Guest Post: Shlynch Takes The Cap Situation Forward

Last week, shlynch gave us a detailed look at the Eagles' current salary cap situation.  This week, he rolls the analysis forward to predict what might be coming.  The following is, in the best sense of the word, sick.  All 4,000 words of it. 

Please save your applause to the end.

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As a follow up to my prior post, I wanted to do what Derek described when we were discussing this stuff as “speculation from limited information.” In fact, the Eagles 2010-2011 salary cap outlook below was really his initial suggestion for a topic. I this post, I wanted to cover a few things: what the coming years will look like in terms of how salaries are governed; what the coming years will look like from an Eagles perspective, both in terms of who has commitments as well as whose commitments look shaky; and given all of that, who are candidates for extensions.

Predicting the Future of the CBA

The CBA expires after the 2010 season. According to the agreement in place, the cap expires a year earlier, following the 2009 season, making 2009 the Last Capped Year under the terms of the agreement. The 2010 season is called the Uncapped Year. There will be several notable rule changes that take place if the CBA is not extended prior to the 2010 season:

• There is no per-team salary cap. Obviously, hence the term “Uncapped Year."
• There is no per-team salary floor. This is the single most overplayed element of the current negotiations, as well as the Uncapped Year, in my opinion. I can’t find any team that has been within $5 million of the cap floor over the past several years anyway, which is as much history as I have. It is only an issue because of the elimination of the LTBE loophole – it is a piece of cake to use LTBEs and other structuring tools to get over the floor while actually spending less in cash. I just don’t believe that this is truly a significant issue; I think it is merely posturing. And in any case, isn’t the spending floor just as significant of a condition for revenue sharing anyway? If not more significant?
• The LTBE Loophole is eliminated. I explained this last time, but to recap, phony incentives can no longer be used to roll cap money from one year to the next.
• More restricted free agency. Players with 4 and 5 years of experience are no longer eligible for unrestricted free agency; they are now only eligible for restricted free agency.
• Final Eight plan. This is somewhat complicated, but suffice it to say that the eight teams that play in the divisional round of the playoffs can only sign free agents AFTER they lose one of their own.

Now, predicting the future: I think that both sides really want to keep the cap in place, and that they will reach an agreement. The NFL is a money machine, and nobody really wants a labor hiccup. So a new deal will be reached.

But even if that isn’t the case, and we actually hit the Uncapped Year, once a new CBA is reached – for the season after the 2010 season, which may be 2011 or later, depending on whether there is a work stoppage (I mean, seriously, like that is going to happen) – I will be willing to bet that there is a cap in place. It is the best way to control costs that professional sports leagues have hit upon yet, the only debate here is the appropriate level to put the cap at. So when we think about the Eagles’ salary structure going forward, it is important to remember that there will likely be a cap in place in 2011 regardless, and that minimizing cap hits out there while using up cap space in 2009 and “uncapped space” in 2010 will be very helpful.

Eagles’ Salary Outlook

Let’s assume for a moment that the players and the owners come to an agreement near the end of February, in time to keep the salary cap in place, but late enough that no money is eligible to be rolled forward from 2009 to 2010. We never enter the Uncapped Year, and all of the current free agency rules stay in place. How much do the Eagles currently have committed against the salary cap?

To answer this, I have to make a few assumptions:

1. I projected a 54 man roster (assuming that MJG winds up on PUP or IR) – the only real big assumption there is that Reggie Brown is let go during the 2009 season. I won’t post that list, but let’s face it, with the exception of a few positions, I think we can be pretty confident of most of the final roster.
2. I projected cap figures for the rookies for 2010 and 2011. These are guesses, but the fact is that there isn’t a lot of error in those guesses, because none of our picks should see exploding contracts like they get at the very top of the draft.
3. I assumed that Stewart Bradley and Brent Celek will reach the incentives in their rookie contracts that will cause their base salaries to escalate in 2010, and that Quintin Demps will do the same in 2011.
4. I assumed that we will tender three guys who would be restricted free agents in 2010 under the current system: Kyle Eckel, Akeem Jordan and Sav Rocca. Eckel and Rocca got the minimum tender, Jordan got a second round tender.

Having done this, I pulled together the expected cap hits in 2010 and 2011. These are in the table below.

As a second scenario, I assumed that the NFLPA and owners don’t reach an agreement, and we enter into the Uncapped Year in 2010 – note that my projection for 2011 would be unchanged, as I expect any new CBA to have a cap. The only real difference here is that guys with 4 or 5 years of NFL experience will be restricted free agents rather than unrestricted free agents. There are a lot of these guys on the Eagles: Leonard Weaver, Jason Avant, Hank Baskett, Nick Cole, Max Jean-Gilles, Chris Gocong, Omar Gaither and Ellis Hobbs. In the Uncapped scenario, I assumed that we tendered all of these guys in 2010. Avant, Gocong, MJG and Gaither get the low tender, where we get back a draft pick from the round they were originally selected in (with Avant, Gocong and Gaither getting slightly more than MJG because the floor for any tender is 110% of your previous base salary); Weaver, Baskett and Cole get second round tenders (with Baskett and Cole getting slightly more than the Weaver); and Hobbs gets a first round tender – tendered that highly because 110% of his 2009 base is higher than the first round tender level anyway.

Finally, I made up some cap numbers out of thin air. For 2010, I assumed that the cap was $125 million; for 2011 I assumed $128 million. These figures are arbitrary, though they are based on the fact that this year’s cap is $122 million before “CAM” adjustments that will expire this year, and I expect future cap growth to be slowed somewhat based on the economy. Obviously, the results of any renegotiation of the CBA will have a material effect on these levels.

Here are the results:

 

A few notes about all of this:

• That’s right, we currently project to have cap commitments to 41 players in 2010 that are higher than Sal Paolantonio thinks we have made in 2009 to our whole roster.
• There just isn’t a lot of wiggle room in 2010 for big extensions as things currently stand ... at least relative to the cap space we have seen in recent years. This underscores yet again the importance of using our cap space for extensions in 2009 while it still exists to help make sure that we have flexibility once the cap returns.
• 2011 has a big drop in cap commitments and in players under contract. Remember: we currently have zero QBs under contract for 2011 – and that position will surely use up a great deal of cap space – and Brian Westbrook’s contract will also come off of the books.
• The eight guys who are RFAs if 2010 is uncapped take a total of $12.3 million to retain just at their tender levels. Surely it would be more costly to retain all eight if they were unrestricted. Again, to the extent that we want to keep any of those eight, it will help to use 2009 cap space to help manage 2010 costs.
• Finally, whereas the Eagles made a bet heading into 2006 that there would not be an extension, they don’t seem to have bet heavily on either side here. Contrast that with the Patriots, who have 20 players who will be unrestricted free agents regardless of an extension and 6 who will be restricted under the Uncapped Year plan. My read of that is that they are hoping for a) the Final Eight plan to kick in; b) the chance to use the Uncapped Year to keep their best free agent players; and c) the chance to restrict their 4th and 5th year players, like Logan Mankins, Nick Kaczur and Stephen Gostkowski, without using franchise or transition tags. If the CBA is extended, and there isn’t a material reduction in league-wide cap space, the Patriots could be gutted after this year.

Phony contract years

One thing that the salary outlook above emphasized to me was the changing behavior of the team towards phony years. It used to be that you could rely on the Eagles to keep their players for the life of their deals. Guys like Troy Vincent, Bobby Taylor, Jermane Mayberry, Jon Runyan, Tra Thomas, and to date, Donovan McNabb and David Akers, have seen every penny of their long-term deals even when their play waned. In other places, veterans who can still play well are cut solely because their contracts are too high. It has been uncommon for the Eagles to do that. Sure, there have been trades of veterans, but the players kept their contracts.

In instances where the team has released veterans, it was often because their play warranted it: Blaine Bishop, Jevon Kearse, Jeremiah Trotter … all those guys had seriously declined. The one exception in recent years has been Takeo Spikes, who still was still a starting-caliber LB, but was no longer good enough to justify a $5 million salary.

However, I suspect all that is changing, or is about to. There are two players whose contracts in particular that begin to look unwieldy in 2010: Kevin Curtis and Darren Howard. Both players will enter the part of their contract that, in any other city, would have been termed “years they’ll never see” from the get-go. And as a result, the Eagles will have to make hard decisions about them as they head into 2010.

Here are Kevin Curtis’ cash outlays for 2009-2012:

 

Now, let’s think about what Kevin Curtis is expected to be going forward. He should be a good WR, a good #3 type player and a good enough player at the X WR spot if we need him there. But we should have Jeremy Maclin and DeSean Jackson as starters. Assuming health and that Maclin is ready to start in 2010, the question you have to ask is this: would the team rather have Curtis as their slot WR at $16.5 million over the next three years, or even “just” $9.5 million for the next two years, or would they rather have Jason Avant in the slot at whatever he will be willing to sign an extension for – presumably a lot less than $4.5 million-plus per season. Avant is going to be cheaper, though Kevin Curtis could be a somewhat better player. My point is this: if Jeremy Maclin delivers this season, Kevin Curtis may lose his job despite continuing to be a solid enough player.

The second guy I mentioned was Darren Howard. Here is how his contract works:

 

Again, here is a guy who they are going to have to make a decision to pay next year at $4.5 million in cash. If he has a 2009 season that reasonably approximates last year’s production, this is a non-issue, clearly. Paying $4.5 million for a guy who just picked up 10 sacks is a no-brainer. But if Darren Howard is merely ok – let’s say he goes back to his median sack production from 2003-2008 of 5 sacks – can you really justify paying him $4.5 million? As Derek has emphasized, somebody has to get pressure from the DT position on this team. We were fortunate to have that guy be Darren Howard this year, but if he shows even a little unreliability, he is a prime candidate to be replaced. Again, he would be solid, but not solid enough to justify the cash outlay, which may force the end of his Eagles career. And let’s face it, at that point, we will probably be talking about first round pick or premium free agent LDE-type players to fill the void (though officially, we’ll be “fine” with Victor Abiamiri taking over that role).

Note that if Curtis and Howard were both let go, that would free up $8.3 million of cap space in 2010, assuming that there is a cap at all. And it would free up $9 million of cash spending budgetary space regardless.

Candidates for Extensions

First, let’s be clear about who is NOT eligible for an extension. Players two years or less from their draft date, whether they were drafted or not, are not eligible to sign extensions. So, for example, 2008 picks like DeSean Jackson and Quintin Demps cannot be extended in 2009. This is a rule that went into place in the 2006 CBA extension, and covered the 2006 draft class onwards. Thus, the rules did not apply to Mike Patterson, Reggie Brown and Todd Herremans, all of whom were extended in 2006. That would not be permitted today.

So, who is eligible for extensions? Let me break it down by category:

2010 FAs with 4 or 5 years of experience. This group includes members of the 2006 draft class (Jason Avant, Hank Baskett, Nick Cole, Chris Gocong and Omar Gaither) and it also includes Leonard Weaver and Ellis Hobbs.

The likelihood of this group accepting an extension is heavily impacted by the Uncapped Year. These guys don’t know for sure if they are going to be unrestricted or restricted, and what their extension is worth will depend in part on how much bargaining power they have. In fact, I seem to remember Joe Banner citing this uncertainty as one of the reasons that he didn’t get any extensions done with this group last year – the team and the players had a different opinion on what the CBA outcome would be and thus how big the extension should be.

I wouldn’t expect that uncertainty to be resolved any time soon. Given that the players in this group are all more "support" players, rather than key members of the team, I’d think that the Eagles will be happy to let them all wait until the CBA situation is more certain before signing them.

Even without the uncertainty, these guys are a tough group to extend. I could see Gocong believing he’d have more value to a team playing a 3-4 [Ed. note:  And this would be true in a world in which he could rush the quarterback] . Gaither doesn’t seem all that interested in being the next Ike Reese. And Baskett may be the 5th best WR on the roster this year – not the guy you necessarily want to lock in long term.

The exception may be guys like Cole or Avant, guys who probably won’t be viewed as starters on the open market anyway but are valuable backups here. Those guys might wind up with moderately priced extensions – and in the case of Avant, far more moderately priced than the veteran alternative currently on the roster.

2010 FAs with 6 or more years of experience. Short list here: Dan Klecko, Tracy White, Sean Jones and Rashad Baker. To be honest, it would not be a surprise if any of these guys, even Jones, didn’t make the roster, and none of them warrant an extension. Jones could play his way into one, but even then, he will probably want to go back on the market to cash in. No candidates worth looking at here.

2010 FAs with 3 years of experience. Now we start getting to an interesting group. These guys include Akeem Jordan, Saverio Rocca, Kyle Eckel and Tank Daniels. Jordan is a guy who could warrant an extension, and the rules about his free agent status are far more clear. In fact, he seems like the most classic extension candidate on this team: young, raw, likely to improve, and eager to be accepted by the front office. If he doesn’t screw it up in training camp, I think he is the surest bet to collect some of the expiring cap space on the team. Rocca is new to the NFL, but not the planet, and early signs from his new coordinator, Ted Daisher, are not overly favorable. I’d be surprised if he were a candidate. Neither Eckel nor Daniels are especially likely to make the team, let alone get extended.

2011 FAs. This group includes Donovan McNabb, Kevin Kolb, AJ Feeley, Brian Westbrook, Quintin Mikell, David Akers, Stewart Bradley, Brent Celek and Victor Abiamiri. Yikes, what a group.

Start with the QBs. It has been my opinion that the Eagles need to make a move this year. By 2010, one of the QBs – the one they want to start – will have a lot more leverage. The last thing they want is to have to overpay McNabb or Kolb to avoid having Feeley be the only QB willing to resign with them. So I think they have to commit as soon as they can. Surely they will want to wait to see how Kolb does in preseason, will wait to see how the season plays out and make sure they are confident in the decision they make. But it will be a lot easier to use up 2009 cap space if they get a deal done before the first game of the regular season than it will be after, and they have a hard deadline to increase base salaries in November, so that will be the key date to keep in mind.

Mikell and Akers are still good players for this team … but they will be 30 and 36 respectively during the 2010 season. That is an age when you sign short term deals after the old deal expires. They aren’t really extension candidates on this team. Westbrook’s deal is so complex and rife with guaranteed money that there is no way they could extend it even if they wanted to.

The young guys are really the most likely candidates on the list. Stewart Bradley has to be their top priority. He will want a lot … and is probably worth it. This seems like a no-brainer. Celek could establish himself as a solid starter, and even if Ingram develops into the player we all thought LJ Smith could develop into eventually, there is a role for him. This seems like another no-brainer. Abiamiri is going to be a tough call. He hasn’t done anything yet worth extending. Odds are, he isn’t on the list.

Others. Other potential candidates for extension worth discussing include Brodrick Bunkley, Sheldon Brown and Shawn Andrews. Of these guys, the only real candidate is Bunkley. It isn’t a question of whether he is worth it, I don’t think, but whether he would be willing to sign an extension that wouldn’t kick in until 2012 and would surely lock him up until the latter part of the next decade. Given the Sheldon Brown fallout, I doubt it.  [Ed. note:  I think I actually disagree here.  Bunk seems to have some nice incentives in his contract, but playing three more years under his rookie deal when he could cash in significantly right now doesn't seem like the best business decision.] 

Speaking of Brown, I would have had him as a serious candidate 3 months ago – give him a roster bonus to use up cap space, potentially lower his future cap (and cash) hits as he ages and show the team that being a team player pays off. But the team clearly wasn’t thinking on these lines, Brown poked the bear, and this is no longer a realistic possibility.

Finally, Andrews has long been rumored to be seeking a new deal. But he knows, and the FO knows, that there is no way he can really ask for anything unless he shows that he is 100% after the back injury and the depression incident. At a minimum, he needs to excel this season (and at tackle) to really have any leverage. He is not a realistic candidate.

As a result, I see the Eagles’ extension efforts focusing on three players: Stewart Bradley, Akeem Jordan and Brent Celek. I also expect them to be focused on extending one of their QBs, and potentially Jason Avant and Nick Cole. But is that enough to use up the approximately $14 million of cap space that they have available for extensions? Let’s look at what it might take to get Stewart Bradley done.

Extending Stewart Bradley: A Hypothetical Exercise

First, let’s find comparable extensions to Stewart Bradley.

• In March 2008, Lofa Tutupu agreed to a 6 year, $40 million contract extension. Those 6 years didn’t start until 2010, because Tatupu still had two years remaining on his rookie deal, much like Bradley does now. Tatupu got $18 million guaranteed.
• Staying with the Seahawks, Leroy Hill signed for 6 years and $36 million last month. He had $15.5 million guaranteed. He had been the Seahawks’ franchise player, but was released from that tag after the team drafted Aaron Curry.  

That’s probably not the complete universe of potential comparable players, but they are closest to Bradley’s current situation. There are a number of good LBs in the draft class of 2006, headlined by DeMeco Ryans, but they haven’t signed contract extensions yet. Theoretically, they could move the market.

Let’s assume for now that Bradley’s contract looks like Tatupu’s, since while Tatupu was more accomplished at the point of his extension, it has also been a year since it was signed and there has been some contract inflation in the interim. Also assume that the Eagles only extend Bradley for 5 years, which would take him through his 32nd birthday. So at about $7 million per year, that would make Bradley’s extension a 5-year, $35 million deal. Including the money left on his rookie deal, assuming that his contract escalator in the last year is reached, is $37.474 million.

Assume that no future year can be less than 50% of the 2009 cap hit – which is approximately true. That would mean that the maximum cap hit in 2009 is about $9.4 million, or an increase of about $8.7 million. Now the reality is that the Eagles (and Bradley himself) probably don’t want to do a deal with that structure – it would guarantee a Sheldon Brown situation at the end, because so much of the payments would be stuffed into the front end. The team and player would probably lower the front end and increase the back end.

So let’s look again at the question: could they use all $14 million on Bradley, Jordan and Celek? Almost certainly not. The only way to eat up all that money is to extend one of the QBs as well.

By the way, some of you might also question whether the Eagles would commit that kind of money to a LB.  Obviously we’d have to see it happen to know for sure, but the Eagles do value difference makers at positions they don’t value very highly. Remember that safety is also not valued especially highly by the team, but they were able to design the defense around Brian Dawkins and paid him enough to keep him for 13 years. They also gave Trotter a pretty good deal his second time around. Again, we can’t know for sure, but I suspect that they would see Bradley differently than they see most LBs.  [Final ed. note:  Is Bradley a "difference maker," or just "really good"?  And how soon will they know that?]