Yesterday Derek Carr, and the Oakland, soon to be Las Vegas Raiders, agreed to a 5 year $125 Million-dollar extension keeping the quarterback in Black and Silver until 2022. It’s good news for the team, they have their franchise quarterback tied up for the next 6 seasons. It’s good news for Carr, because he simply just got paid, although he might have to take his brother out to lunch for the rest of his life, but he got paid.
It’s also good news for the Denver Broncos, and the rest of the AFC West. Why? They paid him before they had to, eating cap they didn’t need to and making him more expensive. There was never a chance they were going to walk away from Carr. ZERO! He was going to get paid and was going to be the Oakland and eventually Las Vegas Raiders quarterback for years to come. Nothing legally could be done to stop that.
Derek Carr’s original 4-year rookie contract
Carr was still on his rookie contract that would have given him a 2017 cap hit of $1,709,210. His 2017 cap hit is now a reported $17,731,691. So, the Raiders essentially flushed $14,022,481.00 in salary cap dollars. As of yesterday, the NFLPA had them tabbed at roughly $32million of cap space, so they can easily afford it, but why waste it? You aren’t getting it back. Let Kirk Cousins, and Matt Stafford or any other QB come along and break Andrew Luck’s highest paid contract (Jim Irsay also flubbed in signing Luck a year early flushing cap $, as well).
Obviously, Carr wants to get paid. Everybody wants to get paid, and no, Tom Brady, is not playing for peanuts in New England (like some of the media want you to believe), nor is he gouging the Patriots for every nickel, but neither did Peyton Manning. They both are/were getting paid.
What alternatives did they have available?
Option 1: Let Carr play out his rookie contract and franchise tag him in 2018.
The Raiders could have allowed Carr to finish his rookie contract, slap the franchise tag on and then start the negotiations next year when he would be in line for an estimated $24 million cap hit via tag. Hypothetically, even if Carr would have played 2018 under the tag, he would have played ’17 and ’18 for just under roughly $26 million dollars. His 2018 cap hit alone is reported at $25,000,000. So, in the end, they have wasted (wasted might not be the best word since they have a franchise QB), but in very least, they spent $15 Million dollars and likely more faster than they needed to had the contract been signed next year. Even if it was for 5 years 130, million, they have spent cap dollars they didn’t have to, or before they were forced to. When the current CBA was signed, the owners and teams wanted the rookie pay scale to prevent the enormous and unearned Sam Bradford contracts from happening. It gives teams the ability to have a young QB at a lower rate. Well, until the sign a player a year before they had to.
It needs to be clarified that I am not in favor of players playing under the franchise tag. The Washington Redskins are facing a 2nd year of paying Kirk Cousins under the tag and if that happens they have flushed that money ($19.9M in ’16 and potentially $23,9M in ’17) and he’s still not under a long-term contract. The franchise tag should be a tool to retain a player and work out an extension as the Broncos have done the past two off-seasons with Demaryius Thomas and Von Miller. That is a perfect example of how to use the tag, but I can argue against teams allowing a player to play a franchise tagged year and letting them walk. Look back to Julius Peppers and his first tenure with the Carolina Panthers or Edgerrin James and Indianapolis Colts. Those teams should have put those tag dollars into a signing bonus and extended the player at that point. Allow those $’s to be a form of an investment as opposed to a parting gift. I look for Washington to ink Cousins to a multi-year deal prior to the July 15th deadline. The deal could be quite similar to the deal that Carr just signed.
Option 2: Let Carr play out rookie contract and give him a similar 5 year $130 million contract in 2018
In this scenario, his two-year charge would have would have been $22 Million and change for ’17 & ’18 even with a bump in total dollars, signing bonuses and two additional roster bonuses and increases in his workout bonus in years 2-5. This would have saved them roughly $18 million in cap dollars. Again, they simply spent money before they were forced to and that cap space is lost forever. Had the contract been identical to the one he signed, the cap savings would have been a bit over $20 Million.
Derek Carr’s actual contract extension: 5 years 125M
His two-year charge comes in at $40,731,691, which shows them flushing $15-18 Million dollars (depending on options 1 or 2) that they didn’t have to this quickly. Those dollars are gone. They are in the ledger under Derek Carr for 2017 & 2018. Again, they had the cap space to absorb the hit, and they have a franchise quarterback. I’m not trying to be negative. I like the kid. I simply wish he played in Cleveland, or for the Jets.
Why is there a post about the stinkin’ Oakland Raiders?
This contract was analyzed for two reasons. The Raiders are an AFC WEST Rival and hopefully, the Denver Broncos could hopefully be in a similar position in extending Paxton Lynch. Unlike Carr though, they have a 5th year option that they can trigger. That 5th year option will likely be cheaper than what year one would be in a projected. Based on Lynch’s draft position, his 5th year option would be based on the average of the 3rd through 25th quarterbacks based on cap hits from that coming year.
If Trevor Siemian is extended, then he does not have the 5th year option available. Siemian is under contract through 2018 with a 2018 cap hit of $718,916.
Carr and the Raiders didn’t have a fifth either, but in either case, you hope the Broncos shy away from the strategy that the Raiders, and Colts have taken and save as much cap space as possible, to spend in the future.
Lynch is under contract through 2019, with a 2019 cap hit of $3,015,188, his projected 2019 5th year option as it stands today would be $17,033,630 (based on 2018 salaries, likely to increase as new deals are added).
One can argue that the sooner you wrap up a player the better, but if you view Carr’s contract to Luck’s contract it was only “marginally better”, and had the Colts let Luck play out his 5th year option and then signed his deal, or Carr’s deal or even one marginally better than that, they would have had more salary cap dollars at their disposal. Thankfully Jimmy Irsay flushed that down the toilet as well.
It’s a copycat league and it is not limited to schemes. The agents will argue the Colts did this; the Raiders did that, there could be other examples between now and that point in time and the Broncos might feel forced to follow suit, but cap dollars are valuable and even if you have them there is no need to spend them until you are forced to since they can be rolled-over into the next league year.