Last week Clay Matthews III signed a new 5-year extension with the Packers that made him the highest paid linebacker in the history of the NFL. The press release announced that Matthews was awarded a $66 million extension that averages $13.2 million yearly, which just barely eclipses Dallas Cowboy outside linebacker DeMarcus Ware’s 2009 extension that averaged $13 million yearly. However, as the title has mentioned I personally don’t feel that the contract signed by Matthews is worth it. Furthermore, I’m a little surprised that so many Packers fans are okay with the deal.
What Packers fans should be doing is jumping up and down with joy.
For all intents and purposes, the Packers just got away with “grand theft Matthews”. While initially it looks like Matthews was rewarded handsomely for his services and now can claim to be the highest paid linebacker in NFL history, if you dive deeper into the structure of the deal, it’s pretty obvious that general manager Ted Thompson and lead contract negotiator Russ Ball really got the better end of the bargain.
Point 1 – Look at the guaranteed money: Most football fans recognize that they should take the value of a contract with a grain of salt. Case in point, Donovan McNabb showed exactly how an agent and team can cook the numbers in order to make a terrible contract look like a spectacular one. McNabb’s extension with the Redskins in 2010 was first reported to be worth $70 million ($40 million guaranteed) with escalators pushing it to $85 million. However, as it ultimately turned out, most of the guaranteed money was “not likely to be earned” (as I recall it involved McNabb’s field goal percentage and winning the Super Bowl every year), which in essence meant that McNabb’s actual guaranteed money was worth a piddling $3.5 million if he wasn’t on the Redskins roster past 2010 (naturally he was traded to the Minnesota Vikings before the end of the season). Perhaps the most important point I want to make is that a team’s true interest in a player is best represented by the amount of guaranteed money they offer; players almost always don’t see all the money in their contract and can only count on seeing their guaranteed money.
With that in mind let’s compare Clay Matthews’ guaranteed money with DeMarcus Ware, the linebacker he supplanted to become the highest paid linebacker and Mario Williams, another premier pass rusher (who was/is sort of an outside linebacker), assuming each plays out the first 6 years of their contract.
Matthew’s $32.9 million guarantee pales in comparison to $41.19 million guaranteed to DeMarcus Ware and $59 million guaranteed to Mario Williams. Furthermore it’s important to note the structure of the proration; both Williams and Ware have bonus money coming in throughout the life of their current contracts, however it is interesting to note that the last year of Matthews’ extension only contains guaranteed money should he be on the team (and even then it’s only $1 million), so the Packers could cut Matthews with zero penalty in 2018. Also interesting is that both Ware and Williams managed to get the first two years of their base salary guaranteed as well while Matthews did not.
Point 2 – Look at the 2 year totals: Football is a young man’s sport and nothing drives down the value of a player than age. Just look at the current market; Heisman trophy winner, Super Bowl captain and defensive MVP Charles Woodson is still looking for some interest, let alone a decent contract. It’s therefore logical then that many agents structure their players’ contracts where they get as much money as early as they can. Again this idea boils down to how likely a player is going to earn his money (i.e. not get cut or traded): players are far more likely to get cut near the end of their contract than in the beginning (with one big reason being age), so big dollar amounts early are far more important than big dollar amounts late.
With that in mind lets compare the 2-year cap totals for Matthews, Ware and Williams. Cap numbers are a simple way to measure the value of a player since boils down the complexity and variability of a NFL contract into one number that is vitally important to the all NFL teams. Matthew’s 2-year cap total of $17.8 million is significantly lower than Ware’s $19.7 cap total and pales in comparison to William’s $22.2 million 2-year cap total. And this is perhaps the most important part of the contract, Matthews only catches up to Ware’s contract in the last two years of the contract, where he makes around $10 million yearly, which brings me to my next point.
Point 3 – Predict the contract life: One more complexity of NFL contracts is that often times teams and agents tack on extraneous years in order to boost up the total numbers and make the contract look better than it really is. Take for instance the Packers cutting AJ Hawk in 2011 only to resign him minutes later. The reason for this was that the last year of Hawk’s contract was worth $10 million, which was put in place to force the Packers to either cut or extend Hawk. Obviously, Hawk never lived up to his selection as the 5th overall pick in 2006 draft and the plan backfired a little, but nevertheless it does show that sometimes neither the team, the agent nor the player really expect to play under that year’s contract.
The same could be said about Clay Matthews; I would argue that Matthews shouldn’t expect to see either his 2017 or 2018 salary at it’s current rate. He’ll be over 30 by then and presumably near the tail end of his career. Furthermore, most of his guaranteed money will be paid for which essentially gives him no leverage in the event that the Packers ask him to restructure. I would more realistically peg Matthews’s contract as a 3-year extension worth $44.2 million, which averages to about $11 million yearly with the option to restructure should Matthew’s play continue at a high level.
One other distinct disadvantage is that Matthews plays for a team that actually knows how to control its finances; DeMarcus Ware has now restructured his contract seemingly every year in order to provide some relief from the dumpster fire that is the Cowboys salary cap. The only downside is that by converting his base salary into a prorate bonus is that each year it becomes harder and harder to cut, trade or reduce Ware’s salary because more and more of his contract is guaranteed and would accelerate to the current year should Ware not be on the team. Realistically, Ware will be with the Cowboys for the next couple year no matter what because the Cowboys can’t afford for him not be on the team. The same can’t be said for Matthews, just like AJ Hawk taking a massive pay cut to stay on the team this year, if Matthew’s play begins to dip, Matthews will also likely be asked to take a pay cut in order to stay with the team.
Conclusion: Now with all that being said, I don’t think Clay Matthews is worth his contract, he’s worth more. Hopefully, he stays productive through his career to the point where he ultimately sees every cent of his contract. He’s the foundation of the Packers defense and a player you can build a squad around. The Packers had to have him and they now have him through his prime. Matthews is arguably better than Demarcus Ware and is definitely better than Mario Williams (at least in Buffalo) but isn’t being paid better than either, which brings up an interesting question: the Packers aren’t known to be penny pinchers when it comes to retaining their own star players, so why did Matthews get such a raw deal?
My only explanation is that the relatively flat cap has forced agents and players to take deals considerably lower than what could have gotten in the old CBA. Case in point, while Darrelle Revis getting traded to Tampa Bay made big headlines, what I think was an even bigger story was the fact that no part of Revis’ $96 million salary is guaranteed, so the Buccaneers could cut Revis at any time without any penalty (furthermore, Revis can’t hold out since the Buccaneers can hold his rights without paying him anything indefinitely). My personal feeling is that as long as the cap stays relatively flat, more and more star players are likely to come out with contracts not as rich as they were before, except of course when it comes to quarterbacks. Aaron Rodgers knows quarterbacks are in their own world when it comes to contracts, so I wouldn’t be surprised to see Thompson and Ball come out battered and beaten when they finally lock up the best player in the NFL.
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Thomas Hobbes is a staff writer for Jersey Al’s AllGreenBayPackers.com.
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Nice work Mr. Hobbes. The part that I am missing is the amount that makes up the annual salary – the non guaranteed amount. I am guessing that the yearly cap hit would include all your columns plus this annual amount. Is this spread evenly or higher at the front of the contract?
This is the splits from Over the Cap: http://www.overthecap.com/cap.php?Name=Clay%20Matthews&Position=34OLB&Team=Packers I would say his base salary is actually more heavily spread near the end of his contract, which as I mentioned actually gives Matthews little leverage in 2017 and 2018 since his guaranteed money is minimal at that point.
Thanks. The base salary climbs with the years. This contract, while sizable, is structured well for the Packers
It’s good to know that even when the Packers are paying tons of cash to a player there is an underlying thread of fiscal responsibility in their dealings. Hopefully they can retain some with the soon to be “megadeal” with Mr. Rodgers.
Very nice work Sir. Very Illuminating.
I think Thompsons remembers the hole he had to dig himself out of when he was hired in 2005 so the Packers will probably be fairly fiscally responsible under his tenure. Of course, the Packers are going to be very fiscally irresponsible when it comes to signing Rodgers, but it’s almost a necessary evil; teams bleed money for quarterbacks and that’s likely not to change any time soon.
Great analysis, and nice job with the “teaser” headline!
Thanks, every once in a while even we can put our “literary” hats on 😀
If Matthews stays healthy, he is the best and should be paid accordingly….
I think the real concern isn’t Matthews play now as opposed to when he’s hit 30. Unless he’s happens to have a career as long as Driver or Woodson, chances are he isn’t going to be very good at age 31-32. Nothing against him, that’s just the way the NFL works. The problem is that a lot of his money is coming when he is 30+ and he doesn’t have any protection from the team at that point.
Nicely put
Thanks.
Someone learned how to spin a title somewhere along the line. Nice analysis and very helpful. I learn a little every day…nice to get that done at 10 am so I can spend the rest of my day being a doofus!
Hey we try to do our best, I will say it was fun trying to be as ambiguous as possible in the first paragraph.
Every time I try to understand contracts I get another migraine. Sounds like the Pack did good and me thinks that the contracts that CM3, AR and Raji see are all going to be somewhat interdependent.
Thanks Hobbes.
It’s pretty convoluted, so just look at these two factors: guaranteed money and salary cap number. The higher the number the better the deal for the player, the lower the number the better deal for the team.
Great work, Thomas.
OverTheCap.com also has a nice post on Matthew’s contract in comparison to Ware and Sugg’s contracts. He reaches a similar conclusion about the “protection” and “value” of the contract.
Actually OTC was the first place I saw that really broke down Matthews contract, but they only took it at face value (which is fine considering they don’t cover the primarily cover the Packers nor know their common practices). I would say at face value, OTC is correct that the deal isn’t a groundbreaker but when you add how the Packers operate (most notably by not converting base salaries) you see that the front office actually has a lot of flexibility.
Nice article and great title to suck me in to reading the whole thing (not that I really needed it).
That was the hope, I’m still waiting for someone to not read the whole thing and call me an idiot.
Clay will make more then any other LB during his contract. It may be true that he does not have as much gurientied money. Look at the comerical success he already has had in Green Bay. He now will be entering his prime. He will be the leader of a defense that will be a superbowl contender as long as ARod is the QB. If he took more money to play with a lesser team he would probally earn less in the long run. Mathews signing with the Packers is good for both parties.
I have thought about this point, if you are a star player, would you take less money to be on a good team and hope you recoup your losses in other commercial ventures? Personally, I think it’s a pretty smart call. For instance, if Donald Driver had decided to play another year for a different team, he could probably make $1-2 million, but the amount of endorsements he can probably secure in Wisconsin alone by retiring a Packer is probably worth a lot more than that. I have no idea if that was part of Matthews (or Rodgers) deal, but it is an interesting point.
The Packers biggest problem is injuries and there is a solution which has been written up in, of all places,The Wall Street Journal.
Put simply the Packers hit the weight room but lack in the stretching and conditioning department. The 49ers stretch more than any team and consequently have the fewest preventable injuries – not the broken bones but the torn hamstrings.
I saw that article – very poignant…
Here the link for any who are interested: http://online.wsj.com/article/SB10001424127887324734904578243930799732200.html
I would disagree with the fact that the 49ers are less injury prone because they stretch. For one, Football Outsiders did a analysis a while ago showing that there is no correlation in injuries, essentially that means it’s random and some years, teams get hit hard (2010, 2012) and sometimes not so hard (2011). Secondly, the Packers do a ton of stretching from what I’ve read, Rodgers talks about stretching a lot on his Tuesdays with Aaron podcast and presumably he isn’t the only person on the team doing them.
“Matthew’s 2-year cap total of $17.8 million is significantly lower than Ware’s $19.7 cap total and pales in comparison to William’s $22.2 million 2-year cap total.”
HMMM…it would appear some embezzeling has taken place…I keep adding the two year totals for CM3…
$5.690 mill year one
$10.1 mill year two
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$15.79 mill total
where does the $17.79 mill come from…
A nice slice of the pie for you MR Hobbs..lol
Haha, I wish!
These are the numbers I am using: http://www.overthecap.com/cap.php?Name=Clay%20Matthews&Position=34OLB&Team=Packers
All I did was add the Matthews cap numbers for 2013 and 2014 together. I guess with your numbers, his cap hit is even lower, which makes it that much better of a deal for the front office.
I see the missing money…$1 mill in base salary not in the graph you supplied.
idk how you can call it a raw deal when matthews agreed to it. just because some other team overpaid for a player doesn’t mean that suddenly that is the new benchmark across the whole league. now if matthews was playing for the bills or cowboys, he could argue to the management that they should pay him more than williams or ware, but what he is worth to the packers is different. you’re comparing apples and oranges. different teams are in different financial situations and have different leverages in negotiation. one player being overpaid does not automatically mean everyone else’s salary needs to go up to match.
Sure, but teams and agents always use previously contracts as benchmarks and starting points in negotiations. For instance, Matthews’ camp was obviously using DeMarcus Ware’s contract as a benchmark, hence why Matthews is making only slightly more than Ware. Furthermore, often times its important to players that they are the highest paid player in their position, Matthews dodged around that question during his press conference but you could tell it was important to him. Finally, just because the Packers didn’t overpay for Matthews doesn’t mean that another team wouldn’t. I’m sure if Matthews had held out, maybe gotten the tag and then been a unrestricted free agent, he would have gotten a lot more money from some other team and Matthews knows that, but he decided the best place for him was in Green Bay
That’s what I’m trying to say. His value is different in different places. When both sides agree to a contract, there is nothing “raw” about it. I’m sure they do reference previous contracts in their negotiations, but it’s not just one contract they look at. They look at them all. What is the average salary for an nfl olb? And what is the average ABILITY of an nfl olb? How much does Player A’s ability differ from that average? So what is the average production per dollar? The quantitative difference in ability matters. So sure, one overpaid player will affect the equation (average), but that doesn’t necessarily mean all future contracts must treat the outlier as the baseline. Sure agents will say to only look at the outlier if it favors their arguement, but that’s because they want to get as much money as possible for their client, and this themselves. However it takes 2 sides to determine true value. Fans need to look at the whole picture and not just what an agent or PR guy says about making a player the highest paid. That’s just for appearance’s sake
They also, as a player, have to consider getting a career ending injury in their final year of their contract. And the team has to worry about a career ending injury after the extension. Does he have an injury clause that affects his guaranteed money?
They didn’t report anything, but that doesn’t mean there isn’t. Prudently I would say that the Packers would have insisted based on Matthews’ recurrent hamstring injury, but that’s probably not as big of a risk as a reconstructed ACL or concussion history.
Clay Matthews is great!that is very good news for all packers fans!good luck packers!!!!!
You have a very interesting name….