Trying to figure out exactly what type of contract a pending free agent will get can be a tricky exercise. Spotrac attempts to do this by looking at the expected market for key free agents, but what the market is that for the player could be lower than what the player actually receives. Jason Fitzgerald has suggested agents should ask for 20 percent more than what comparable players are getting, but that does not mean the player will get that amount.
I do believe, though, that the rules of thumb that Spotrac and Jason provide can be useful in figuring out what the most likely contracts will be, in terms of average salary per year. We can do this by remembering a few things about contract negotiations.
* Players and their agents will always start by asking for more than they believe they will actually get.
* Good teams will make initial offers that are at or slightly below what they expect the market value of the player to be.
* Some positions will hold a higher market value than others because that position is in demand.
* The market value for a player could be lower than expected because comparable players who signed previous contracts didn’t perform at an expected level.
If we take a look at the top four pending Broncos’ free agents, we can arrive at some definite conclusions. Von Miller plays a position that is in high demand and top pass rushers have been paid generous amounts in recent seasons. Brock Osweiler plays a position that is in high demand but comparable players to him haven’t always panned out. Malik Jackson plays a position at which several players have already received generous extensions. Danny Trevathan is one of the better players at his position but the market doesn’t appear to be strong for that position.
In this exercise, I want to examine what Spotrac has determined is the current market value for each player. Then, I will examine the similar players Spotrac compared to them (Spotrac looks at players who were a similar age and performance level at the time they signed a new contract) and what the average value of those contracts turned out to be. From there, I’ll consider whether or not Jason Fitzgerald’s “20 percent above comparable players” rule makes sense or if the agent should seek more than that. Finally, I will determine what would be the likely final price for the player.
All figures I will review are average salaries per year. There is, of course, the question about contract length, fully guaranteed money and injury-only guarantees, but I will touch briefly upon those when considering who the Broncos are likely to want to keep.
For each one, I have linked to Spotrac’s analysis of comparable contracts, so you can see exactly which contracts were used. Keep in mind that Spotrac is comparing players at the time they signed deals, not where they are at now.
Spotrac’s market value: $15M APY. On the surface, it would appear Miller isn’t going to get paid that well, because that number sounds pretty low. But this is where the rest of the story comes into play.
Average of comparable players: $15.25M APY. Spotrac used the contracts of Justin Houston, J.J. Watt, Mario Williams and Ryan Kerrigan, all pass rushers who recently signed sizable contracts. Kerrigan’s deal, which averages $11.5M per year, does lower this average, but that’s countered by the other three who each got an average of at least $16M per year. (Spotrac’s analysis is here.) But then comes the next part.
What Miller should ask for: $18.3M APY. If you take the average of those four players and increase it by 20 percent, you get a pretty sizable figure per year. I would imagine Miller and his agent will want to use the average salary per year for Ndamukong Suh ($19.2M APY) as their asking price, but they probably should go closer to what I have suggested as it would get closer to what the Broncos will likely offer, based on market value, and what a contract should really come out to.
What I expect Miller to get: $17.1M APY. This would make Miller the second-highest paid defensive player in the NFL. It’s still more than the average per year that Watt and Houston are getting or that Williams got in his deal (we know Williams will likely be released from that contract). As for contract length, I think six years is reasonable (making the total $102.6M), because he’s a player you want to keep for the long term.
If we assume a $14M franchise tag, the Broncos can put $14M in full guarantees in the first year of the deal, some as a base salary and the rest as a roster bonus, and give him a $6M signing bonus for $20M in fully guaranteed money in the first year at a $15M cap number. Obviously, the Broncos will have to pay more fully guaranteed money than that. Justin Houston got $32.5M in full guarantees when he signed his deal, so I would imagine Miller will get $34M in full guarantees, meaning you would fully guarantee $14M of his salary in 2017.
Assuming you keep his cap number close to the 2016 number, you would probably give Miller an additional $2M in injury-only guarantees, for a $16M salary and a cap number of $17M. Additionally, the third year (2018) would contain $10M in injury-only guarantees that become fully guaranteed at a certain point in 2017, with the remainder becoming fully guaranteed in 2018. Houston will get $16.35M in 2017 (third year of his deal), so I’d go with $18M for Miller in 2018 (cap number at $19M), giving him $54M in total guarantees, again exceeding what Houston got ($52.5M).
Spotrac’s market value: $10.2M APY. That’s certainly lower than what Nick Foles actually got per year, but it’s important to remember that the market value will usually be lower than what the player actually receives. So when I put together my earlier example of an Osweiler contract, I did underestimate the market.
Average of comparable players: $11.6M APY. The contracts Spotrac used were Nick Foles, Mark Sanchez, Matt Cassel and Kevin Kolb. When Sanchez signed his extension with the Jets, he got $40.4M over three years. Cassel’s extension with the Chiefs was $63M over six years, while Kolb’s extension with Arizona was $62M over six years. (Spotrac analysis is here.) So it’s not just Foles’ contract that may come into play. This average is also pushing up what Osweiler may get as we get to the next step.
What Osweiler should ask for: $13.9M APY. I imagine Osweiler and his agent will try to get $14M APY. But given that you ask for more than you think you will get, it’s not likely he’ll get near that sum. If he does ask for more than $14M APY, the Broncos will have to ask themselves if it’s better to look elsewhere.
What I expect Osweiler to get: $12.5M APY. After having given this more thought, there is a contract that would make more sense to give to Osweiler. I would go three years at $37.5M. Going with $12M in the first year, $12.5M in the second and $13M in the third would accomplish that, with escalators that could potentially increase the second year’s salary and the opportunity for Osweiler to void the deal after two seasons. Incentives could be added to the first year, too.
I would make no more than the $12M in the first year fully guaranteed, though. While it wouldn’t be more than what Foles got, one thing to remember is Foles had a larger sample size of starts. Also, the Broncos don’t want to be on the hook for any salary in 2017 unless Osweiler demonstrates he can get the team to the playoffs. But in exchange for Osweiler taking just $12M in full guarantees, I would make sure not only that Osweiler’s entire 2017 salary is injury-only guaranteed but it becomes fully guaranteed if he takes 70 percent of the snaps in 2016 and the Broncos make the playoffs, rather than waiting until the 2017 league year for that to kick in. That would actually give Osweiler more total guarantees ($24.5M) than Foles received ($13.7M). As for how to structure the full guarantees, the Broncos could give him a $6M signing bonus and his 2016 salary as a $3M roster bonus and a $3M base salary, giving him a cap number of $8M in 2016 and $14.5M in 2017. Assuming he plays to his potential, he would void the deal, meaning the Broncos have $2M in dead money but $13M in available space to put toward a new deal for Osweiler.
Spotrac’s market value: $10.7M APY. This comes in at less than what Calais Campbell and Cameron Jordan are getting in average salary per year ($11M). But it comes in at more than Derek Wolfe and Mike Daniels received per year ($9M and $10.25M). Thus, you can see it’s already going to be difficult for the Broncos to get him extended.
Average of comparable players: $9.6M APY. As you can see, the contracts for Wolfe, Everson Griffen, Cameron Heyward and Calais Campbell used by Spotrac for comparison come out to less than the market value. (Spotrac analysis is here.) In other words, the market is going to be stronger than it what might have been otherwise for defensive ends. So it’s a good time for Jackson to cash in. But given that this average is less than the market, it makes sense that Jackson should ask for more than what a 20 percent increase is over that average.
What Jackson should ask for: $12.5M APY. A 20-percent increase over the average above is $11.5M APY, which seems a little low when compared to the expected market for his services. So I added an additional $1M to that, giving Jackson and his agent a better ceiling to start their negotiations. That should get them closer to what would be his likely compensation.
What I expect Jackson to get: $11.3M APY. That contract would put Jackson past Jordan and Campbell. He’d still be paid less than Chris Long and Charles Johnson, but chances are good those two will have to take less money to stay with their teams or be released, because both are coming off down years. It’s also less than Mario Williams, but we know he’ll be a cap casualty. So the amount I suggested should be close to what Jackson will get. On a five-year deal, that makes it $56.5M in total money, which may be more than what the Broncos can afford to give him. This is why I’m still betting that Jackson will be playing for another team.
Spotrac’s market value: $6M APY. That does seem to be lower than what some might expect, but it would seem that Spotrac isn’t anticipating as strong of a market at inside linebacker.
Average of comparable players: $6.4M APY. Using contracts for Jon Beason, Donald Butler, Stephen Tulloch and Bruce Carter, the average comes out slightly ahead of the market, which would appear to be a good starting point for arriving at the next step. (Spotrac analysis is here.)
What Trevathan should ask for: $8M APY. The actual 20 percent adjustment would bring it to $7.7M, but I think Trevathan and his agent can get away with asking for a little more than that. They are putting themselves above the $7.4M APY that Donald Butler gets, and comparing Trevathan to Daryl Washington, who makes $8M APY salary.
What I expect Trevathan to get: $7.3M APY. While the market may not be strong, it’s hard to justify Trevathan taking less money than Mychal Kendricks, who is making $7.25M APY on a four-year deal. I would imagine Trevathan gets a four-year deal, and at what I expect him to get, that’s $29.2M in total money. That is likely why the Broncos may let Trevathan walk, as they aren’t likely to want to commit that much money to an inside linebacker, especially if they believe Brandon Marshall is the better player to commit to for the long term.