Free Agency Frenzy
Words: Patrick Flanagan Twitter:@padjoeflanagan
NFL Free Agency is well under way, and we’re all thinking the same thing – from fresh faced fanboys to seasoned veterans – WHAT THE HELL IS GOING ON!?
Like with most sports, the Free Agency period marks the conclusion of many players’ contracts who then become eligible to sign with a different team of their choice. As with most NFL institutions, Free Agency is guided by established practices and values that are often obsolete or nonsensical (Sometimes both!). We’re then left dazed and confused by the whirlwind of news, moves and dollar signs, wondering HOW DID THAT JUST HAPPEN? Here we’ll try and explain some of the myths of Free Agency to make better sense of the madness.
Best Teams (Don’t) Get the Best Players
Unlike most other major sports, the majority of best players rarely sign with the best teams. There will be exceptions – Top FA Kirk Cousins will sign with the No. 4 ranked Vikings – however established contenders such as the Patriots, Steelers, and Superbowl Champs the Eagles, are unlikely to pursue the top players with top salaries. While the sporting incentives are high, the financial limitations and restrictions make it unlikely that the best Free Agents will join the best teams. There are a few reasons for this:
Firstly, the best teams usually have better players than those available through Free Agency. They are the best because they already have the talent to win, and continue to do so by ensuring their best players never become free agents in the first place. See: Tom Brady, Antonio Brown, Fletcher Cox et. al.
The NFL Salary Cap is also a factor, as it regulates the total salary bill for each team meaning that each year the fifty three players on each squad can only be paid so much. In 2018 this will be approx. $177 million. Teams will always ensure that their own best players are signed first, ensuring quality, consistency and stability in the roster. This means, however, that Free Agency signings are more likely going to be low cost and unappealing to top free agents.
On the flip side, weaker teams are more likely to have less quality players and therefor more money to offer players. This presents the debate around the ‘Business’ side of the NFL and whether players should play for Superbowls or Supersized bank accounts. Players may decide that they can be the player to help a team become a contender – see Brock Osweiller to the Texans or Ndamukong Suh to the Dolphins – but that rarely pans out. Ultimately however there are only so many roster spots on any given team and players will ultimately want to play somewhere where they are wanted.
Best Players Get the Most Money (Kinda)
Supply and Demand is one of the basic tenets of Economics, and is never proven more true than during NFL Free Agency. Every year we see players ‘Set the Market’, meaning that what they get paid establishes a precedent for what their peers can expect to be paid both this year and in the future. So when a backup Quarterback gets paid $16 million to start for a team, more decorated QBs will demand $25 million plus. This year it looks like the top options at O-Line, Wide Receiver and Cornerback will earn $12-$15 million meaning this will now be the baseline for any player of reasonable talent. Reasonable Talent is not The Best Talent, however in Free Agency it is often The Best Talent Available and therefore command premium prices. As mentioned above, the best players often do not reach free agency as their teams do everything they can to keep them. The more in demand a player is, the more likely an interested team is to offer more money than expected in order to land their target.
As a result, players who are not regarded anywhere near the best at their position sometimes become the best paid. Kirk Cousins and Jimmy Garoppolo are now the two best paid players in the NFL. They combine for a playoff record of one game, one defeat, and will earn nearly $65 million between them in 2018. For context, Tom Brady, Aaron Rodgers and Ben Roethlisberger will earn around the same amount combined, and have eight Superbowl victories between them.
Despite this abnormality, Rodgers is expected to become the highest paid player when his contract is renewed and other elite players point to these bloated contracts to ensure their own pay-days when the time comes and they become the highest paid player. This only lasts however until the next guy is available.
Guaranteed to Pay Off?
Without doubt, the most confusing part of Free Agency is the numbers. The millions of dollars players are paid, or are supposed to be paid. Because there are catches, lots of them.
The NFL is the only major league sport in the world where player contracts are not fully guaranteed, meaning that teams can prematurely terminate a player’s contract without having to meet the full financial commitment of the deal. As a result, teams will often cut/sack players to make financial savings, or when the player is not performing well, or after a player gets injured and cannot play for a longer period of time. Or when a player is playing on a non-guaranteed contract, the team can essentially force them to agree to a lesser contract or get cut for nothing. This has helped to create a cut-throat culture that fuels the intensity and desperation at which the game is often played.
Conditional payments like Signing Bonuses, Roster Bonuses, Performance Bonuses all serve to simultaneously give teams and players an opportunity to make the most of a contract, and also to make it appear more valuable to fans. Ultimately though if the money isn’t guaranteed, it likely won’t be paid before a contract is renegotiated or cut. To counter this, players negotiate guaranteed amounts in their contract which they will receive irrespective of their status on a roster. This is the best way to look at NFL contracts to determine their value. So if a player signs a four year contract for $60 million with $40 million guaranteed, what looks like a $15 million/year deal is actually a $10 million/year deal. If only three years are guaranteed then it works out more like $13 million/year.
2018 Free Agency however threatens to bring about a new era of contracts, as Kirk Cousins is expected to sign one of the first ever fully guaranteed contracts. Though shorter in length, it gives him security and control of his future which are premium assets to an NFL player. If that trend continues, we could see a very different NFL landscape in a very short space of time.