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The NFL’s Superstar Inefficiency

While foolish teams remain hell-bent on “winning” free-agent negotiations, smart teams have a chance to shift the paradigm by anticipating cap changes and stacking studs

Getty Images/Ringer illustration
Getty Images/Ringer illustration

In the NFL, perhaps the most heavily dissected sports league on the planet, almost nothing can slip past unnoticed. So it may sound counterintuitive, but one group of NFL players is actually getting increasingly devalued in the era of overanalysis: the superstars.

The league’s elite players are now bargains, even when they command close to $20 million a year. NFL team executives are overthinking free agency, penny pinching, and obsessing over bargains despite swelling revenue, thereby clearing the way for the potential emergence of a smart counterstrategy to team building: inking a bunch of high-priced players.

The best formula for building a sustained winner in the NFL is still to get as many good, cheap rookie contracts as possible while also adding some slightly more expensive veterans without destroying the salary cap. The 2013 Seahawks perfected this blend, as have the Patriots throughout their 15-year run. The successful track record of the cheap-contract-collection philosophy made big second contracts as unfashionable in the NFL as Zubaz pants and, when paired with the 2011 CBA, fostered the current climate, in which every stubborn decision-maker in every front office has been conditioned to overthink every deal — even when spending whatever’s necessary to lock up a superstar should be the obvious move.

The NFL’s salary cap is tied to a clause in which teams must spend between 47 and 48.5 percent of their revenue on players; because league revenue is basically always rising — it’s reportedly set to pass $13 billion this year, with NFL commissioner Roger Goodell reportedly saying he wants to hit $25 billion by 2027 — the cap also rises as certainly as Ted Ginn Jr. drops passes. So while a cost-controlled superstar remains a beautiful thing, teams’ laser focus on getting a bargain has created an incongruous landscape in which the salary cap is rising, but NFL stars’ salaries are not rising with it.

This isn’t true in other sports, of course. In the wake of Kevin Durant’s move to the Golden State Warriors, there’s been plenty of debate about whether the superteam model could ever work, or even occur, in the NFL. The league’s not there yet, but every undermarket superstar deal makes it increasingly possible that a savvy team could identify the opportunity to approach free agency in a different way and pounce.

In today’s NFL, players, coaches, and executives think about superstar deals incorrectly. Players opt for security instead of pushing for more, leaving the very top of the league to take a massive hit financially and settle for the market rate at their position, even in an era when depth reigns supreme and lesser players are making record money. As NFL stars’ popularity soars, however, they should be trying to cash in like never before, and the teams normally obsessed with managing the salary cap above all else should recognize the opportunity to get a leg up on the competition by stacking stars.

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Getty Images

This possibility is worth mulling during this crucial week for big-contract strategy, as players who received a franchise tag have until July 15 to agree to a long-term contract with their club; those who don’t will play on a fully guaranteed one-year franchise-tag contract before possibly hitting the open market next spring. As stars like Broncos pass rusher Von Miller, Jets defensive end Muhammad Wilkerson, and Chiefs safety Eric Berry engage in tense negotiations, their teams shouldn’t hesitate to hand out lucrative long-term deals. Reports have Miller and the Broncos arguing over guaranteed money, not total compensation, something that shows how inflexible teams can be when it comes to negotiations. The Broncos boast a franchise-altering, quarterback-destroying Super Bowl MVP, and yet the big debate is over money paid out in the first three years; it almost sounds like a parody of overcompetitive NFL team negotiating.

And so against all odds, star players have become a market inefficiency in the NFL because franchises are hesitating to offer big second contracts, even the ones that are clearly warranted.

The franchise tag further clouds teams’ already half-baked views of the worth of the top players in the league, with Miller recently telling ESPN the reliance on tagging is a “leaguewide problem.” Miller could conceivably be tagged three times by the Broncos for a total of $55 million over three years. The multiyear tagging option has loomed over many star negotiations, but hasn’t been utilized post–2011 CBA, and few team executives around the league think a club will ever exhaust all of its tags on one player, making the scenario a stretch at best. Of course, sometimes it’s not even feasible to use the franchise tag once. Ndamukong Suh, for instance, wasn’t tagged in 2015 because of the massive salary cap ramifications doing so would have had on the Lions. But plenty of teams utilize the tag, which is part of the system that allows teams to string along their stars and keep them from getting the contracts that their play would yield in a vacuum.

With the league largely reluctant to give even the best players the cut of the cap they deserve, teams have chosen other ways to spend. They’ve made up their minds that depth is more important than a top-heavy roster with a massively paid megastar. Remember, the nature of the second NFL contract recently changed in a key way: Before the collective bargaining agreement in 2011, top draft picks entered the league with huge contracts, which, upon their expiration, served as the starting point for a negotiation, facilitating sizable deals for free agents. Salary cap expert and former agent Joel Corry points to Calvin Johnson, who signed a six-year deal worth $64 million as a rookie in 2007, and, negotiating off of that high number, was able to score an extension after the 2011 season worth as much as $132 million over eight years. But the economics of the game changed with a slew of newer deals. In 2011, the CBA introduced strict new caps for rookies on how much they could earn on their first deal, making negotiating the second contract harder for players, as teams recognized that the stars were negotiating off of lower rookie deals and would be hard-pressed to match their peers’ recent totals. Sure enough: Three years after Johnson’s deal, elite receivers like Julio Jones (five years, $71 million) and A.J. Green (four years, $60 million) couldn’t match Johnson’s money when they inked extensions.

NFL stars have accepted long, cost-controlled deals that run more than five years, as opposed to the short one- or two-year deals their NBA brethren now opt for; the NFL players’ quest for security reflects the brutality of the game and the risk of injury. And because they are one of 53 players, not 25 like in baseball or 15 in basketball, NFL players are conditioned to take less. That means NFL superstars aren’t well-positioned to take advantage of salary cap jumps like NBA players, and the deals become almost immediately team-friendly as a result. J.J. Watt will never make more than $17.5 million in a season over the life of the deal he signed in 2014. If this were basketball, he would opt out routinely; if it were baseball, he would have a contract so big he would sleep on a Scrooge McDuck–style pile of riches.

While the NFL is a different animal, however, it can still learn something from its fellow leagues: specifically, how to think outside the box when it comes to honest-to-goodness stars. Collecting them in the rare instances they become available could soon become a smart way to build a roster, if franchises are willing to anticipate a swelling cap and try a new free-agency approach.

Everyone on both sides knows that a salary cap spike looms, but that inevitability is rarely fairly reflected in the final deals.

Consider: Olivier Vernon, a much worse pass rusher than Watt, signed an $85 million deal with the New York Giants two years after Watt inked his extension and will take up more salary cap dollars than Watt from 2017–2020. This move by the Giants — only justifiable if you focus on Vernon’s second half of last season and maybe squint a bit — is the lowlight of the NFL’s star contract problem. Vernon got this money because of a two-team bidding war between desperate squads, the Giants and Jaguars, and his deal eclipses those of many legitimate superstars, simply because of the timing. When true stars are up for payment, though, those players will wind up making just a shade more than players like Vernon, in part because the league lacks risk-takers and creativity, and in part because few players hold out for massive dollars despite their worth. Seahawks defensive end Michael Bennett, a legitimate star, said deals like Vernon’s “can make your stomach hurt. It’s like seeing your favorite girlfriend get married to somebody else.”

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Getty Images

As Corry noted, even quarterbacks, long the example of players who eat up salary cap space, are becoming value players. Last month Andrew Luck signed a five-year, $122.97 million deal that places him among other top quarterbacks Russell Wilson (four years, $87.6 million) and Cam Newton (five years, $103.8 million) in signing extensions after the CBA change. NFL.com called the Luck signing a megadeal, but by 2020, all of those QB totals will look slight in the context of a massive cap. Cap flexibility is the holy grail for teams, and knowing how much goes to the quarterback, usually the most expensive piece, is key.

If the cap continues to rise by at least $10 million a year, as it has every year since 2013, it would be $175 million in 2018. If Newton’s deal were on par with Drew Brees’s deal, his cap number would be just under $34 million — the same near–20 percent chunk of the cap that Brees will make this year. Instead, Newton will earn $21.5 million in ’18, according to Spotrac. Newton, who signed his deal last summer, will never make more than $23.2 million against the salary cap under his current deal, meaning the reigning MVP will count less against the cap in 2019 than Matt Ryan will this year. Newton’s contract expires after the 2020 season. By then, the cap will be nearing $200 million, and a fair deal for Newton would pay him well over 20 percent of the cap, netting out to more than $40 million annually. In his early 30s, Newton will likely be an even more developed passer than he already is, and could be the type of superstar who could hold out for $50 million in a season. It would be fair market value for a player who could take his team to the Super Bowl, and smart teams should be willing to spend it. (Although, with a CBA expiration date of 2021, negotiations could be extra-heated that year).

How much a player counts against the salary cap is all that matters from a team-building perspective. Teams can game the cap based on restructuring contracts and spreading money out, but generally, massive contracts will cost teams dearly and hamper their ability to sign other players. The league’s cap is $155.27 million this year, and that can change slightly for each team based on how much the team spent in the past. And as the number rises, each star contract being signed will look increasingly modest.

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Getty Images

But that eventuality has yet to resonate with front offices. When former Lions star defensive lineman Suh entered free agency last year, the Dolphins essentially wound up bidding against themselves. In what other sport would the best player at his position not get chased by the bulk of the league upon entering free agency? It’s an illogical practice that has ballooned in a league where “winning the deal” has become more important than actually getting the most talent. ESPN’s Rich Cimini recently noted that, in his 18 months on the job, Jets GM Mike Maccagnan has yet to extend any notable Jets contributor off of his rookie deal. It’s a virtual certainty that Wilkerson won’t have a deal by Friday, and it looks increasingly likely that he’ll leave New York after the season. Bill Belichick — who deserves the benefit of the doubt in all personnel matters — traded Chandler Jones, who amassed 12.5 sacks last year, to Arizona a year before Jones came up for a contract renewal.

And what the Pats do, others try to emulate: Taking the draft-and-develop, thrifty approach to managing the salary cap is admirable and can be very smart when done right, and many teams that want to add free agents aim to use their money on solid, if unspectacular, veterans. Of all the team-building strategies in football, spreading money around to a handful of slightly above-average free agents might be the worst. Any team with a good coaching staff should be able to take its second- and third-round draft picks and turn them into valuable contributors. It’s better to spend that money on homegrown stars, or save it until other teams’ stars become available.

One star would be the equivalent of four $5 million solid pieces. Take the Bears, who will spend a higher percentage of their cap money on linebackers than any other team, according to Spotrac, but never splurged to land a stud: Their top-paid linebacker, Pernell McPhee, is the 137th-highest paid player in the league at $7.675 million in 2016, according to Spotrac. Instead of paying one player a fortune, the team divided the spending between McPhee and players like Lamarr Houston ($6.99 million), Danny Trevathan ($6.35 million), and Jerrell Freeman ($4 million). In that market, players like Miller (who, according to reports, will make less than $20 million if his long-term deal is struck), Watt, and Suh look like steals.

No team has tried the superteam model thus far, but some teams may be heading there. The Dolphins, last year’s Suh signers, were reportedly in on Panthers star Josh Norman when he became available, before Norman headed to Washington. The NFL is changing, and as the cap surges, big contracts will cease to be the albatrosses they once were.

Teams may not win at the negotiating table by assembling top-heavy rosters and handing out massive paydays, but they will likely win more games.