Matt Cassel Extension Proves NFL Salary Cap Useless
Andrew Brandt of the National Football Post has the lowdown on the Cassel contract:
Cassel was due to make $14.65 million this season, fully guaranteed (he will still make about the same number, around $15M). Had he played out the year and been tagged with the franchise tender next year, a scenario that was not unlikely, he would have made 120 percent of that number in 2010, or $17.58M guaranteed. Thus, had Cassel not done an extension, he could have reasonably expected – barring injury or a dramatic drop in performance – to make $32.23M guaranteed over two years.
Instead of that $32.23M, Cassel will make $28M in guaranteed salary and roster bonus, all earned in the next two years. However, if he’s on the roster on the opening days of the 2011 league year, there is a $7.5M guaranteed option bonus in the third year of the deal, 2011, bringing the “functional guarantee” to $35.5M for the six-year, $63M contract.
As to the $63M, it’s very similar to what Aaron Rodgers made from the Packers last fall ($65M) after starting seven games for the team. Rodgers, however, was playing for less than $1M. Cassel was playing for $14.65M.
At the end of the day, it appears to be a deal that works for both sides. It’s a strong deal for a player with one year as a starter under his belt and a good deal for the Chiefs to lock up one of the prime assets in the sport – a young and proven quarterback – in a time where, despite the economy, asset values of ascending young quarterbacks will only continue to rise. Somewhere, Eli Manning, Philip Rivers and Jay Cutler are watching with great interest.
Two thoughts on this one:
1) The New England Patriots put the franchise tag on Matt Cassel. Not the Kansas City Chiefs. Part of the reason that Cassel had limited trade value in terms of the compensation received from the trade is that the team that was on the receiving end HAD to pay Cassel either the $14.7 million, or an equal or greater sum in guaranteed money. After the Chiefs decided that they could afford to invest that much money in a single player, a potential franchise player, then they made the move to acquire Cassel. But from the Patriots perspective, he was a necessary salary dump from the very day he was tagged. The tag itself heavily decreased the value of Matt Cassel, but from the Pats perspective, it’s the only way they could cash in on Cassel, who was otherwise an unrestricted free agent.
Understanding that, the Chiefs acquire Matt Cassel on a contract that essentially becomes a one year $15 million deal, with a one year $17 million option. He comes with that. The 15 million represents the smallest amount the Chiefs can give Matt Cassel. But once you write that off as a sunk cost, the 2009 season becomes a free evaluation period of Matt Cassel. If he’s a bad fit in that role, he can be non-tendered at the end of year, benched in the middle of the year, whatever. It goes down as a losing gamble, but all it cost you was a second round pick, and a whole lot of someone else’s money (more on this below), not to mention the two years of Mike Vrabel that you also got in the trade.
The Chiefs extension of Cassel gave up the option year in exchange for a conversion of the contract into a two year absolute guarantee, then an option year, and some inflated salaries on the back end of the deal. On the surface, this seems like a fair trade off. Just putting the franchises faith in Cassel now before the price potentially skyrockets later. But it’s not quite that simple.
2) My second thought is that, we’ve reached a point where the NFL salary cap is not a relevant figure to about 75% of the teams in the NFL. The Chiefs are included in that figure. The key principle here is in the revenue sharing. The Chiefs fall on the end of the spectrum where, every year, the top end of the teams payroll is coming out of the shared revenue they receive from larger markets. The Chiefs are not spending to the salary cap on a year by year basis any more. In 2005 and 2006, they were a cap-strapped franchise. Just three years later, this rebuilding franchise is closer to the salary floor.
To the majority of NFL teams, the NFL’s salary floor is the more relevant figure. This years’ salary floor is approximately at 115 million dollars: or right around last year’s salary cap. The NFL has a salary floor for two reasons: a) to prevent small market teams from squatting on, not spending, their shared revenue, and b) so that the players get a bare minimum piece of the pie.
This is relevant because, as I mentioned above, in making this extension, the Chiefs moved most of the money owed to Matt Cassel from that shared revenue pie, to a deferred signing bonus which is highly dependant on the terms of the new collective bargaining agreement. The short term benefit is that it frees up some salary cap space, but the Chiefs simply aren’t going to use that space.
Very possibly, the Chiefs might have tried out Matt Cassel for a season, liked what they saw from him, and ended up giving him the same deal he just got one year later. What would this have cost team? $14.7 million in shared revenue and some otherwise unused salary cap space? Where do I sign up?!
One final thought…
We talk about franchise quarterback money reaching insane levels, such as $10 million a year for a young franchise quarterback such as Matt Schaub, David Garrard, Aaron Rodgers, or Matt Cassel. That’s not an elite list of quarterbacks, mind you. Those are four players with one good season to their name each, one of which was paid entirely on his prospects. Of course, that’s kind of a misnomer: they were all paid on their prospects. Let’s not mince words here: for players who even sniff playoff success at the QB position, we’re talking $15-$20 million a season.
I mean, we rant, and we rave about players at the top of the draft who have never taken a snap in the NFL, and are getting $20, $30, or even $40 million in guaranteed money on their rookie deals. We forget that the teams are taking them have the option to choose from more or less 1/4 of the entire college football pool, and settled on one of 3 or 4 people who they considered the very best of the best…and then those players are paid for who the teams think they can be. Well, the quarterback market has gotten even worse than this, as the list above shows. But unlike the NFL draft, which is simply skewed to overpay the players in the top ten, the quarterback market is being thrown off to the point where flashing NFL quality skills means you earn 8-10 times what your comparable 2nd or 3rd round prospect gets.
The reason this is happening in the market is the obscene salary floor. The teams are not ALLOWED to hold on to the money, so the small market teams are being forced to spend in excess of their total revenues. It’s manifesting itself in the quarterback market, but defensive players such as DeAngelo Hall, Nnamdi Asomugha, Terrell Suggs, and Albert Haynesworth are getting in on the action as well (although this isn’t as ridiculous).
The NFL salary cap and salary floor must go. If it means that NFL revenue sharing must go as well, then so be it. Small market teams still have the power to improve their team through the draft, and in the meantime, there are major Moneyball type market niches being created in terms of QB fungibility, with second tier players being left out of the league entirely because of the ridiculous premium the market has placed on finding that ONE player who can make a team.
And it’s that last sentence that essentially explains the otherwise ridiculous Cassel extension in it’s entirety.