The Cost of a Quarterback

The NFL offseason officially starts tomorrow, but it’s already been a very busy year. The past month has seen more activity with player movement that I can honestly recall from any offseason, with seemingly each day bringing a new shocking trade of a big name player. Beginning with Alex Smith and working up to Cleveland’s frenzy over the past week, trades are suddenly all the rage.

The NFL is notoriously averse to trades, especially compared to other professional sports leagues. The most exciting deals we usually see are simply swaps of mediocre players for midround draft picks, the sort of deals you usually forget until you notice that a player you rarely think about has switched teams. The events of the past month are highly unusual, and it’s raised plenty of eyebrows from people wondering why the sudden frenzy of activity.

There are all sorts of reasons for teams to make trades, but they can all be summed up pretty simplistically. A trade happens when two teams value each other’s assets more than they value their own. There are all sorts of reasons why this could happen. Poor schematic fits, different windows for competition, varying needs on the depth chart. These are the reasons most trades have happened in the past, but they don’t explain why this offseason has seen such a breakout.

The sudden explosion in the trading market is due to a new source of value inequity, one that dates back to the lockout that happened prior to the 2011 season. There were a lot of factors that went into this labor negotiation, but probably the most significant consequence was the institution of a rookie wage scale. Prior to 2011 rookies were able to negotiate any contract they wished, and the teams that drafted them had no choice but to pay up or risk the player entering the following season’s draft again.

This negotiating leverage led to some extremely undesirable results, from the perspectives of both the owners and the players. The owners didn’t like having to shell out $68 million to JaMarcus Russell and then watch that investment go to waste, and the veteran players didn’t like seeing draft picks like Eric Berry become the highest paid player at his position without playing a single snap. So the new collective bargaining agreement instituted a rigid scale around rookie salaries, reducing the risk to owners and (theoretically) freeing up more money for veterans.

(Of course the people who got screwed in this deal were the college players who suddenly saw their first contracts drop by up to 75%, but they had no leverage and no spot at the negotiating table. They’re just lucky the NCAA makes sure they’re fairly compensated.)

These were the reasons behind this change, and they are arguably good reasons. But the real, and likely unintended, consequence was to radically alter that way teams are constructed. In a capped league salary is a wildly significant piece in how players are valued, and having an entire class of players with their salaries restricted changes how both rookie and veteran players are viewed.

The effects of this are visible at every position in the league, but nowhere is it more clear than at quarterback. The importance of the quarterback position is at an all time high, and that has led to some very uneven negotiating terms, resulting in a skewed and ridiculous compensation distribution. Now any quarterback who can claim to be a reliable starter is able to demand to become the highest paid player in the league (as we’re seeing with Kirk Cousins, an average quarterback who is about to sign the first fully guaranteed contract in NFL history), while backup quarterbacks are seen as having virtually no value.

A proven starting veteran quarterback is going to earn more than $25 million a year in the NFL. Matthew Stafford, Derek Carr, and Joe Flacco have all signed contracts in excess of $100 million over the past few seasons, and no one would consider them superstar passers. But on the other end of the spectrum we have an entire class of quarterbacks still on their rookie contracts. Mitchell Trubisky will count only $6.6 million against Chicago’s cap in his second season. Jared Goff and Carson Went are both looking at cap hits between $7 and $8 million. On the open market these players would likely receive more than twice what they are costing their current teams.

Together these classes of quarterbacks have led to extreme disparities in how teams are paying their quarterbacks. The chart below shows the Average Annual Value of the contracts for every quarterback on each team’s roster last season. See if you can spot where things drop off.

There is a general slight downhill trend among the first half of teams, followed by an immediate and sharp dropoff. The only two teams in the middle were Cincinnati and Buffalo, with a pair of middle of the pack quarterbacks they were able to convince to take rare moderate contracts. Below them we see teams whose main starting quarterbacks last year were either on rookie contracts or unwanted veterans who managed to hold off the mistakes of drafts past. (I see you, New York and Denver).

I’m sure you’re all very interested in the minutiae of NFL contract structures, but now you’re wondering what this has to do with the recent flood of trades. Well if you look closely, you will notice a couple consistent trends. Many of the teams trading away veteran players are on the left side of the chart, and many of the teams acquiring them are on the right.

This disparity in the cost of the quarterback position means that teams with signed veterans and teams with players on their rookie deals are essentially playing two completely different games when it comes to team building. A team like the Rams, the Bears, or the defending Super Bowl champion Eagles have essentially $20 million extra in cap space. And looking at the distribution of teams above, it doesn’t appear that quarterback expense has that much to do with value received from the position, as teams like Arizona and Detroit sit near the top of the list while Green Bay, Seattle, and New England fall in the middle.

Let’s just run through a few examples to see what I’m talking about. The clearest case is Michael Bennett, traded from the Seahawks to the Eagles. Seattle could no longer afford his contract, and despite how valuable he is to their defense, they decided they needed the money more than they needed him. Fortunately the Eagles were there with plenty of cap space to absorb him, adding another talented pass rusher to their already extremely deep front.

A similar deal happened between the Broncos and the Rams. Both teams are among the lower paying class, but while the Rams appear set in the near term with Goff at quarterback, Denver is still desperately in need at that position. And because they (erroneously) believe they are one quarterback away from competing, their plan is to jump into the higher paying class, adding Case Keenum at a cost of $18 million a year. To clear the space for this they had to ship away Aqib Talib, a starting cornerback the Rams were happy to accept.

In both cases a team facing a cap crunch made a decision to let a veteran star go in exchange for an unproven, but much cheaper, draft pick. On the other end, the space saved by the rookie quarterbacks allowed the Rams and the Eagles to add a costly veteran to their already deep roster.

Not every trade falls into this category, but you can see strands of the same thinking throughout. Cleveland has plenty of cap space, so they were able to absorb Tyrod Taylor as a bridge option while the Bills search for a cheaper rookie passer. The Browns also sent away a couple of draft picks for Jarvis Landry, a quixotic receiver who is going to be able to demand a lot more money than he deserves. Such a player doesn’t have a place on the team that paid the most money to quarterbacks in the league last year, but for a Browns team with nothing but cheap rookies and a mid-level expiring veteran, he is worth the gamble.

A player like Marcus Peters was dealt away for off the field reasons, but the Rams were able to take him because of Goff’s contract. And the Chiefs sent away a proven veteran quarterback in Alex Smith largely because they want to move from the left group into the right, enabling them to bring in Sammy Watkins. (Don’t ask me to explain why the Giants traded for Alec Ogletree or the Panthers traded for Torrey Smith. Sometimes teams are just stupid.)

We are now seven years into these new contract structures, and teams are beginning to figure some things out. Last season the Eagles were able to win the Super Bowl largely because of the space saved for them by Wentz. They were able to add veteran free agents like Chris Long and Alshon Jeffery because of this cap space, and they traded for players nearing the end of their rookie deals like Timmy Jernigan and Ronald Darby because they had the cap space to keep them around that their original teams did not.

We saw the benefits of this depth clearly in their NFC Championship matchup against the Vikings. Minnesota is one of the few teams that can match up one for one with Philadelphia along the defensive front, with a pair of double digit sack producers and a run stuffing defensive tackle. Early in the season it was a very reasonable argument which team had the more disruptive defensive line.

The difference between the two became clear as the season went along. While Philadelphia was able to pull players like Chris Long and Derek Barnett off the bench, the Vikings were stuck using largely the same front on every play. Of all the Eagles defensive linemen, Brandon Graham played the highest percentage of their defensive snaps at 64%. All four Vikings starters eclipsed that number. Unsurprisingly, their effectiveness waned as the season went along, and by the time they reached the championship game, Nick Foles was able to stand comfortably in the pocket while Case Keenum was running for his life.

Seven years in we have already seen one full cycle of development under the rookie quarterback scale, and we are now seeing a strategic shift across the league in response. The first real guinea pigs for this new system were the Seahawks, and they handled things about as well as you could imagine. In 2012 they stumbled upon a pot of gold with third round pick Russell Wilson, a franchise quarterback that cost them less than $3 million total over his first four years. Obviously finding draft steals like Richard Sherman and Bobby Wagner helped as well, but the presence of an affordable quarterback made it possible for them to swing for the fences and add players like Bennett, Cliff Avril, and Percy Harvin (some additions worked out better than others).

Obviously this core won the Seahawks a Super Bowl in 2013, and it set them up for as good a sustained run of success as we’ve seen in recent memory from a non-Patriots team. But it also had a very clear time limit. In 2015 Wilson signed a four year deal worth $87.6 million, fundamentally altering the entire makeup of Seattle’s roster.

They did their best to lock up their stars, but they no longer had the money to keep around useful contributors like Bruce Irvin and Golden Tate. They tried to compensate by paying almost nothing to their offensive line and hoping Wilson could work magic behind them, a strategy that came back to bite them as they failed to make the playoffs in 2017.

Seattle put it off for as long as they could, but this offseason the bill has come due. In addition to trading Bennett, the Seahawks have also released Sherman, the first steps of what will likely be a major dismantling of the core that won them their Super Bowl. Wilson is still there for the long term, but the team they are going to build around him is going to be brand new, built on cheap young talent they have to hope can replace their proven but expensive veterans.

A starting quarterback on a rookie contract is the most valuable commodity in the league, but it doesn’t last forever. There is a very defined window for competition, when a team can build depth around a budding star and make a run. Philadelphia hit this window a year ago, and they’re doing as much as they can to make the most of the remaining two years. The Rams are trying to do the same in the two seasons they will have before Goff’s inevitable extension forces them to carve apart their roster.

The math of building an NFL roster has fundamentally changed since the rookie wage scale went into effect, and teams are still figuring out the best strategy to take advantage of these new rules. It raises all sorts of interesting questions going forward about whether teams will rethink things that until now have been taken for granted. Will the Titans and the Buccaneers just hand Marcus Mariota and Jameis Winston huge contract extensions if they continue to have up and down performances, or will they try to find something more cost effective? Should the Giants be more willing to part with Eli Manning for a chance to get a true franchise option? Did teams pass up on the Cousins sweepstake knowing that the 4-5 depth pieces they could add with that money may be worth more than the difference between him and an unproven rookie?

These consequences weren’t intended when the league instituted the rookie wage scale, but they’re happening nonetheless. And while we can definitely debate the merits and the ethics of the system they’ve set up, we can’t deny that it’s brought an interesting spark to the NFL offseason. A new market inefficiency has opened up across the league’s rosters, and the activity we are seeing this offseason may be only a taste of what we will see in the years ahead.