to good quarterbacks the same amount as elite quarterbacks? Teams are at a disadvantage paying all franchise quarterbacks the same amount due to the disparity in talent level. If teams are all paying the same premium price for the quarterback position with a limited amount of resources to allocate amongst 53 players, but each are getting drastic different levels of talent, then those signing the lesser talented quarterbacks are losing value. Paying a player like Kirk Cousins top dollar hurts because it makes it difficult to close the talent gap on teams like the New England Patriots in the grand scheme of the league. Cousins’s salary would exceed his talent level thus forcing Washington to have to figure out a way to keep costs down at other positions and get surplus value from those contracts and players’ play. That makes a general manager’s margin of error razor thin in the draft where players are cheaper. The Patriots on the other hand are afforded the luxury of paying Tom Brady the 14th highest average annual salary at $20.5M and his cap hit for 2017 is only $14M – tied for 19th with Mike Glennon. This allows New England to allocate cap space to positions of need around their roster while they get surplus value from the quarterback position.

General managers or whoever is tasked with signing and re-signing players for a given team have almost no leverage with a situation like the one in Washington. Doug Williams and company need Kirk Cousins to stay relevant. Letting Cousins put on another uniform could mean a quick tenure for decision makers in Washington. It seems the smartest strategy is to pay the franchise quarterback handsomely despite him not being an elite talent, because it allows you the ability to try and compete. The other option is losing the quarterback and possibly losing your job. Washington is likely to make a decision by next year as they won’t want to franchise tag Cousins for a third straight year which would result in his cap hit increasing to $34.47M.

Moving forward, quarterbacks around the league who are due for an extension will use Carr’s deal as the current way to gauge the market. Players like Cousins, Matthew Stafford, and Aaron Rodgers are soon going to get paid with Stafford possibly setting the next record contract. Y’know, before Rodgers breaks that record right after. Then will come the next generation of passers like Marcus Mariota, Jameis Winston, Carson Wentz, and Dak Prescott. There’s no way for franchises to stop this dilemma until the league lifts the cap or they all stand their ground and actually pay quarterback proportionally relative to their peers talent level. And that’s not happening anytime soon.

Check out more of Joseph’s work here, including a look at Kareem Hunt’s superior balancea lesson in tanking, and Chris Godwin’s separation ability.

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