The salary cap permeates practically everything NFL teams do from a roster construction standpoint. Teams that have the best grasp on how to navigate the salary cap without making major mistakes on player contracts can set themselves up for some period of sustained success.
Former longtime Eagles president and Browns CEO Joe Banner was ahead of the game in these areas during his tenure in Philadelphia. He recognized early in the salary cap era, which began in 1994, a good approach for the existing NFL system. Emphasis was placed on building through the NFL Draft, signing key young players to cap-friendly contract extensions before they could hit the open market and using free agency to fill holes in the roster.
Contracts were structured in a manner advantageous to the Eagles. Signing bonuses, which were initially the predominant form of guaranteed money in deals, were limited since it is prorated or spread out evenly over the life of a contract for a maximum of five years under the salary cap. A big signing bonus can make it difficult for a team to cut a player because the proration accelerates into a team's current salary cap, depending on the timing of the release. Banner opted for roster bonuses in the first year or a large increase in the current year's base salary in extensions in lieu of signing bonus due to the lack of proration with these items. This gave Philadelphia more roster flexibility than most other teams.
The methods worked. Although there weren't any championships won, the Eagles went to five NFC Championship Games and one Super Bowl in an eight year span during the 2000s.
I have identified five NFL teams that do a good job with player contracts and the salary cap. There isn't one specific right or wrong way to manage the salary cap and negotiate player contracts. One thing I do consider as less than ideal is taking a credit card approach to the salary cap by constantly restructuring contracts to push current obligations into the future. It's more sustainable provided the salary cap keeps up the recent growth rate of six to eight percent each year. The Cowboys, Saints and Steelers historically have subscribed to this philosophy.
It often seems like head coach Bill Belichick, who is essentially New England's general manager without formally having the title, is playing chess while the rest of the NFL is playing checkers. The Patriot Way has become synonymous with players buying into Belichick's coaching, the team concept and his philosophy of accountability.
The Patriot Way has another meaning, particularly to the agent community. Under Belichick, New England has operated as if it is better to get rid of a player a year too early rather than a year too late, whether it's because of salary, performance or age. It's a rather clinical or dispassionate but extremely effective manner of managing the roster. This approach dates back to early in Belichick's New England tenure, when four-time Pro Bowl safety Lawyer Milloy was released a few days before the start of the 2003 regular season because he refused to take a pay cut. Losing Milloy didn't prevent the Patriots from winning the Super Bowl that season.
The Patriot Way was never more evident than in 2016, when the New England won its fifth Super Bowl in franchise history. The Patriots didn't miss a beat after jettisoning arguably their best two defensive players from the 2015 season. Chandler Jones was shipped to the Cardinals in an offseason trade because New England was never going to pay him the going rate for productive pass rushers, which at the time was in the $16 to $17 million per year neighborhood with over $50 million in guarantees, once his contract expired after the season. Linebacker Jamie Collins turning down an $11 million per year extension during training camp was an impetus for dealing him to the Browns as that season's trading deadline approached.
The only player seemingly immune to The Patriot Way is 41 year old quarterback Tom Brady, who is arguably the greatest NFL player of all-time. Brady started consistently giving the Patriots hometown discounts in 2013, when he first renegotiated the 2010 contract extension which made the NFL's highest paid player at $18 million per year, instead of driving the market. The discounted deals allow the Patriots to assemble a more talented roster than otherwise possible. Brady leaving money on the table is paying dividends. New England has won three more Super Bowl rings since Brady started this process.
How Brady does business is used against other players in contract negotiations, in which director of player personnel Nick Caserio is involved. Caserio is Belichick's trusted lieutenant. Players who are accepting have a much better chance of signing a second or third Patriots contract. For example, right guard Shaq Mason sold himself short by signing a five-year, $45 million extension (worth a maximum of $50 million with incentives) last preseason. The 2015 fourth-round pick probably would have been the most coveted interior offensive lineman in free agency had he played out his rookie contract, given the explosion in offensive guard salaries over the last couple of years. It's conceivable Mason could have become the fourth unrestricted free agent guard in as many years to set the market by eclipsing the six-year, $84 million extension ($14 million per year average) containing $40 million in guarantees Zack Martin received from the Cowboys last offseason.
The Patriots are rarely big participants in the first wave of free agency when it's a seller's market, whether with outsiders or in the retention of their own players. That's why signing cornerback Stephon Gilmore to a five-year, $65 million contract as a free agent in 2017 was surprising.
A run was made at keeping left tackle Nate Solder in 2018 free agency, but New England wasn't willing to outbid the Texans or Giants, who ultimately made him the NFL's highest-paid offensive lineman. The Patriots turned to the trade market to find Solder's replacement, Trent Brown, who was entering the final year of his rookie contract. He was acquired from the 49ers for what was essentially a mid-fourth round pick during the 2018 NFL draft. Brown turned his one-year stint with New England into a free-agent contract with the Raiders, where he became the league's highest-paid offensive lineman.
New England uses the trade market more extensively than most teams. It's a cost effective way to rebuild the roster, especially when there are major losses in free agency. Defensive end Michael Bennett and a 2020 seventh-round pick were obtained from the Eagles for a 2020 fifth-round pick when it became evident that Trey Flowers, the Patriots' best pass rusher, was going to price himself out of New England in free agency. In a trade, the acquiring team assumes the remainder of a player's contract. Any bonus proration in the deal is the responsibility of the original signing team. It doesn't become a responsibility of the new team. This affords the Patriots optimal roster flexibility because a player can be released without any adverse cap consequences as long as there isn't any guaranteed money left in the deal.
Executive vice-president of football operations Howie Roseman turned the Eagles into Super Bowl champions for the first time in franchise history in two short years after regaining control of football operations with two games left in the 2015 regular season, following the failed experiment with former head coach Chip Kelly calling the shots. He largely reinstituted the principles used while he was working under Banner in the early 2000s, when first hired to help manage the salary cap.
Roseman quickly signed tight end Zach Ertz, safety Malcolm Jenkins and offensive tackle Lane Johnson to early offseason extensions. He found takers for Kelly's free agent signing mistakes of 2015 -- cornerback Byron Maxwell and running back DeMarco Murray. The remaining five years of Maxwell's six-year, $63 million contract with $25 million fully guaranteed, linebacker Kiko Alonso and the 13th pick in the 2016 draft were sent to Dolphins for the eighth overall pick of the draft. Murray, who signed a five-year, $40 million contract (with $21 million in guarantees and worth a maximum of $42 million through salary escalators) was traded to the Titans in an exchange of 2016 fourth-round picks.
Roseman parlayed the eighth pick he received from Miami into a blockbuster trade with the Browns for the draft's second overall pick, which was used to take quarterback Carson Wentz. Trading Sam Bradford to the Vikings for a 2017 first-round pick and a 2018 fourth-round pick at the end of the preseason after Teddy Bridgewater had a career-threatening knee injury paved the way for Wentz to start as a rookie.
Roseman took advantage of the roster flexibility that a potential franchise quarterback on a rookie contract can provide by making Nick Foles one of the highest paid backup passers. It was money well spent because of Wentz being lost late in 2017 season with a serious injury to his left knee. Foles earned Super Bowl LII MVP honors by outdueling Brady in a Philadelphia victory.
The Eagles kept Foles as insurance in case Wentz had a slow recovery from the knee injury rather than dealing him during that offseason, when his trade value was at its peak. He was given a substantial raise for last year, when the Eagles had an option for an additional year in 2019 that Foles could void, which he did by paying $2 million. Structuring Foles' contract with a buyout, which is a rarity in NFL contracts, gave the Eagles an extra $2 million in cap room.
Roseman differs from Banner in a couple of significant ways. He has been one of the most active NFL front office executives in the trade market over the last couple of years, particularly around the trading deadline. Running back Jay Ajayi was acquired from the Dolphins in 2017 for a 2018 fourth-round pick after falling out favor in Miami. A 2019 third-round pick was given to the Lions for Golden Tate last year. Roseman is much more aggressive in managing the cap. Multiple contracts are restructured annually to create cap room. So far, restructures have been limited to players who seemingly fit into their long-range plans.
San Francisco 49ers
John Lynch is in his third year as general manager. The salary cap and contracts are the domain of executive vice-president of football operations Paraag Maranthe and director of football administration & analytics Brian Hampton.
San Francisco's most lucrative veteran contracts historically have had a team-friendly structure. The guarantees after the first contract year are injury guarantees, which typically become fully guaranteed on April 1 of each specific contract year. San Francisco's guaranteed vesting date is the latest in the NFL. With most teams, the guarantee vesting date is in March, during the first few days of the new league year.
The 49ers' biggest offseason signings have lower risk because of these contract principles. For example, Kwon Alexander signed a four-year deal averaging $13.5 million per year, which is near the top of the inside linebacker market. The 49ers are protected in case Alexander doesn't bounce back from last season's ACL tear. Unlike most contracts of this size, the first two years aren't fully guaranteed at signing. The 49ers can get out of the deal next year with minor cap consequences because Alexander received only a $4 million signing bonus and his $11.25 million 2020 base salary, which is guaranteed for injury, doesn't become fully guaranteed until that April 1. San Francisco would have only a $3 million cap charge in 2020 if a healthy Alexander were released next offseason before April 1.
Large annual game day active roster bonuses are also standard with 49ers veteran contracts. The primary benefit of the roster bonuses is they provide the 49ers some financial relief with injuries. The per game amount is payable only if the player is on the 46-man active roster for that particular game. For example, Colin Kaepernick's 2014 extension had $2 million worth of roster bonuses annually. When Kaepernick was put on injured reserve after nine games in 2015, it cost him $875,000 because he didn't earn seven games worth of the roster bonuses.
The 49ers convinced cornerback Richard Sherman, who was acting as his own agent, to sign a three-year deal in 2018 after being released by the Seahawks that was unusually team friendly even by San Francisco standards. Sherman has $4 million annually in difficult-to-achieve incentives. None were earned last season. The consensus industry opinion is the 49ers got a much better end of the bargain than would have been possible if Sherman had representation.
The 49ers took a calculated risk with the five-year, $137.5 million contract given to quarterback Jimmy Garoppolo in February 2018. All it took was five impressive starts after a 2017 midseason trade from the Patriots for Garoppolo to briefly become the NFL's highest-paid player at $27.5 million per year. The 49ers did something unique with Garoppolo's contract because of an abundance of cap room. The deal was structured with an unusually large $37 million 2018 cap number (the first year), which is almost 35 percent more than Garoppolo's average yearly salary. Garoppolo's remaining cap numbers are more manageable than in the typical high-end contract. The 49ers should be able to better build a strong roster around Garoppolo thanks to this decision.
Executive vice president of football operations Rob Brzezinski has been managing the salary cap and negotiating contracts so long in Minnesota that I dealt him as an agent on linebacker Ed McDaniel and Hall of Fame defensive tackle John Randle's contracts. With the exception of quarterback Kirk Cousins, who has a fully guaranteed three-year contract, Brzezinski structures veteran deals where only the first year is fully guaranteed at signing.
The guarantees in the second and/or third year convert from being guaranteed for injury to fully guaranteed on the third day of that particular league year (mid-March). Since the deals have relatively modest signing bonuses, Brzezinski can get out of the deals at almost any time without much cap pain. Brzezinski has stayed away from playing the contract restructure game in recent years until needing to do so with linebacker Eric Kendricks' contract a couple of weeks ago.
One contract where Brzezinski is getting tremendous value is Danielle Hunter's. He signed a five-year, $72 million extension with $40.007 million of guarantees last offseason. Hunter would have been facing a 2019 franchise tag for $17.128 million by merely duplicating his 2017 performance, which he easily exceeded in 2018. He tied for fourth in the NFL with 14.5 sacks. Since Hunter had a career year while playing out his contract, he would have been in a position to leverage the franchise tag into a long-term deal averaging in excess of $20 million per year like Frank Clark did. Clark signed a five-year, $104 million contract with $62.305 million in guarantees where $43.805 million was fully guaranteed at signing in connection with his pre-draft trade from the Seahawks to the Chiefs.
Hunter's deal, which contains $1 million in annual base salary escalators for sacks, is already outdated. To make matters worse, Hunter's contract runs through the 2023 season.
Executive vice president/director of football operations Russ Ball is responsible for Green Bay's vanilla contract structure with veteran players. The only guaranteed money in Packers contracts is a signing bonus. The lone exception is quarterback Aaron Rodgers, whose deals have conventional contract guarantees. The bigger deals contain a third or fifth day of the league year roster bonus in the second and third years. The roster bonuses are supposed to be substitutes for additional contract guarantees. The overall guarantees in Green Bay contracts are usually less than comparable deals on other teams.
Per game 46-man active roster bonuses are a requirement in nearly all of Green Bay's lucrative veteran contracts. Rodgers doesn't have these roster bonuses in his current contract. His previous extension had $600,000 annually. Rodgers' broken collarbone in 2017 cost him $337,500 because he didn't earn nine games worth of the roster bonuses. The collarbone injury limited Rodgers to seven games that season.
Second-year general manager Brian Gutekunst's methods of roster building don't resemble Ted Thompson's, his predecessor. Thompson almost strictly preferred a draft-and-develop approach while making limited use of free agency.
Gutekunst has been much more aggressive in free agency than Thompson ever was. The longstanding policy of structuring veteran contracts where a signing bonus is the only form of true guaranteed money wasn't an impediment in free agency. Gutekunst has revamped the defense through the open market. Outside linebackers Za'Darius and Preston Smith were signed to four-year deals --worth $66 million and $52 million, respectively -- to provide a pass rush. Safety Adrian Amos received a four-year, $37 million contract to stay in the NFC North, migrating from the Bears.
The Steelers structure contracts the same way as the Packers. The difference being Green Bay doesn't routinely convert money to a signing bonus to create space, which is coming back to haunt Pittsburgh with wide receiver Antonio Brown. The Steelers have a $21.12 million cap charge this year after trading Brown to the Raiders. The $21.12 million is signing bonus proration relating to the $19 million signing bonus originally in Brown's 2017 extension and the $12.96 million signing bonus from last year's restructure.
Almost: Indianapolis Colts, Seattle Seahawks