Deal and No Deal

In Philadelphia, the league’s highest-spending team goes all-in on Fletcher Cox. In Denver, Von Miller 's stalemate with the Broncos goes nowhere ... for now

While traveling and teaching last week in Italy—I know, I tried hard to endure—I noticed that, as the business of the NFL offseason closed for a month, one megadeal was completed while another devolved into positioning and posturing in the media, at least for the moment. The contrast of these two major negotiations is illustrative of the two teams involved and their different philosophies. Let’s examine.

Fly, Eagles, Fly

The Eagles, now under the direction of general manager Howie Roseman after his year of exile from Chip Kelly, have been the NFL’s most contractually active team this offseason. They have negotiated $280 million in guaranteed money—far and away the most in the league—and consummated more free-agent acquisitions and extensions in three months than most teams accomplish in three years. The spending has included three contracts for quarterbacks (for $46 million in 2016 cash alone), top-of-market additions at perennially low-value positions, guard and safety, and proactive extensions for existing core players such as Malcolm Jenkins, Brent Celek, Zach Ertz, Vinny Curry, Lane Johnson and Mychal Kendricks. And to finish the offseason of spending with a flourish, the Eagles paid their biggest ticket yet with Fletcher Cox.

Cox had one year left on his first-round rookie contract, although it never appeared he would play out that deal. The Eagles engaged Cox toward an extension early, but Cox’s camp was offering up contract numbers at aggressive free-agent prices rather than the discount expected a year away from free agency. Eventually, Cox’s bullish stance paid off. Soon after showing up for mandatory minicamp, the Eagles rewarded him by offering a contract with a total value north of $100 million (although as readers of this space know, that number is meaningless); the guarantees (eventually) surpass $60 million.

The top-of-market data point for guarantees for defensive linemen—and all non-quarterbacks—was set by Ndamokung Suh in free agency last year, with a stunning $60 million guaranteed at signing. Beyond outlier Suh, Olivier Vernon (another golden-ticket winner in free agency) received $40 million guaranteed at signing this year. In this category, Cox’s guarantee pales to those who were in a more leveraged bargaining situation. As the contract matures, however, Cox’s contract looks more robust.

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Assuming Cox plays two seasons—a strong assumption, although one never knows the future in the NFL—he will activate a healthy $55.5 million guaranteed, which includes the full third-year (2018) salary and half of the fourth-year (2019) salary. Further, if Cox is still on the roster 21 months from now, in March of 2018, he will trigger the other half of the fourth-year salary, bringing the guarantee to a whopping $63.3 million. And payment terms are player-friendly, with half of the guarantee tied to bonus, whether signing ($26 million) or option ($6 million).

Cox is also fortunate to have completed his contract prior to transitioning into new defensive coordinator Jim Schwartz’s system. Although he is expected to thrive, he is expected to operate as a defensive tackle (DT) rather than a defensive end (DE)—a move that could have had negative financial ramifications. Looking ahead to Franchise Tag possibilities next year, the DT Tag projects to roughly $13.5 million while the DE tag projects north of $17 million. Now Cox has a two-year cash flow (almost $34 million) more than back-to-back DT tags and almost an amount for consecutive DE tags.

As for the Eagles, while Cox secured a predictably strong deal, they maintained precedent and structure that all teams crave: no guaranteed money beyond the first two years of the contract which, of course, transfers all risk back to the player. Teams continue to allocate risk to the player after the “easy gives” of early guaranteed money, even for the best players, hiding behind an antiquated funding rule (teams must fund all future guarantees). Agents, anxious to “hit their numbers” (as well as sometimes succumbing to a player’s cash needs), readily accept these team-friendly structures. The Eagles just secured their best player without worry of a precedent of more than two years of guaranteed money.

The Eagles are all-in for the present (led by Sam Bradford) and the future (led by Carson Wentz). They were the highest-spending team in the league before the Cox signing, and have now zoomed way past the field. Their long-range financial plan, of course, is that when these large contracts start to mature they will have their most important player (Wentz) making the relatively cheap wage of around $6 million per year. That is the plan (for now) for the most contractually active team the NFL has seen in recent years.

Miller’s Moment

Like Joe Flacco a few years ago, Von Miller is a game-changing player at a premium position fresh off a Super Bowl MVP performance—with an expiring contract. Like Flacco’s situation, however, there is a catch. The Broncos, just like the Ravens did, wielded the powerful management weapon of the Franchise Tag to take the player off the market. Flacco’s time in limbo, however, was quite brief as the Ravens gave him a top-of-market deal. In stark contrast, Miller watches and waits as the Broncos play the game of Tag to their full advantage. While “true free agents” such as Olivier Vernon, Malik Jackson, Bruce Irvin and others were negotiating with multiple bidders in March, Miller has been able to negotiate—if indeed that is what it has been—with only with one team. And the Broncos have been obstinate on player contracts this offseason, with team president John Elway imposing his will on players and agents.

After allowing (encouraging?) Peyton Manning to retire and allowing Brock Osweiler to leave, the Broncos traded a ham sandwich for Mark Sanchez and gave thumbs-downs to potential starting quarterbacks Colin Kaepernick, Ryan Fitzpatrick and Sam Bradford. They have also discarded left tackle Ryan Clady to replace him with agent-less Russell Okung, who reached out to them rather than vice versa.

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In approaching Miller, they negotiated to a level at which they are comfortable—roughly $40 million in guarantees with team-friendly structure, according to reports—and now wait for the July 15 deadline for franchise-tagged players to potentially sign more than one-year deals. At that point Miller can 1) accept a long-term deal with guarantees probably pushed slightly over the $40 million mark, or  2) play for the $14 million Tag amount for one year (or some one-year variation close to it) and see what happens next February. There are no other options (as to the rumors/suggestions that he would sit out the season, please.) Despite the appearance of enormous leverage, the reality of the Franchise Tag belies that facade.

Thus, my strong sense is that we will have a deal between Miller and the Broncos on July 14 or 15. Maybe the Broncos move on the guarantee or the structure of the second or third year. Maybe they raise the cash flow over the first three years. Or, assuming the Broncos’ offseason callousness continues, maybe they don’t. The Broncos played this script one year ago, completing a deal with Demaryius Thomas in the waning moments of Tag deadline day.

We are thus back, as we always are, to the CBA and the continuing power of the Tag. Despite high one-year earnings, players do not like it. It only affects a handful of players a year, but these are players who would otherwise be setting the market, not trying to get what they can out of their only bidder, their incumbent team. The team always has the leverage as the deadline approaches, knowing players would rather “get married” than be engaged for a year with an expiration date, even with a long-term deal that is more optimal for the team than the player.

Check back on or after July 15 to go over the details of the new contract for Von Miller with the Broncos.

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