The myth of the rookie QB contract
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- Indianapolis ColtsLiveTodayTomorrowvs--|
- Seattle SeahawksLiveTodayTomorrowvs--|
- Russell WilsonLiveTodayTomorrowvs--|
- Pete CarrollAmerican football player and coach
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John Schneider made the most momentous NFL draft pick of the 2010s surrounded by telephones, swiveling chairs and people who questioned him. Schneider, the then-40-year-old general manager of the Seattle Seahawks, knew precisely what he wanted to do in the third round of the 2012 draft. Months earlier, heโd called head coach Pete Carroll and raved about Russell Wilson. Come April, Schneider was โhell-bentโ on drafting him. But the coaching staff, according to a source who was in the room that day, wasnโt so sure.
โWell, you know, heโs short,โ the source recalled Carroll saying. โHe doesnโt fit our system.โ
The decision they ultimately made, and the results it helped produce, have influenced NFL roster building since. The Seahawks took Wilson and rode him to a Super Bowl in his second season. They nearly won another the following year while spending just over $2 million on quarterbacks, the smallest sum of any team over the past decade. Their success, to some, became a model. The capable QB on an affordable rookie contract became the most prized asset in football, and teams began building around that four-year window.
As some paid tens of millions to veteran QBs, the theory went, the NFLโs rookie scale allowed others to get similar performance on the cheap โ and construct a more complete roster with the leftover cash. The past four Super Bowls have featured a team that fit this mold. The Eagles won with (an injured) Carson Wentz in 2018. The Jared Goff-led Rams came close a year later. The Chiefs reached the pinnacle twice with 5% and 4% of their salary-cap space allotted to footballโs most important position.
Other teams, according to NFL execs, have tried to replicate that success. The proportion who start inexperienced QBs has risen. The proportion who hesitate to give second contracts to sub-elite signal-callers has grown. โYouโre starting to hear the chatter now that it might be better to, every four or five years, get another quarterback on a rookie deal,โ says former Bills GM Doug Whaley.
But the early 2010s Seahawks, according to the source, never verbalized any of this as a strategy. It wasnโt the lesson they extracted from their own success. It is, instead, misguided.
Yahoo Sports compiled and analyzed 10 years of data on quarterback salaries, experience, performance and team success. Using numbers from Spotrac and Football Outsiders, we designed a metric to compare a given quarterback's performance to a salary-based expected performance. We hypothesized that weโd find a strong correlation between that metric โ performance relative to salary โ and winning.
Instead, we found a relatively weak correlation (R2 = 0.17), and a stronger one (R2 = 0.44) between QB performance alone and team success.
The takeaway, in short, is that the rookie-contract QB craze is overblown. โIt's a theory,โ says longtime NFL GM Bill Polian, โthat works in practice if you happen to have a very good [young] quarterback. If you don't have a very good [young] quarterback, it doesn't work so well.โ
The advent of the rookie wage scale
Ten years ago, as top draft pick salaries ballooned without restriction, the NFL decided to restrict them. The league implemented a rookie wage scale that established a hard ceiling for rookie contracts and rigid financial guidelines for each draft slot.
In 2010, the final year before the scale went into effect, No. 1 overall pick Sam Bradford signed a six-year, $78 million contract containing a then-league-record $50 million in guaranteed money. It was comparable to second and third contracts signed by the likes of Tom Brady, Ben Roethlisberger and Drew Brees.
One year later, top pick Cam Newton netted a four-year, $22 million deal. Instantly, he became one of the NFLโs biggest bargains.
While the rookie pay scale limited the amount top draft picks could earn, the going rate for established quarterbacks swelled. In July 2012, Brees signed a five-year, $100 million contract, the first in NFL history that paid $20 million per season. Six years later, Matt Ryan signed the first deal worth $30 million per season. More recently, Dak Prescott, Josh Allen and Patrick Mahomes have secured new contracts worth $40 million-$50 million annually. The salary cap boom, from $120 million in 2011 to $198 million last season, boosted that trend. But even relative to the cap, QB spending has risen, from 8.6% of all cap money in 2011 and 2012 to 11.4% in 2018 and 2019.
The increase was driven entirely by veterans. The rookie wage scale, meanwhile, kept young QB salaries flat, creating a massive gulf between newbies and quality vets. That gulf is why NFL executives say there is value in starting quarterbacks on rookie deals. A team that has one faces less pressure to unearth potential starters or key contributors with late-round draft picks. It typically has surplus cap space to surround its quarterback with quality depth, and to splurge on high-priced veterans at other key positions.
โItโs stupid to say thereโs not an advantage," says former Packers executive Andrew Brandt. "Because a quarterback on a rookie contract might be the most undervalued player in all of sports."
And so, executives say, some teams began chasing that player. They began reaching for QBs higher in the draft โ on average, four have gone in the first round since 2017, up from 2.65 over the previous 17 years โ and turning over franchise keys sooner. โThere are no more days of sitting and learning,โ Brandt says.
The problem, however, is that these teams have been chasing an advantage that is minimal and difficult to obtain.
You canโt hide bad QB play
The craze has been fueled by anecdotal evidence. The empirical trends tell a truer story: For every Wilson, there are several Sam Darnolds; for every championship won by an underpaid Wilson or Mahomes, there are multiple won by handsomely paid veterans.
A comprehensive study of the rookie wage scaleโs first decade revealed that the optimal NFL roster structure does not exist. There is no one way to build a contender, no best way to build a Super Bowl champ. Of the NFLโs last 10 title winners, six paid their quarterbacks above the league average; four paid below it. The 40 teams that reached conference championship games over that span paid their quarterbacks anywhere from $2 million to $30 million. On average, they paid smack dab in the leagueโs 50th percentile.
Success, in reality, has been fueled not by cheap QBs, but by good QBs.
โThe key,โ Polian says, and โthe whole pointโ of any roster-building strategy, is to get a โtop-flightโ QB, no matter how, and no matter how much you have to pay. The idea that you canโt build around an expensive one, Brandt argues, is a โcopout,โ and simply โwrong.โ
In fact, the value of the extra cap space opened up by a cheap QB barely shows up in data. Among teams who got top-tier quarterback play over the past decade โ the top 20% by Football Outsidersโ DYAR metric โ there was virtually zero correlation between QB salary and winning. The 2019 Cowboys spent just 1% of their cap space on Dak Prescottโs 4,902 yards and 30 touchdowns โ and missed the playoffs. The 2020 Colts, on the other hand, spent a record sum that yielded only mediocre QB play โ and won 11 games.
In theory, overpaying at quarterback would create deficiencies elsewhere on the field. But, executives say, itโs easier to find cheap talent at many of those other positions. Itโs also easier to mask those deficiencies. โYou can hide a left tackle by putting a tight end over there or having a back in the backfield,โ Whaley explains. โA linebacker, you can hide schematically. Itโs hard to hide deficiencies in the quarterback position.โ
Itโs also easy to manipulate the salary cap to make room for a pricey veteran. Teams can creatively structure new contracts or restructure existing ones to stay under the cap, even as they exceed it by tens of millions in cash spent. This past June, the Titans restructured Ryan Tannehillโs four-year, $118 million contract to create cap space to acquire Julio Jones. They converted guaranteed money into a prorated signing bonus, decreasing Tannehillโs cap hit to $11.1 million this year but increasing it to $38.6 million in 2022, $36.6 million in 2023 and $4.6 million in each of the first two years after the contract expires.
Too many go-for-broke moves like that can land a team in cap distress, but the savviest front offices know how to pick their spots. Polian surrounded Peyton Manning with talent in Indianapolis, and never once felt hindered by Manningโs hefty contracts. Brandt managed the Packersโ cap around Brett Favre without mortgaging the franchiseโs future under Aaron Rodgers.
โListen,โ Brandt says, โYou can have a $30 [million]-$40 million quarterback on a $200 million cap. Thatโs OK.โ You can still fit plenty into the leftover $160 million.
Which is why, in quarterback contract decisions, โitโs always going to be performance that matters most,โ Whaley says. โThe only time the financial aspect matters is if you bet on the wrong guy.โ
The Rams and Eagles offer cautionary tales. They hitched themselves to Goff and Wentz, respectively, with proratable signing bonuses and guaranteed options. A year later, they realized theyโd made mistakes, and are now stuck with two of the largest โdead moneyโ charges in NFL history. Goff will take up $24.7 million of the Ramsโ 2021 cap room while playing for the Lions. Wentz will account for $33.8 million of the Eaglesโ space while playing for the Colts.
โTeams get in cap trouble not because of paying a lot of salary,โ Brandt says. โThey get in trouble because of dead money.โ
They get in trouble not because of a dollar number, but rather because they chose a quarterback who forced them to eat it.
Contract mistakes are never about the dollars
Every team enters contract negotiations with a number in mind. The mid-2000s Colts were no different. As they prepared to offer Manning an extension, Polian, his staff and owner Jim Irsay sat around a room in Indianapolis. They evaluated their All-Pro QB, and comparables around the league. Salary cap gurus gave their input. Together, they came up with a valuation, a dollar figure they hoped Manningโs agent, Tom Condon, would agree to.
Then Irsay asked the most relevant question of all: Bill, if Peyton were out on the open market, how many teams would he have chasing him?
Polian began listing teams โ one, then a second, then a third. When he got to four, Irsay cut him off.
Stop. Hold it. I get it, Irsay said. Do the best you can, let's try and bring it in on our number โฆ but we need to sign him.
And that, in a nutshell, is how most discussions about coveted quarterbacks go. Agents and their clients have overwhelming leverage in an increasingly pass-happy sport. Quarterback is unquestionably its most important position. Itโs also the hardest to find. The draft is a crapshoot. Upper-echelon QBs rarely hit free agency. For any team that has one, extending him is almost always preferable to the alternative.
So, Polian says with a laugh, โwhatever your number is,โ the number you end up paying is โgoing to be higher.โ
The data, though, suggests that isnโt a problem. Established quarterbacks like Manning and Mahomes arenโt overpaid. Teams should go beyond internal valuations to sign them. โItโs not tough to decide with the Patrick Mahomes of the world,โ Whaley says.
โItโs the Baker Mayfields, the Lamar Jacksons,โ he continues. โThatโs when you get into a dilemma of, โWhat should we do?โโ
The Browns and Ravens, respectively, havenโt yet decided. They entered 2021 with starting QBs on the fourth year of rookie deals, with negotiations over extensions either ongoing or on hold โ and perhaps influenced by those aforementioned cautionary tales. The Rams and Eagles didnโt wait for a fourth year to be absolutely sure that Goff and Wentz were franchise QBs. They paid a price.
The Browns and Ravens will also pay for waiting. The market for second-contract QBs is constantly on the rise. The Rams and Eagles tried to get out in front of it and save money. If Mayfield or Jackson starts strong in 2021, โthen youโre going to pay him an extra $5 million a season,โ an NFL GM recently told Yahoo Sports.
Executives and data alike suggest itโs a price worth paying. The Browns and Ravens, essentially, are buying clarity, more firm answers to questions such as: Is Jackson an accurate enough passer to carry a team through the playoffs? Can he continue to gash opposing defenses with his legs while avoiding injury? Can Mayfield build off a prolific 2020 stretch run? Or will he regress the way that Goff, Wentz, Marcus Mariota and Mitch Trubisky all did? Might the Ravens or Browns ultimately be better off moving on and dipping back into the draft?
And therein lies the true value of the rookie scale. It allows teams to swing, miss, and swing again a few years later, unburdened by a draft mistake. It allowed the Bears to take Trubisky second overall in 2017, anoint him their franchise QB without paying him like one, then move on and start anew with Justin Fields in 2021.
The value, though, isnโt in winning during that four-year job interview. It isnโt in riding that four-year cycle perpetually. The goal isnโt to avoid paying top dollar for a quarterback. Itโs to find one worth paying.