Inside Russell Wilson’s Deal
A deadline—real or perceived—spurred the action that ended the most intriguing contract negotiation of the 2015 offseason, as the Seahawks secured Russell Wilson for four additional years beyond this season (for which he was already under contract). After months of stop and start negotiations that seemed destined for a dead end, the deadline of training camp produced some common ground (imagine that).
As I wrote last month, the question to me was always whether Wilson and agent Mark Rodgers would resist the temptation to jump at a cash number for 2015 that would dwarf the scheduled $1.5 million, while terms beyond this year would necessarily be to the team’s advantage. With the number reaching $31.7 million he jumped; and yes, the rest of the contract is structured just as the Seahawks wanted. However, although the risk shifts to Wilson after this year, the Seahawks’ future salary cap limitations will force them to come to Wilson again and again for cap help, giving him some power in the relationship.
Here are my thoughts on the positives of the deal for each side.
Wins for Wilson
1. With Wilson’s existing $1.5 million salary, this contract was never going to compare favorably with deals for other quarterbacks who signed extensions while scheduled to earn far more in their contract year. The flip side of that low starting point, though, is that Wilson’s “new money” is strong. As an example, while Cam Newton’s recent extension calls for $67 million over the first three years compared to Wilson’s $57 million, his starting point was $14.67 million (compared to Wilson’s $1.5 million), giving Wilson the advantage in new money. We will soon see extensions for players such as Eli Manning and Philip Rivers zoom past Wilson in terms of overall value, but their starting point will be much higher.
2. The $31 million bonus is a major commitment from the Seahawks, on par with recent bonuses for players such as Drew Brees ($37 million), Tom Brady ($30 million) and Joe Flacco ($29 million), who were all due double-digit millions pre-extension. I expected the Seahawks to put around $25 million in front of Wilson to get the deal done (their bonus offer was $18 million a few days before the deadline); the $31 million bonus is a nice win for the player.
3. Wilson was able to avoid a sixth year on the contract—a fifth extension year—giving him another bite at the free agency apple a year earlier when his value should be many times more than it is now. With continued performance as he has had, the Seahawks should be approaching him on a new contract in three years.
4. While the Seahawks preserved short-term cap flexibility with a structure heavy in proratable signing bonus ($31 million) and light in salary ($700,000), they have created problems in the long-term. Wilson’s cap hit will now jump over $11 million from this year to next year alone, about the same number many are projecting for the rise of the overall team cap. This gives him some leverage as the team will certainly come to him in February, and future Februarys, to restructure for more cap room.
5. Wilson’s is a rare NFL contract with guaranteed money ($4.9 million, assuming he is on the roster) into the fourth year of his contract. Many veteran deals guarantee the first two years, some guarantee into the third but only a handful have any guaranteed money into the fourth year. As an example, Darrelle Revis, celebrated as having success contractually and having free agent leverage in March, has no guaranteed money past the third year of his deal.
6. One more note I’ve learned about the Wilson contract: There is no “Jameis” language; not a single word prohibiting Wilson from playing baseball. So just in case it ever looks like football isn’t going to work out for him…
Wins for the Seahawks
1. They were never going to get Wilson signed at this price again... ever. Yes, there is risk of injury or downturn in performance, but what is the likelihood of that? If this deal got to next year and the Seahawks applied a $20 million-plus franchise tag, that negotiation would not resemble this one. The most important number in this negotiation was $1.5 million, the existing salary for Wilson pre-extension. The leverage of an undervalued rookie contract saved them tens of millions.
2. Despite being owned by one of the richest men in the world, the Seahawks successfully resisted fully guaranteeing any money beyond the signing bonus, maintaining a team-friendly “stair-step” guarantee structure that, at this moment, has only injury guarantees past this season. They can now enter any future negotiation telling the agent and player that Wilson has this structure, end of discussion.
3. As to the lack of full guarantees past this season, yes, the chances of the team moving on from Wilson next year are minuscule. However, contract negotiations are about allocation of risk, at all levels, and the Seahawks have allocated the risk of the latter four years of this deal, whatever level of risk that is, to Wilson.
4. The structure of maximizing cap room in the present has already paid off for the Seahawks, as they were able to bring Bobby Wagner under contract with their remaining cap space. However, cap-friendly now = cap-unfriendly later. As noted above, most or all of the Seahawks’ team cap increase for 2016 just got used up. However, the team now has a happy quarterback who seems willing to help them move cap room around when they inevitably come to him in the spring.
5. Wilson is the face of the franchise and presents as everything that management wants, on and off the field. Contract instability would have clouded the season for the Seahawks. Of course, they knew that and responded accordingly when they had to: at the deadline.
I must admit that secretly, as an analyst on the business of football, I did not want this deal to happen. It would have been a much more interesting negotiation with a starting point of a $20 million-plus Franchise Tag next year, a stage set for a groundbreaking contract in terms of overall value and (full) guarantee. Ultimately, contract negotiations are not about “how good” a player is; they are about where a player is contractually at the time of negotiation and the leverage points for each side. Alas, my lonely eyes turn to Andrew Luck for that game-changing deal.
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