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The quarterback dilemma facing NFL teams when it comes to contracts and the salary cap

Big-money bets on QBs are shaping teams’ fortunes.

NFL: Los Angeles Rams at Dallas Cowboys Matthew Emmons-USA TODAY Sports

Quick, name the quarterback with the highest salary cap hit in the NFL in 2017? I imagine most people don’t know that Joe Flacco, with a $24.6 million cap hit is the most expensive player in this season’s NFL. Have you checked out Flacco’s numbers lately? Yeah, they’re not good:

  • QBR = 30 (50 is average)
  • Passer rating = 66 (average is around 94)
  • Adjusted net yards per attempt = 3.3 (league average is 6.1)
  • 4 touchdowns versus 8 interceptions

In short, Baltimore is paying top-shelf price for rotgut performance. And they’re not alone. The top five quarterbacks in terms of salary rank 19th (C. Palmer), 5th (K. Cousins), 10th (M. Ryan) and 8th (A. Rodgers) in QBR for the season.

And what are the salary cap hits for the players ranked 1-2-3 in QBR? A combined $9.2 is being spent on Deshaun Watson, Rayne Dakota Prescott and Carson Wentz. The point here is quarterback is the most important position in the NFL and in all of professional sports. Yet in the NFL, where salary cap restraints require teams to be efficient with cap spending, there is absolutely no correlation between cap space spent on quarterbacks and quarterback performance.

Here’s what a chart would look like if QB salaries were being spent efficiently by NFL teams:

Now, here’s what the actual chart looks like:

There’s so much revealed in this single image; let’s break it down. Obviously, the ideal is the top left where player’s are performing well while using very little cap space. On the other end, you don’t want to be living in the Flacco neighborhood. Key observations:

  • The top-left quadrant is occupied by the future of the NFL. Players on rookie contracts who are already playing at high levels. This includes the Cowboys’ own Prescott, Deshaun Watson, Carson Wentz, Marcus Mariotta and Case Keenum (Case Keenum?).
  • We also find a lot of big-money, big-name veterans occupying the high cost / middling performance areas. These players can be broken up into two groups:
  1. Aging veterans who have largely earned their big contracts but aren’t quite what they once were. This includes Ben Roethlisberger, Drew Brees, Phillip Rivers, Eli Manning and Carson Palmer (although Palmer has always been overrated IMO; never been more than an average QB). Most are near the end of their careers and teams will be looking to move on from them in the next couple years.
  2. The second group, however, is made up of quarterbacks in their primes who have accomplished little but have been given big-money, long-term contracts. These are players whose teams have bet they will lead them to the promised land. The names here include Derek Carr, Matthew Stafford, Andy Dalton, Cam Newton and Matt Ryan.
  • There’s also a group of low-cost, low-performing quarterbacks which is a who’s who of desperate low-grade gambles by teams with no better choices at quarterback. Trevor Siemien, Blake Bortles, DeShone Kizer and Brian Hoyer are basically occupying low-budget placeholder positions until they prove themselves or better options come around (Hoyer is already being replaced by C.J. Beathard).
  • Finally there are a group of outliers that don’t belong to any particular group; these are players who put their teams in unique positions. Tom Brady, widely regarded as one of the best to ever play the position, has taken only mid-level quarterback money the last few years. Russell Wilson doesn’t have elite performance numbers this year but has a proven track record of clutch performances and numerous playoff skins on the wall. Kirk Cousins is in the big-money/high-performance quadrant but is playing on a franchise tag for the second consecutive season. Alex Smith has been a fairly good player much of his career but has put up an MVP-type performance in 2017 on a big, but not huge, contract. Mike Glennon, despite never accomplishing much, is being paid proven-starter money by a Chicago team that has already replaced him with their rookie Mitch Trubisky. Not shown is Andrew Luck ($24.4M) who is injured and has never lived up to his “can’t miss prospect” status. And of course we have Joe Flacco occupying a large, sad space all by himself.

That’s the state of where we are, with players all over the spectrum in terms of performance versus cost. While QBR is my favorite metric to measure quarterbacks, there’s others we could use. Passer rating and adjusted net yards per attempt are two additional measures of all-around QB performance. Each shows no correlation between performance and salary:

These charts reveal the biggest challenge facing NFL general managers: how to fit a quality quarterback onto your roster without him eating up so much cap space that he’s surrounded by a mediocre team. Many people have criticized the Redskins for not committing long-term to Kirk Cousins. But their reservations are understandable. Consider the big-money, long-term contracts handed out to QBs the last few years:

Outside of Tom Brady, none of the teams that have handed these contracts out have thrived.

The challenge teams face is when a young, promising quarterback faces free agency they generally demand elite-level, long-term contracts with concurrent big bonuses, guaranteed moneys and potentially debilitating cap hits. These contracts are often not in line with their actual performance. But teams give them out because no one wants to be the GM who lets a franchise quarterback walk away. A couple recent signings show how this can trap teams.

Joe Flacco and the Baltimore Ravens will always have their 2012 Super Bowl win; flags fly forever and all that. But Flacco parlayed his excellent post-season run that year into a then-record contract. But the contract was back-loaded and the Ravens faced a 2016 reality where Flacco’s $29M cap hit would cripple the team. He could be cut with $25M+ in dead money or they could renegotiate his contract and reduce the 2016 pain by pushing the cap hit into the future. They chose the final option. As a result the Ravens find themselves in their current predicament, paying elite-level money for garbage-level performance. Considering Flacco’s dead-money numbers, they’re unlikely to get out from under the contract until 2020. They’re the NFL version of a dead man walking.

Derek Carr and Matthew Stafford signed big-money, long-term contracts this offseason and already I imagine fans of both teams are wondering about those investments. The Carr deal was structured better, enabling the Raiders to get out from under it without too much pain. But Carr had very little track record to have warranted such an investment. Stafford has been better over his career, but he’s the poster-child of a good quarterback being paid elite money. We’re talking about a guy in his ninth year with 115 starts, 0 playoff wins, one Pro Bowl honor and slightly-above-average statistics. Does that sound like someone who should be the highest-paid player in the game? Yet that’s where we are in the modern NFL; good quarterbacks being compensated like future Hall of Famers.

Note the more recent a contract was signed, the bigger the cap hit and the more dead money. That’s a natural progression and wouldn’t be a big deal if overall salary cap numbers were rising at the same rate as quarterback salaries. But are they? The following shows the top NFL QB salary cap number and total salary cap numbers indexed to 2011:

We see quarterback salaries outpacing salary cap growth. What this means is every year, when a team bets on a Kirk Cousins or Derek Carr or Matt Stafford they’re making ever bigger bets which consume bigger portions of the team’s total salary cap. Each bigger bet further limits what that team can spend on the rest of the team.

A look at 2018 cap hits shows that often times these are not winning bets:

I think if Detroit, Oakland, Baltimore and Indianapolis each had a do-over they’d handle the top four contracts in this table differently. But the choices at the time were: either spend elite-level money on mid-level players... or start a rebuild process with an unknown quarterback.

Think of a team like Atlanta. Matt Ryan is already in his 10th year. He’s already earned one big-money extension ($118M over six years through 2018). Ryan is scheduled to become a free agent in 2019. He’ll be 34-years old. He had an MVP season in 2017, is a 4-time Pro Bowler and has an 88-59 record as a starter. But he hasn’t looked as good in 2018 as he did last year. Do you extend him after 2017, knowing he’ll probably demand upwards of $30M annually and probably $65-75M guaranteed? He’ll be in his late 30’s and has exactly one elite season on his resume. The Falcons are almost certain to extend him. Yet, I’d argue this route is more likely to land Atlanta in the Joe Flacco neighborhood than the Aaron Rodgers neighborhood? What would you do?

None of the options are good. It’s very difficult to win in the NFL without a quality quarterback. But it seems almost as difficult to win with a quality (but not elite) quarterback eating up 15% of the team’s salary cap. Dallas will eventually be facing this decision with Dak Prescott. He becomes a free agent in 2020 but I wouldn’t be surprised to see the Cowboys extend him prior to the 2020 season. That would make Cowboys’ fans very happy.

But at what price? Will the going rate be $35M by then? Can the team succeed long-term with one player using up nearly 1/5th of the team’s overall salary? These decisions largely determine NFL franchises’ fates.

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