25

June

What is fair value for Eddie Lacy?

Eddie Lacy Pro Bowl

How much would you pay this guy?

Packers fans have been quipping that the running back is the most fungible position in the NFL; I’ve said it, my colleagues here on the blog have said it and tons of you have said it in your comments (yes we do read your comments).  In truth, it’s an easy thing for Packers fans to say simply because the Packers aren’t the type of team that revolves around running the ball; with Mike McCarthy at the helm, Aaron Rodgers behind center and Ted Thompson on top of the front office, the Packer’s have been a pass-first, pass-second, run as an afterthought type of franchise.

On the flip side, ask any Minnesota Vikings fans what they think about the running game and I’m sure you’ll get a completely different response.  Outside of a miraculous 2009 season, there hasn’t been much for Vikings fans to hang their hat on; sure the defense has been occasionally good but their football identity is running the ball with Adrian Peterson.  However Peterson is a once in a generation type of player and the simple fact is that running backs are not very valuable in the NFL; they’re production has plateaued lower than their receiving counterparts, the massive toll playing the position takes on their body and future production and the shift from the workhorse back to the running back by committee approach means you don’t need to find a running back that can do it all.  As a result, less and less running backs are being drafted, especially in the first round.

Packer’s fans might just have to start rethinking about the value of the running back position as the Packers might have a real star on their roster with Eddie Lacy in green and gold.  While Lacy was a godsend for the Packers last year and was essentially the offense while Aaron Rodgers recovered from his broken clavicle, Lacy was paid a mere $405,000 for perhaps the best season a running back has had since Ahman Green in his heyday. Keep in mind this is after winning rookie of the year honors; when Charles Woodson won defensive player of the year honors in 2010, the Packers responded by giving him a huge increase in pay even though he still had plenty of years left on his contract.

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26

March

Packers Contracts, the Salary Cap, and More – Part 5: B.J. Raji and the Escalator

packers_piggy_bankOne of the hardest things for the average fan to comprehend is how NFL contracts work and how they apply to a team’s salary cap. There are many complicated elements, rules, and exceptions that can be hard to sort out. In this series, my goal is to help you better understand how this whole system works, plus what it means to the Green Bay Packers’ current salary cap and contract concerns.

Before reading, make sure to check out the previous article(s) in the series:

Our fifth article focuses on B.J. Raji and the use of “escalators” in contract negotiations. Yesterday we detailed how “incentives” work, and there are some similarities between those and escalators. However, there is a major difference that gives teams a lot of financial power when it comes to future roster decisions.

As should be common knowledge, B.J. Raji was drafted in the same year as Clay Matthews (2009), though Raji was a higher first-round pick. If you compare his contract to Matthews’ from yesterday, you’ll notice some obvious differences outside of the generally larger dollar amounts. The difference I want to note today is how Raji’s contract is boosted with escalators, while Matthews is boosted with incentives. Take a look:

B.J. Raji NFL Contract, 2009-2013

 

B.J. Raji’s base salaries in 2012 and 2013 have the possibility of being escalated by $1.2 million and $2.35 million, respectively. So what exactly is an escalator? It’s a clause in the contract that, when triggered, increases the salary of the player. The triggers can be anything from playing time to performance/statistics-based benchmarks. In this case, it is very much like an incentive. If Player A accomplishes X, then he gets paid more.

The big difference, though, is that escalated money goes into effect in a future year, while the incentive gets paid out immediately. So in B.J. Raji’s case, his escalator of $1.2 million had to be triggered prior to 2012, but the money wasn’t added to his salary until that year.

25

March

Packers Contracts, the Salary Cap, and More – Part 4: Clay Matthews and Incentives

packers_piggy_bankOne of the hardest things for the average fan to comprehend is how NFL contracts work and how they apply to a team’s salary cap. There are many complicated elements, rules, and exceptions that can be hard to sort out. In this series, my goal is to help you better understand how this whole system works, plus what it means to the Green Bay Packers’ current salary cap and contract concerns.

Before reading, make sure to check out the previous article(s) in the series:

Our fourth article focuses on incentives, and although we’re going to use Clay Matthews’ contract as an example, the discussion will be oriented in a more general sense. This is something most people should have a simple understanding of, but there are some details on how these incentives are paid out and applied to the salary cap that might be new knowledge.

When Clay Matthews was drafted by the Packers in 2009, the new CBA and its “rookie salary scale” were not in existence. This allowed agents to negotiate larger contracts, especially for the top draft picks. In order to find some middle ground, teams would work in “incentive” pay to ensure they were getting their money’s worth. Even the top picks are a risk, so teams want to avoid being financially handcuffed to “busts.”

The rookie compensation rules in the new CBA have actually driven away these incentive-laden contracts, but that’s a conversation for later. Teams still use incentives in many of their contracts as a way to motivate player performance. Before we continue, though, let’s take a quick look at Clay Matthews’ contract details:

Clay Matthews NFL Contract, 2009-2013

 

Notice how the incentives – worth a total of $3.275 million – aren’t figured into the charted cap numbers. It’s one of those contract details that don’t get pushed into the basic cap numbers for two reasons: (1) they have to be earned based on performance, and (2) most incentive benchmarks aren’t released to the media. Some players’ incentive details have been published, but usually they’re in general terms. Only noteworthy benchmarks tend to get released in any detail.

26

April

NFL Draft Economics: Draft Trading and the Rookie Wage Scale

How much would trading up for a player like Clay Matthews cost the Packers in 2012?

Ted Thompson and the Green Bay Packers have a lot of options in the 2012 NFL Draft with 12 overall selections, and they are probably going to need them with some of the defensive holes they need to fill.

Our own “Jersey” Al Bracco spent time presenting some First and Second Round trade-up scenarios that could possibly occur, and Thomas Hobbes looked into Thompson’s trading history in relationship to the Trade Value Chart (TVC).

A lot of people are wondering, though, does the old TVC still apply?

This will be the first draft under the latest Collective Bargaining Agreement (CBA) between the NFL and NFLPA, and it comes with a shiny new set of rules for a rookie wage scale. Though we haven’t had a draft under these restrictions on pay, the 2011 rookie class did feel the effects of it when they were finally signed.

Below is a comparison of the contracted salaries of the top 10 picks in the 2010 and 2011 NFL Drafts. The numbers shown are in millions of dollars, and for simplicity in numbers, only the guaranteed amount has been recorded. It’s not a perfect barometer of the wage scale’s effects, but it should give you a general idea of what has happened:

SEL #

2010 Contract

2011 Contract

% Decrease

1

$50.00

$22.00

56.00%

2

$40.00

$21.00

47.50%

3

$35.00

$20.40

41.71%

4

$36.75

$19.60

46.67%

5

$34.00

$18.50

45.59%

6

$29.00

$16.20

44.14%

7

$26.00

$14.40

44.62%

8

$23.00

$12.00

47.83%

9

$20.80

$12.50

39.90%

10

$17.50

$12.00

31.43%

 

As for how this effects the draft, there are three basic things that could happen: (1) it will cost more to trade up, (2) it will cost less to trade up, or (3) there will be no significant change in trading values.

At first glance, it would seem the cost for acquiring a higher draft pick should go down. The players are being paid less money, which on the surface might seem like they’re worth less. (No, not “worthless.”) This, of course, is not the case at all.

Let’s go back to our high school economics class and the Laws of Supply and Demand.

26

July

The NFL Lockout is Finally Over: What Roger Goodell was Really Thinking

NFL commissioner Roger Goodell has to be feeling good about his sport as the NFL lockout ends.

Roger Goodell was asked today if there were any damages from the NFL lockout that need to be repaired. He said:

“Well, I would say from the Commissioner’s perspective, we know what we did to frustrate our fans over the last several months. They want football and our job is to give them football. We think that through a 10-year agreement here, we’ve secured the future of the game to ensure that pledge to bring great football to our fans. I think we have some work to do though to make sure they understand that we are sorry for the frustration we put them through over the last six months, but our commitment is to bring them better football going forward. I think we ought to make sure that we understand that our bond with our fans is probably the primary issue that all of us have to keep focused on, whether you’re a player, or you’re an owner or you’re the Commissioner.”

While Goodell was giving this beautifully crafted and politically correct answer, here’s what he was really thinking:

“Hell no there aren’t any damages! Are you freakin’ kidding me?! We’re the NFL, not the NBA, MLB or NHL. Twitter literally melted into a pile of social networking goo once the lockout ended? ESPN basically threw a party live on the air. The NFL Network is covering this news conference like someone just brokered a peace deal in the Middle East. Fans are more excited for the upcoming football season than for any other season in our league’s history.

And do you know why? Because this lockout forced everyone to skip the boring parts of the offseason. How great is it that we didn’t have to endure a summer of free-agent speculation or BS stories from minicamps about how this player or that player looks really good running around in shorts and a tank top? Wasn’t it nice not having to read about how Albert Haynesworth or some other criminal in shoulder pads appears “focused” this year and wants to “put the past behind him?” We even managed to keep Brett Favre quiet until I gave him the go-ahead to start his unretirement rumors on Saturday night.

1

July

What a New CBA Could Mean for the Green Bay Packers

There has been a wave of cautious optimism about the CBA negotiation over the last few weeks. Oowners met as a group last week to get everyone on the same page as to how the negotiations were going and followed that up with another round of talks with the players.  While both sides are under a court-mandated blackout, reports have trickled out that there wasn’t much resistance from ownership and while the players don’t love the new deal, they will live with it.

Follow that up with reports coming out that another round of talks will be held in Boston/Minnesota and it’s understandable that NFL fans are happy to see significant progress being made.  Amidst all this optimism, some aspects of the new deal have been leaked out.  Will this change the way the Packers do business?

  • Players will earn somewhere around 48% of revenue: Perhaps the biggest roadblock between the owners and the players is how much of the pie everyone gets.
    • Effect on the league: Some teams will definitely be hit harder than other teams; while Jerry Jones and the Cowboys probably won’t be affected that much due to their massive profit margins, small market teams such as the Jacksonville Jaguars could feel the financial pressure of keeping up with the rest of the league.
    • Effect on the Packers: As a community owned/non-profit organization, the Packers fiscal responsibilities have always been a little different from the rest of the league.  Other teams have owners who can move profits and assets to other ventures or simply take profits for themselves; for instance there have been reports of the Glazer family using the profits from the Tampa Bay Buccaneers to cover for the financially struggling Manchester United, which is great for the Glazer family but terrible for Bucs fans.  The Packers on the other hand by default have to put all their profits back into the team or into charities.
  • The cap floor will be higher: There are rumors that teams will be required to spend somewhere in the 90-95% of their salary cap every year.  Salary Cap calculations are also to be simplified with less “dead money” contributing to the cap.
    • Effect on the league: Several notorious penny-pinching teams such as Carolina Panthers are going to have to open their checkbooks in order to get above the salary cap floor.  Again smaller market teams may feel more financial stress with having to put so much money into player’s salaries.