O Houston Texans saw this coming in October 2017, when the then rookie quarterback Deshaun Watson took the league by storm, playing 16 touchdowns over a four-game period. For the next two seasons, he took the Texans to consecutive titles in the division.
Upon entering fourth year, Watson is eligible to be paid as a long-term franchise quarterback.
According to ESPN's Jeremy Fowler, several league executives believe Watson will be the next NFL quarterback to get a megadeal and redefine the bar of contracts, which are currently $ 35 million a year, set by the Seattle Seahawks & # 39 ;. Russell Wilson in April 2019.
It may not last long. Kansas City Chiefs quarterback Patrick Mahomes, who was chosen in the same draft as Watson, but has an MVP award and a Super Bowl ring, will certainly get an even bigger deal, perhaps in the $ 40 million range.
Therefore, the Chiefs are watching closely and have problems similar to those of the Texans to resolve before rewarding their quarterback.
Big Cap considerations
Both teams already face the league's salary cap. Houston currently has $ 18.6 million in threshold space in 2020 and $ 34.9 million in 2021, based on ESPN Roster Management's adjusted threshold value. To maintain financial flexibility, Texans will have to maneuver other players' salaries to take over Watson's contract extension.
In 2021, Houston is currently expected to tackle left Laremy Tunsil $ 19.4 million, defensive end J.J. Watt $ 17.5 million, broad receiver Brandin Cooks $ 12 million and three other players over $ 10 million. Neither Watt nor Cooks have guaranteed money beyond the 2020 season. It seems that coach and general manager Bill O & # 39; Brien is on top of Cooks after negotiating choice number 57 for him before a draft that was deep in the talent of the recipients .
Watson currently accounts for 2.11% of the Texans' salary cap. & # 39; Brien has been active in negotiating productive and expensive players such as Jadeveon Clowney and DeAndre Hopkins in addition to adding players who were almost as expensive with the Tunsil trade ($ 14.1 million), Cooks ($ 8 million), receiver Kenny Stills (US $ 7 million) and returning David Johnson (US $ 11.1 million). Texans also added Randall Cobb (US $ 6.1 million) in a free agency.
Although these players were added with the idea of improving the offense around Watson, it came at a high price. Tunsil, Johnson and Cooks would be responsible for $ 33.2 million against the ceiling in 2020 and $ 40.4 million in 2021.
The situation of the chief captain is even more difficult. Kansas City currently has $ 2.8 million remaining in capitalization space for 2020, according to ESPN Roster Management, and that is with the Mahomes ceiling reached $ 5.3 million, occupying just 2.28% of your salary cap. The Chiefs has nine players ready to win over $ 10 million next season, including defensive end Frank Clark (US $ 19.3 million reached), wide receivers Tyreek Hill (US $ 17.7 million) and Sammy Watkins (US $ 15.8 million) and defense Tyrann Mathieu (US $ 16.3 million).
Given Mahomes' achievements, he must get a bigger contract than Watson. In January, ESPN's Fowler spoke to several executives who suggested the current Super Bowl MVP could reach or eclipse $ 40 million a year.
Teams that have won Super Bowls usually have a more balanced salary structure when it comes to quarterback salaries. Since 2011, when the new CBA established a scale for newbie contracts based on the slot in which each player was chosen, four teams won with their quarterback on a newbie contract, according to ESPN Stats & Information research. Of these five other Super Bowls, three were won by ex New England Patriots quarterback Tom Brady. In 2018, 13% of Tom Brady's Patriots' hood space was 11th in the NFL that season. Twelve quarterbacks won the Super Bowl in the first four seasons, including Brady twice.
Another variable that could affect Watson's extent is what the Cowboys do with the quarterback Dak Prescott. He was booked by Dallas in March, which has a maximum value of $ 31.5 million for 2020. He can also sign a long-term contract ahead of the July 15 deadline for the franchises.
Sarah Barshop shares the Texan who signed LT Laremy Tunsil for a three-year extension, with Deshaun Watson the next player Houston plans to arrest.
Will Watson take a long-term approach?
Where does that leave Watson? If the sides reach an agreement this summer, Watson and the Texans could agree on a four-year extension with terms similar to those of Goff and Philadelphia Eagles quarterback Carson Wentz – both made a year before Mahomes and Watson – received last summer, when each had two years left on their rookie contracts.
A hypothetical Watson deal would project a figure below the $ 40 million a year that Mahomes could command, perhaps an extension of the four-year contract and $ 152 million. With the last two years of the rookie contract fulfilled, this could yield the deal in about six years and $ 172 million.
However, an NFC executive told ESPN that he believes Watson will opt for a shorter deal for the same reasons Prescott wants: more flexibility and a previous big money break from 2023.
"I believe it’s just the beginning, just the tip, [for growth]"said Todd France, who represents Prescott, in the quarterback market." That's why you see players in various positions trying to close short-term deals. "
Quarterback Kirk Cousins adopted this approach with the two agreements it signed with the Minnesota Vikings. In March 2018, Cousins signed a three-year contract with a total guarantee of US $ 84 million. Two years later, Cousins signed a $ 66 million two-year contract extension with Minnesota, including a guaranteed $ 61 million signature.
Obviously, a key figure for these contracts was guaranteed in cash. Goff's contract leads NFL defenders with more than $ 110 million guaranteed, although if Watson signs a shorter contract, he could be more in the Cousin range.
Since Watson's fifth-year option already has $ 17.5 million against the Texans' 2021 cap, Houston may not have to take extreme measures to make Watson's contract work. Texans could pull back the contract with large base salaries in the coming seasons, which could be overhauled in the future. Teams generally keep base salaries at the bottom at the start of the contract, because most of the starting money is paid out in a signing bonus.
If Texans try to ease some of the pressure on the 2021 ceiling, they can distribute most of Watson's signing bonus in 2020 to keep up with the current low base salary for the fourth year of his contract as a rookie. Given that Texans currently have $ 18.6 million in wage cap space, they would still need to do some work on other contracts for this to happen.
One way to do this is to cut players who would not have a dead money fee. Guard Zach Fulton and Stills are candidates. Fulton owes $ 7 million in 2020 and another $ 7 million in 2021. Stills owes $ 7 million in 2020 and is a free agent after the season. Houston could also try to exchange Stills for a team lacking receivers at the end of the training camp.
Deflating bloated offers
The challenge will continue to grow around Watson with so many contracts bloated in the books.
Unlike last season, when Watson's limit reached 2.11% of the Texans 'limit and Mahomes occupied 3.04% of the chiefs' limit, these numbers would increase significantly. The average team will dedicate $ 18.6 million to quarterbacks' salaries in 2020, by Spotrac. That would be 9.4% of a team's limit.
Tunsil will account for 6.75% of the Texans' ceiling in 2020, after the left tackle set a record for the highest annual salary for an offensive lineman. Making the percentages work is one of the reasons that Brien gave Hopkins a deal, saying that "it would be very, very difficult to have an elite quarterback, an elite defensive winger, a left-wing striker and other players" and make the work contracts. This is also one of the reasons why Texans believe they could not pay Clowney what he thought he was worth, since the team already had Watt on the list.
So what steps could Houston take to lower its wage cap for the 2021 season to make more room for Watson's contract and allow for changes in the off-season? The Texans could grant Watt an extension of the contract to add money and guaranteed years to the deal and, by adding duration, they could spread their success on the ceiling. He still has two years in the contract he signed in 2014, with no money guaranteed. To reduce the maximum number reached, Houston could guarantee the money and add additional years.
Texans will also have to make post-season decisions about Cooks (with no guaranteed money) and Johnson's return (they owed $ 9 million in 2021, $ 2.1 million guaranteed). It also seems unlikely that Houston can afford to re-sign a broad receiver Will Fuller even though he has an excellent – and healthy – 2020 season. He is currently playing with his $ 10.1 million option in the fifth year.
Most teams in this position must rely on refueling, recruiting impact players. For example, the Chiefs are betting on choosing the first round Clyde Edwards-Helaire be another reliable weapon for Mahomes. But because they switched to Tunsil and Stills last August, Texans didn't have a choice in the first round in April and don't have a choice in the first or second round of the 2021 draft.
Jim Kelly says guys like Patrick Mahomes, Deshaun Watson and Lamar Jackson resemble legendary QBs like John Elway, Dan Marino and Boomer Esiason.
Typically, teams can achieve an increase in the salary cap from year to year. In 2020, the number rose $ 10 million.
But what happens if the 2020 season is shortened by the coronavirus pandemic or if games are played in front of empty stadiums, affecting the league's revenue? Teams may be seeing a reduction in the salary cap in 2021, because that number is based on total NFL revenue.
While the limit could certainly be lowered next season, a longtime agent says he believes that because the NFL has another 10 years of labor peace after the 2020 season, that the league will borrow from the future "and, at worst, the 2021 limit will be low. "
This does not mean that the teams will not have cash problems due to the loss of revenue, but the agent suggests that "from the point of view of the limit, it can go up a little, it can be completely the same, but it does not go backwards.
"Because the projections, when they receive that money from TV, are over the limit," he said. "So that they can easily borrow from the future."
The other element of the contract negotiation that took place this off-season is the collective agreement of the NFL, which was approved in March. As part of the CBA, between 2021 and 2023, NFL owners can expand the regular season from 16 to 17 games. Would that mean more revenue for the NFL, so will it affect contracts going forward?
"It should," an agent told ESPN. "If you're at $ 1.6 million and a player is winning $ 100,000 per game, and everything remains the same and a new contract, it should be at $ 1.7 million. It's just fundamental math. So , yes, the new CBA must negotiate more … Seventeen games, this is another recipe game for owners, so why shouldn't the player get it? "
Also included in the CBA is the language that can allow owners and players to earn money from future gaming revenues. Players will share the revenue generated "by operating game-related companies located or physically connected to an NFL stadium", according to the CBA language. The CBA claims that revenue is available through "gambling in any aspect of NFL games, performance of NFL players in NFL games or in any other NFL / club related activity".
While the pandemic can certainly affect how the league contracts, the NFL must remain at a stage of financial growth. Watson will receive his money, either with a long-term contract extension or a shorter one that takes advantage of the money that comes in.
But the Texans used their affordable three-year Watson contract, and after signing a long-term contract, it will become more difficult for Texans to compete for a Super Bowl, something the Chiefs did with Mahomes in their rookie contract.
ESPN's Jeremy Fowler contributed to this story.