While free agency can be a good place to find immediate help at positions of need, you have to be careful with how you structure a deal, regardless of what the market dictates. That’s because you want to be able to get out of a deal as early as possible if the player doesn’t live up to expectations.
We’ve seen how John Elway operates with most free agent contracts. The bulk are the type he can get out of after a year from a cap and cash standpoint, though he is willing to go with a two-year commitment in some cases and, with players who the Broncos have drafted and developed, a three-year commitment. The two-year commitments usually go to players who don’t have carry too much risk.
There have been years in which Elway has misjudged the market for certain positions. Last year was a good example. Elway seemed to approach it with the idea that the top offensive tackles would get large contracts, so he first went with Donald Stephenson on a low-end starter’s contract. Instead, the market developed to the point that Mitchell Schwartz signed a contract that didn’t make him the highest paid at his position and Donald Penn took a lower-cost deal. Elway did get Russell Okung signed to a team-favorable deal, but his misjudgment with Stephenson cost him what could have been a better option.
This year, though, Elway correctly judged (and I had misjudged) that the market would mean offensive tackles would get paid a lot, so he went with the best possible offensive lineman first, regardless of position, and paid Ronald Leary a two-year commitment. Then he went with Menelik Watson, who took a deal that was similar to Stephenson, which might give people pause, except that it fits more in line with a low-end starter when compared to other deals, especially after free agency settled down.
I wanted to examine the other contracts given to offensive linemen to see what the deals really reflect and whether that’s the type of deal I can picture Elway giving the player. And in some cases, you’ll find that the deals given to offensive linemen are not favorable to the team, meaning those deals could come back to haunt the team if the player doesn’t live up to expectations.
Russell Okung: Effectively two years at $25M.
In terms of the total contract, no offensive lineman got a higher APY salary than Okung ($13.25M). From a practical standpoint, though, Okung got $12.5M per year on a two-year deal. That still amounts to more than what Okung would have earned in fully guaranteed money the next two years, had the Broncos picked up the team option on his previous deal.
It’s hard to fault Okung for wanting to get paid well while he still can. But from Elway’s standpoint, the team was better served to treat Okung as an effective one-year commitment. That would mean fully guaranteeing the first year of the contract, but making the second year an injury-only guarantee and keeping the signing bonus as low as possible. Okung got a $10M signing bonus on a four-year deal, meaning a $5M dead money charge if he’s cut after two years, which is OK considering $11M of space would be freed.
The one thing I don’t like about Okung’s deal is guaranteeing him two years worth of salary. Again, an injury-only guaranteed salary would have been for the best with Okung. I might have gone with a slightly smaller signing bonus, too, but the structure isn’t that bad overall.
Riley Reiff: Effectively two years at $26.3M.
From a two-year standpoint, Reiff gets more money than Okung. He also gets more money over the length of the contract, though his APY salary is lower ($11.75M). Still, I don’t think there’s any chance that Elway gives Reiff $26M in full guarantees over two years.
Reiff got an $11M signing bonus, which means a $6.6M dead money charge if he’s cut after two years. It will only free $5.1M in cap space, so it’s not the best structure. The Vikings may very well be hanging onto Reiff for three years, even if he doesn’t live up to the terms of the contract. I think it’s safe to say Elway would not want the deal structured like it was.
I definitely would not have given the full guarantees to Reiff that he got and would definitely want his deal to have an injury-only guarantee in the second year. Most of all, I would prefer to go with as small a signing bonus as possible. A $5M signing bonus does mean you have to put a lot of money into a base salary or roster bonus, but in the long run, you have a more manageable cap hit if you have to cut him.
Andrew Whitworth: Effectively one-year at $12.5M; $2.5M in 2018 likely has offset clause.
I give credit to the Rams for doing a good job with this contract. Though there is some fully guaranteed money due in the second year, I assume the deal has offset clauses and, at $2.5M, there’s a good chance that somebody would sign Whitworth to a one-year deal for more than that if he was cut. And the Rams will gain more cap space than they lose in the second year of the deal should they cut him.
With that said, I don’t know if Elway would give Whitworth any fully guaranteed money in 2018, offset clauses or not. I suspect the main reason Elway didn’t pursue Whitworth was his age, an understandable reason. But I wouldn’t have had any issues with giving Whitworth the money he got in 2017. The only change I might have made was ensuring the entire 2018 salary would only be paid to Whitworth if he was on the roster by the fifth day of that league year.
Matt Kalil: Effectively three years at $31M.
As I look at the contract details on Over the Cap, I’m not sure I understand why the Panthers would agree to this contract. Kalil appears to have received $24M fully guaranteed upon signing. That deal includes a $12M signing bonus over a five-year deal, which I’m not a fan of. And then there’s a $10M option bonus. You would think the option allows the Panthers to get out of the deal early, but that’s a problem if the money is already counted in the full guarantees.
Remember, with full guarantees, the team only gets out of them if there’s an offset clause. I assume the Panthers did that, but that means if they don’t keep Kalil, they need somebody to pay him $11M in a single season. So the Panthers appear to be betting that somebody will give him that money if they decline the option. And even if they do, they are still stuck with a $9.6M dead money charge thanks to the signing bonus structure.
Furthermore, if they pick up the option, they’ll structure that like a signing bonus, too. That means the Panthers will be stuck with Kalil through 2019 if they keep him. In 2020, they get $6.1M in cap space freed but a $9.8M dead money charge if they cut him. Holy bad contract structure, Batman!
Safe to say that Elway would never give Kalil this type of contract. Doing a “contract within a contract” is fine, but there are two things you need to do. First, structure Kalil’s $13M upon singing on better terms: $5M signing bonus, $4M roster bonus, $4M base salary. Second, don’t fully guarantee anything in 2018. Third, make sure that the option bonus is paid as a roster bonus so you don’t add more to the dead money if you exercise the option. You can always revisit down the road if you think Kalil is worth keeping for two more years, but you can figure out how much you want to restructure then, rather than locking yourself in now.
Ricky Wagner: Effectively three years at $29.5M.
Wagner got a mix of full guarantees and injury-only guarantees in this contact. The fully guaranteed money is all right… $17.5M comes in the form of a signing bonus and his 2017 base salary. I would be OK with giving that to Wagner, though I can’t speak for Elway, who appears to believe that Leary was the better player to commit that type of money.
The Lions’ problem is the contract structure. $14.5M of the salary went into a signing bonus, which means it’s not possible to cut Wagner after one year. That’s when Wagner will collect an additional $3M in base salary. After that comes a $9M base salary in 2019, guaranteed for injury only upon contract signing. Though the Lions could cut Wagner from a cash standpoint, it’s not as practical from a cap standpoing because they gain just $3.2M in cap space against $8.7M in dead money.
Again, I’m not against the full guarantees Wagner received upon signing. But I don’t like the contract structure and I think Elway would want to avoid this structure, too. Obviously, you’d have to spread the full guarantees over two years to get the signing bonus lowered and still keep the full guarantees where they were at. So whether you think Wagner would have been the better option over Leary depends a lot on how much fully guaranteed money you think he’s worth.
Kelvin Beachum: Effectively one year at $8M; $4M in 2018 likely has offset clause.
The contract Beachum got is one I could see Elway agreeing to, save for fully guaranteeing any money in 2018, offset clauses or not. I’m OK with the contract overall, though, because if the Jets did cut him after one year, another team would likely pay Beachum $4M to see if he has anything left. So the deal isn’t likely to hurt the Jets in the long term.
The only thing I would add is whether or not Beachum is the type of lineman that Jeff Davidson wants to work with. Given that the Broncos are pursuing linemen who are big, strong and physical, Beachum might not fit that description.
But if only looking at things from a contract standpoint, and not worrying about age, scheme or type of player a coach likes, I’d be fine with the deals given to Whitworth and Beachum for a left tackle, though I might quibble about fully guaranteed money beyond the first year. I’m on the fence about Wagner… I’d guess I’d be OK with it, though I’d definitely want the deal structured so I can get out of it after two years and gain more cap space than I lose to dead money. But as for the rest of the contracts offensive tackles got, all I can say is I’d much rather take my chances on Menelik Watson, Donald Stephenson and a draft pick, with Michael Schofield a possible option, than I would on any of the contracts handed out to those tackles.
