Andrew Luck just became the NFL's highest-paid player after signing a five-year, $122.97 million contract extension with the Colts. You probably heard about that. Like all new deals of this magnitude, the market has been altered and how it impacts other quarterbacks on the hunt for a deal is worth examining.
But first, let's get the proper context on Luck's new terms. Luck's contract with the Colts -- which includes the final year of his rookie deal -- is now six years as it runs through the 2021 season for a total of $139.125 million. Characterizing Luck's deal as averaging $23,187,500 over those six years would be misleading. That's because the contracts of other quarterbacks who also signed extensions at the top of the market aren't being valued the same way. In most media reports, Joe Flacco, Aaron Rodgers, Russell Wilson and Cam Newton are among the quarterbacks whose deals are expressed in "new money," which is how professionals within the industry (agents and team negotiators) typically value deals.
New money is the amount of compensation in a contract excluding what a player was scheduled to make before receiving a new deal. For example, Wilson had one year remaining on his rookie contract with a $1.542 million salary when he received his new deal last July. Although he signed a five-year contract for $89.142 million, it is considered as a four-year, $87.6 million extension with a new-money average of $21.9 million per year among industry professionals. Wilson's remaining 2015 contract year for $1.542 million was subtracted from the $89.142 million five-year total to arrive at this number. Luck's extension or new money average is $24.594 million per year.
That's a key number agents will focus on.
Luck's deal also raises the bar in most key contract metrics. In addition to Luck's $24.594 million average yearly salary being an 11.1 percent increase over the previous standard of $22,133,333 per year set by the Flacco deal, Luck's contract establishes new benchmarks in overall contract guarantees, money fully guaranteed within 12 months of signing, three-year cash flow and first-three-new-years compensation with $87 million, $60 million, $75 million and $79.97 million respectively.
Luck didn't advance the ball in the important metric of money fully guaranteed at signing. His $47 million tops Rodgers' quarterback best of $44.5 million but falls well short of Dolphins defensive tackle Ndamukong Suh's $59.955 million fully guaranteed at signing. Luck's $3 million fifth day of the 2017 league year roster bonus is included in the $47 million because it is guaranteed of skill and injury at signing and becomes fully guaranteed Friday.
Get all that? It's a lot. But here's what it means for the agents community.
It is generally accepted that the top contracts are negotiated to be surpassed. Although Luck's deal may not be eclipsed in the next couple of years, other quarterbacks in line for new contracts will benefit from its ripple effect. The agents of these quarterbacks will use Luck's contract to push the salaries of their clients to a higher level than would have been possible before his deal was in the market place. Most teams are hesitant to set the market at a position, but are more willing to sign players at slightly below existing salary standards.
Here's a look at the quarterbacks who could reap the benefit from Luck's new contract in the next couple of years.
Conventional wisdom suggested that the Saints would sign Brees to an extension before free agency started on March 9 to lower his league-high $30 million 2016 cap number since he is entering the final year of his five-year, $100 million contract. That deal signed in 2012 made him the NFL's first $20 million man and re-set the league's pay scale. A new deal would have given the Saints more flexibility to improve the team and its porous defense.
An agreement would have already been reached if Brees was willing to give the Saints some sort of hometown discount. Luck's deal gives Tom Condon, Brees' agent, more ammunition for a healthy increase over his existing deal. It will probably take making Brees the NFL's second-highest paid player, pushing him closer to Luck's $24.594 million average yearly salary than Flacco's $22,133,333 per year on a front-loaded deal with player friendly guarantees in order for him to sign an extension.
The Saints taking a wait-and-see approach at this late stage of the offseason, where the 37-year-old stays at his $30 million cap number may make more sense. But using a franchise tag on him in 2017 would be cost prohibitive as Brees' franchise tag number will be $43.09 million, which is based on 144 percent of his 2016 cap number.
Kirk Cousins is playing the 2016 season on a $19.953 million non-exclusive franchise tag unless a long-term deal is reached prior to the July 15 deadline for franchise players to sign multi-year contracts, which seems unlikely.
The 2012 fourth-round pick has more to gain than lose by playing under the franchise tag. Given there are more NFL teams than competent starting quarterbacks, Cousins could still be line for a contract similar to Sam Bradford's even with a slight regression or mediocre 2016 season.
Bradford remained with the Philadelphia Eagles on a two-year deal averaging $17.5 million per year, which has $22 million fully guaranteed. The Redskins could be forced to franchise Cousins again next year for $23,943,600 if he demonstrates he is an ascending player in 2016. This would put Cousins in position to command a long-term deal averaging a minimum of $24 million per year where he's in the same ballpark as Luck in other key contract metrics.
As crazy as it may sound, there is a plausible scenario where Stafford, who is under contract through the 2017 season, becomes the NFL's highest-paid player next offseason. Stafford hasn't consistently performed at the same level he did during his 2011 breakout season in which he threw for 5,038 yards and 41 touchdown passes.
There were rumblings that Stafford's days in Detroit could be numbered with the Lions beginning last season 0-5, which put head coach Jim Caldwell's job in jeopardy. Stafford had the best eight-game stretch of his career over the second half of the season after Jim Bob Cooter was promoted from quarterbacks coach to replace Joe Lombardi as offensive coordinator. The 28-year-old threw for 2,179 yards with 19 touchdowns and two interceptions while completing 70 percent of his passes on a 110.1 passer rating.
Stafford lost his security blanket, six-time Pro Bowl wide receiver Calvin Johnson, to a premature retirement. If Stafford thrives without Johnson, his agent, Condon, will drive an extremely hard bargain in any negotiations for an extension.
The Packers gave Rodgers a five-year, $110 million extension that made him the NFL's highest-paid player in 2013 when he had two years remaining on his contract. Adhering to this same timetable would put Rodgers in line for a new deal after the 2017 season when he is 34 years old.
The two-time league MVP is still widely regarded as the NFL's best quarterback despite a subpar 2015 season by his standards. Rodgers had his lowest completion percentage (60.7) and quarterback rating (92.7) since becoming a starter in 2008 while his favorite target, Jordy Nelson, was sidelined for the year with a torn ACL in his right knee. As long as 2015 is an anomaly for Rodgers, the Packers shouldn't have an issue putting him back at the top of the NFL's salary hierarchy on his next contract, presumably in 2018.
2014 Quarterback Draft Class
The 2014 draft class becomes eligible to sign extensions at the conclusion of the 2016 regular season on New Year's Day. Oakland Raiders' second-round pick Derek Carr could get the first new deal because 2017 is his contract year. First-round picks Blake Bortles and Teddy Bridgewater won't be in contract years until 2018 since they are subject to fifth year options.
Carr and Bortles showed more improvement from their rookie years than Bridgewater during their sophomore campaigns. Bridgewater is in more of a need of a breakout season than Carr and Bortles because of the Minnesota Vikings' run-oriented offense despite having more team success.
Carr developed instant rapport with his new wideouts, 2015 fourth overall pick Amari Cooper and free agent pick up Michael Crabtree last season. The connection is only going to get better with another year together. The Raiders getting to playoffs for the first time in 14 years with Carr continuing to progress will allow him to become one of the league's highest-paid players. It will be interesting to see what type of effect, if any, 2014 fifth overall pick Khalil Mack's future contract, which should make him the NFL's highest-paid non-quarterback, will have on Carr's deal.
Bortles set Jaguars single-season franchise records for touchdown passes (35), passing yards (4,428), pass attempts (606) and completions (355) in 2015. He was tied for second in the NFL in touchdown passes. Cutting down on a league-leading 18 interceptions is a part of the next step in Bortles' development.
The Jaguars are willing to pay productive players near the top of their respective markets. When Julius Thomas signed as an unrestricted free agent in 2015, he became the NFL's second highest-paid tight end with a five-year, $46 million contract containing $24 million in guarantees. Allen Hurns' recent four-year, $40.05 million extension (worth up to $44.05 million through salary escalators) makes him the NFL's highest-paid No. 2 wide receiver. This bodes well for Bortles potentially setting the market with his next contract.
