Sunday I took a look at how much cap space the Seattle Seahawks will need in order to sign the members of their 2020 draft class. While the actual amount of cap space the team will need is subject to change depending on how many times John Schneider and Pete Carroll trade back in order to pick up extra picks, what we saw on Sunday was how even smaller moves back in the draft can have noticeable differences in cap hits.
With the 2020 salary cap set at $198.2M, the difference between needing $1.5M and $2M to sign draft picks is not likely to make or break a team’s season. As commenter Skavage noted in the Sunday post,
Thanks for sharing that, I really liked seeing some “real” numbers to better understand things. It’s an especially good note for us to better understand why trading down can (and does) make such good sense. The [cap hit] difference between 1:27 and 2:35 is pretty amazing, especially considering how much the talent drops off from say 1:15 to 1:25-ish, while the talent drop off from late 1 to early 2 is tiny imo.
However, the benefits of trading down on Day 1 and Day 2 go beyond just the addition of draft capital and lower cap hits, as players drafted later also have lower guarantees in their contracts. For example, in 2018 the Seahawks initially held pick 1.18, but traded down with the Green Bay Packers to pick 1.27. Just to show the cap savings of moving down four spots, here are the total amounts owed to Jaire Alexander, who the Packers selected with the pick, and Rashaad Penny.
- Alexander: $12.05M (Cap hits by year of $2.19M, $2.74M, $3.29M and $3.83M)
- Penny: $10.7M (Cap hits by year of $1.96M, $1.45M, $2.94M and $3.43M)
Now, saving $1.35M over the life of a four year contract is not all that big of a deal for an NFL team. Even if a team traded down to save $1.35M every year in the draft, over the lifespan of a four year rookie contract the team would save barely $5M. Yes, that’s $5M extra the team has to spend, and everything else being equal it’s better to have more cap space than less, but even $5M or $6M isn’t likely to materially alter the future of a franchise.
However, where the difference between picking 18th and picking 27th in the first round could prove to be significant is when it comes to guarantees. Getting back to the comparison of Penny and Alexander’s rookie contracts, here is the difference in guaranteed money between what the two received.
- Alexander: $12.05M
- Penny: $9.397M
In short, Alexander’s entire contract is fully guaranteed, while Penny’s has a small amount of money that is not guaranteed in the fourth year. So, if either player were to suffer an injury that could impact their ability to play going forward, the Packers are on the hook for the full amount of money owed to Alexander. In contrast, because later picks have lower guarantees in their contracts, if for some reason the team decides to move on from Penny after 2020, they can do so and free up $1.37M of cap space in 2021. Again, $1.37M is not a whole lot, but it’s more than nothing, which is the point.
For an even greater example of this, in 2019 the Seahawks originally held pick 1.21, which they traded to the Packers for 1.30. From there they traded 1.30 to the New York Giants for pick 2.37 and two other draft picks. Then they sent pick 2.37 to the Carolina Panthers in moving back to 2.47, where they finally selected Marquise Blair. This is not to suggest that the team was considering taking Blair at 21, but this is an excellent opportunity to lay out the differences in guarantees between the middle of the first round and the middle of the second round. So, looking at the contracts for the players taken with these four picks, they are as follows:
- Darnell Savage (1.21): $12.52M (Cap hits of $2.28M, $2.84M, $3.41M and $3.98M)
- Deandre Baker (1.30): $10.53M (Cap hits of $1.91M, $2.39M, $2.87M and $3.35M)
- Greg Little (2.37): $7.64M (Cap hits of $1.39M, $1.74M, $2.08M and $2.43M)
- Marquise Blair (2.47): $6.24M (Cap hits of $1.13M, $1.42M, $1.70M and $1.98M)
That’s a drop of more than 50% from Savage at 1.21 to Blair at 2.47, and that’s before considering the difference in guarantees. Here is how much of the contracts of each of those players was fully guaranteed at signing:
- Savage: $12.52M of $12.52M (100%)
- Baker: $9.50M of $10.53M (90.3%)
- Little: $5.01M of $7.64M (65.6%)
- Blair: $3.83M of $6.24M (61.4%)
So, in moving down from 1.21 to 2.47 the Seahawks not only cut their salary cap obligations over the life of the contract in half, they reduced their guarantee obligations by 69.41%. In short, they not only gained additional draft picks and saved cap space, they increased their future flexibility as well by significantly reducing the amount of guaranteed money they had to give to the player drafted. Now, of course no team wants to imagine that its Day 1 or Day 2 selection will not pan out, leading to the team to take advantage of any cap savings offered by moving on. However, the draft is a crap shoot and reducing risk when it comes to players who have never played a single snap in the NFL seems wise.