Explaining (and debunking) a cap-percentage deal

Salary cap logoEveryone has a take on Russell Wilson and his contract. And some of them are pretty chuckleheaded.

Like the ESPN guys (and many fans) talking about Seattle trading Wilson.

Or the local radio guy who compared Wilson to redneck NBA thief Clay Bennett — basically calling the quarterback a liar who is trying to make the team look bad and really wants to play on the tag until the new CBA kicks in.

Or the lawyer turned sensationalist NFL blogger whose latest conspiracy theory has Wilson wanting to play on the tag for two years and then leave Seattle. Or (just in case that one is wrong) the blogger also has the QB trying to push a new contract tactic.

We all know Wilson wants to play his whole career in Seattle — he has said it many times — so we’ll ignore those first three lame takes. But let’s explain that contract scheme before we dismiss it.

Some NFL players in past negotiations have tried to get deals tied to a salary cap percentage, and Mike Florio suggests Wilson could try to do that (never mind the fact that we already know Wilson is not trying to do that).

The argument for a salary based on escalating percentages is that it would guard against the salary cap spiking by more than the $10 million a year it has been averaging the past six years (i.e., Wilson’s entire career).

Assuming the salary cap continues its trajectory through 2023, a standard contract for $140 million, with a $60 million signing bonus, could result in cap hits of $32 million, $35 million, $36 million and $37 million, which would take up 16 percent, 17.5 percent, 16.4 percent and 16.1 percent of the cap. (Wilson takes up 13.4 percent this year — sixth behind Matthew Stafford’s league-high 15.7 percent.)

Now compare that to a cap-based deal that escalates from 15 percent to 18 percent, using those same league cap figures: The salaries/cap hits would be $30 million, $33.6 million, $37.4 million, $41.4 million. So a minimum of $142.4 million over four years — basically the same as the standard deal.

But, if the cap spiked in a given year, Wilson would benefit. Say gambling money and the new CBA give a big boost starting in 2022 and that cap skyrockets to $240 million instead of $220 million: Wilson would make $40.8 million that year and maybe something like $46 million in 2023. So, in that case, maybe his four-year deal would end up worth about $150 million — $10 million more than the standard deal would have paid him.

That’s what Florio is pushing (when he isn’t saying Wilson wants to play tag and leave in 2022). But there is no way the Hawks would guarantee that cap-percentage contract. And it also wouldn’t do anything to stop other quarterbacks from getting richer deals. A bunch of young QBs will be up for extensions in 2020 and 2021, and some will surpass even the cap-percentage contract.

Not that we have to really consider that kind of deal anyway. We already know, via insider Jake Heaps, that Wilson wants $35 million a year and somewhere between 63 percent and 100 percent fully guaranteed. So he’s obviously not thinking of this cap-percentage deal. He just wants to jump to the top — for now — with a fairly standard contract.

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One thought on “Explaining (and debunking) a cap-percentage deal”

  1. As I do the “get up every morning and go to work each day” thing today, I’ll contemplate the injustice of someone else getting paid to compare Russell Wilson with Clay Bennett. It doesn’t even make sense — it’s like comparing a rock to a snake. I get that speculation is necessarily part of these guys’ stock and trade, but does it have to be blather?

    Like

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