Matthew Stafford I love/hate him!
My last article was a look at the idea of the Lions changing quarterbacks. You can find it HERE if you’d like to read that over for some context on the subject of whether or not Stafford should be the quarterback of the future for the Lions. Today we’re looking at whether the Lions should extend him now, rather than waiting until his contract expires in two years. The question is not whether the Lions should keep him – yes they should. I’ll briefly retread the subject: quarterbacks are really difficult to find, so when you get a good one you should hold on and ride him as far as he will get you. The finances of quarterback contracts are some of the most complex in the league because of the high salary cap numbers and length typically involved. Of the top fifteen average cap numbers for an individual player in 2016, only one player who is not a quarterback makes the list. So given that the Lions should extend him at some point, should they extend Matthew Stafford early?
The Arms Race
Let’s take a look at quarterback salaries over the last two years. In 2014 the top ten NFL quarterbacks averaged a cap hit of $19.125 million. In 2016 they will average about $21.75 once Drew Brees’ extension drops him out of the top ten in this year. In two seasons, the inflation rate has been 14%; chugging right along with the salary cap as a whole at 16%, that’s not a statistically significant variation. Assuming that it continues to move at about that same rate, the going rate for a starting quarterback two seasons from now will be a deal that costs the team $25 million per season, but looking at the quarterback contracts due for an upgrade over the next two seasons, I don’t think that it’s going up nearly that much.
There are two quarterbacks that fit in to the top tier that will be extended in the next two off-seasons. The first is Drew Brees of the New Orleans saints. Brees is set to have a cap hit of $30 million for the Saints this season, and has never been a guy that was willing to take less than he could get. He is going to get paid, and so is the other quarterback who will be extended shortly, Andrew Luck. Jim Irsay, the Colts’ owner, has said that Luck’s deal will be the biggest in football history. But even if both of those players set a new high mark, to get the market to $25 million per season, they would both have to exceed the current top end by more than a million dollars per season. There is not a single quarterback contract in the top 21 average cap charges that exceeds the next in ranking by one million dollars. In fact the top five are separated by $1.13 million. The top ten are separated by $2.13 million. There is a chance that Brees does that, he has the Saints in a bad position, they can’t continue into the year without any upgrades to their roster, and they can’t upgrade their roster without dealing with Brees’ contract. Luck however is coming off an injury, and will need to bounce back completely to top the list at all. It is far more likely that the two players combine to raise the mark by $1-1.5 million, or $23.6 million per season. We’re already at the end of the wave for quarterback salary escalation for a few years. Saving cap space in the future is not a reason to extend Matthew Stafford early.
So what is his next deal going to look like if the Lions wait?
Stafford will be 30 when his current deal ends, which is still well within the bounds of a long term contract at the quarterback position. So there is no relief coming due to age, as there is with Ziggy Ansah, that doesn’t happen for quarterbacks. the starting point for any Quarterback contract is the franchise tag, which in Stafford’s case would be a possible two seasons at $26.4 million and then $31.6 million for a second year. So his guaranteed money is at least $58 million. Should the Lions decide not to extend Matthew Stafford early, the eventual contract would likely be a five or six year deal worth $24 million per year on the high end, assuming he continues to thrive over the next two years.
So should the Lions extend Matthew Stafford early?
An early extension for Stafford is made somewhat more complex than most extensions by the $5.5 million in amortized signing bonus money that is going to hit the Lions salary cap in the next two seasons whether they do a extension or not. That means that in order for the Lions to not use even more cap space on Stafford in the next two years, the salary cap charge from the new deal needs to be $16.5 million or less for two seasons. If it were a five year contract with an average value of $22.5 million and a $35 million signing bonus, that would leave an average cap charge for the remaining three seasons at $26.1 million. A six year deal at $22.5 million per season with a $42 million signing bonus would have a $25.5 million cap charge for the final four seasons. A seven year deal with a $49 million signing bonus would have a cap hit of $24.9 million for the final five years, making the deal virtually identical to the five year, $25 million dollar deal that represents the top end of what he would likely be signing in two years, if he maintains or exceeds his level of play.
Should the Lions wait a year to extend Matthew Stafford early?
By waiting until next season, having only the single season of old bonus money affecting the contract, the Lions still do not avoid this effect on their salary cap. So while the money may be slightly higher per year, I would estimate $23.5 million per season, the salary cap charges are lower but only slightly, the savings being less than $1 million per season in the years after the current contract would have ended. So financially, there is no significant difference in waiting a year, and no salary cap advantage to doing the extension in either this year or next. Unless he is willing to take less money than that right now. There has never been any indication that Stafford has any interest in home-town discount.
There is no financial advantage to extend Matthew Stafford early because of the way his previous contract was crafted. Even using the franchise tag and negotiating from a point of weakness likely puts the team in the same salary cap situation they would find themselves in two seasons from now. By extending him now, the team is merely extending their financial risk in the event of a catastrophic injury, for the advantage of not having to answer this question in press conferences any more. The only way it makes sense is if he were willing to sign an extremely team friendly deal, which is true in the case of any player that I am going to write an article about. Stafford is the quarterback of the Lions’ immediate future, but the team needs to get completely out from under the weight of this deal before they can craft one that makes sense for the Lions going forward.