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If I Were John and Pete (Part Five)

Seattle needs more cap space! It’s time to look at contracts.

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Pete Carroll and John Schneider at Super Bowl XLVIII - Seattle Seahawks v Denver Broncos Photo by Kevin C. Cox/Getty Images

On July 25th, 2020, Seattle made a trade with the New York Jets that essentially put the organization “ALL IN” on trying to win the Super Bowl.

Debate immediately ensued about the price (two R1 picks, an R3, and a player) versus the return (a player and an R4). That debate continued throughout the season.

Regardless of how anyone views the move, the Seahawks losing to the Rams in the wild card round means that Seattle’s gamble failed; that the Seahawks, as a team, failed.

Entering the offseason with 35 pending free agents and with only one pick over the first two days of the draft, the Seahawks find themselves in a very precarious position.

With no easy answers.

Even without the salary cap dropping by more than $20M, Seattle’s offseason would have been challenging. As is, “challenging” would be an improvement.

It’s time for the front office to get to work!

NOTE: Originally, Part Five of this series was going to look at free agency (and the draft) while Part Six took a look at possible contract extensions. The order of those installments has now been reversed.

Also, for those that are interested, here are links for the previous installments in this series: Part One, Part Two, Part Three, and Part Four.



Seattle’s current cap space

Depending on where you look, whom you believe, and how the numbers are calculated, the amount that Seattle has available to spend this offseason is somewhere between $4,950,729 (OverTheCap) and $14,449,004 (Spotrac).

Confused? You are not alone!

The good news is that the actual number doesn’t really matter right now, because:

  1. The NFL hasn’t announced how much the 2021 salary cap is yet; and
  2. For this series, the assumption is that Seattle is starting out with only $5M in cap space. If it ends up being more, great!

The bad news is that Seattle only has 47 players under contract right now. And the list is not exactly “inspiring.”

If I were John and Pete, I would be trying to free up a boatload of money.

Trading players is an option, as is releasing players outright. However, I think that Seattle can free up about $40M in cap space by signing contract extensions with 12 players; most of whom have well-defined roles going forward.

NOTE: This article assumes that most of the FG community understands the “basics” of NFL contracts (base salary, APY, signing bonuses, etc.). For those that do not and/or those that want to learn more, there is a “Bonus Coverage” section at the end of the article that covers this.



The 12 Seahawks to discuss extensions with

Before doing an extensive analysis of the various contracts, this list started with the player Seattle acquired on July 25th. That is no longer the case. Mr. Adams is now #2.

He is followed by Tyler Lockett, Jarran Reed, Tre Flowers, and Rashaad Penny.

Duane Brown and Brandon Shell are next, followed by Bobby Wagner, Quandre Diggs, D.J. Reed, and Michael Dickson.

But the first player on the list is CARLOS DUNLAP.


Timing is everything

With many of these contracts, the timing of the extension is somewhat critical.

In one case, there is a sizeable roster bonus due on March 21st. For the others, an inability to reach agreement on an extension might mean the player ends up on the trading block - or is released outright.

NOTE: Most, but not all, of the contract information cited in this article is from OverTheCap.com.

Also, in almost every case, the proposed contract is the MAXIMUM that I would offer the player. As is typically the case, the initial offer would probably be lower.


The one player Seattle needs to meet with IMMEDIATELY

CARLOS DUNLAP

The reason for the urgency with Mr. Dunlap is that there is a $3,468,750 roster bonus due on March 21st (the 5th day of the new league year). Until then, there is ZERO dead money on his contract. Thus, both sides have motivation to get a deal done.

  • The Offer: A new 3-year, $27M contract.
  • Bonuses and Guarantees: $9M at signing, $11M guaranteed.
  • 2021’s Contract Numbers: $2M base, $3M prorated bonus, $5M cap hit.

2021 Cap Savings: $9,037,500 ($14,037,500 if traded or released)

Proposed Contract Extension for Carlos Dunlap


Three ticking clocks

This group includes Jamal Adams, Tyler Lockett, and Jarran Reed. Each is under contract for 2021, but all 3 will be free agents in 2022 if they don’t sign extensions.

If I were John and Pete, I would not be willing to let any of the three leave via free agency. Thus, there is some urgency.

But there is also a cash-flow issue. Between them, these 3 players have a cap hit of $38.81M in 2021. One way or another, that number has to come down - way, way down.


JAMAL ADAMS (aka The Prez)

The situation with Jamal Adams could easily be a 5,000-word article on its own, but for now it comes down to this:

The Seahawks did NOT invest the draft capital it took to get Adams just to let him walk, or to trade him away after a season or two. Pete wants Jamal to be a cornerstone of Seattle’s next great defense and that means making this work.

  • The Offer: 4 years, $66M (5 years, $75.86M overall).
  • Bonuses and Guarantees: $25M at signing, just shy of $35M guaranteed.
  • 2021’s Contract Numbers: $1.86M base, $5M prorated bonus, $6.86M cap hit.

2021 Cap Savings: $3M

Proposed Contract Extension for Jamal Adams

NOTE: In Part Two of this series, I said that I wouldn’t be restructuring any contracts but that I would be working on extensions with certain players. As it turns out, extending a contract without restructuring the existing year(s) is sort of a nonstarter - especially in a year when the salary cap decreases.

Also, Seattle has historically shied away from extensions that are longer than 4 years which is why the offer for Jamal Adams isn’t 6 years, $100M.


TYLER LOCKETT (aka NoE)

Seattle’s longest-tenured wide receiver is currently slated to have the 10th highest cap hit of any wide receiver in the league in 2021 after his 100-catch, 1,054-yard, 10-touchdown performance in 2020 triggered $1.2M in contract incentives.

If I were John and Pete, I would WANT to offer Tyler whatever it took to keep him in Seattle. Unfortunately, there ARE limits to what I could comfortably offer him.

  • The Offer: 4 years, $52M (5 years, $66.95M overall).
  • Bonuses and Guarantees: $15M at signing, $25.2M guaranteed.
  • 2021’s Contract Numbers: $2M base + $5.25M prorated bonus + $500,000 roster bonus + $1.2M from earned incentives = $8.95M cap hit.

2021 Cap Savings: $6M

Proposed Contract Extension for Tyler Lockett

WORTH NOTING: I would be talking to Tyler before trading Wilson and Metcalf. Hopefully, NoE signs the extension. If not, there’s a decision to be made that I do NOT want to have to make:

Do we play the 2021 season with Lockett’s $14.95M cap hit or trade him for a Day Two pick and “save” $12.7M?

(insert Jeopardy theme music)


JARRAN REED

As a fan, I questioned the contract that Reed signed last March. If I were John and Pete, this offseason would afford me a chance to correct it.

  • The Offer: A take-it-or-leave-it offer that adds 4 years and $29M to his current contract, making it 5 years, $43M overall.
  • Bonuses and Guarantees: $10M at signing, 2021 fully guaranteed; 2022 base salary guaranteed with Pro Bowl nomination or 12+ sacks in 2021.
  • 2021’s Contract Numbers: $1.325M base + $7M prorated bonus + $425,000 roster bonus + $250,000 workout bonus = $9M cap hit.

2021 Cap Savings: $5M ($9M if traded or released)

Proposed Contract Extension for Jarran Reed


Some decisions are easier than others

The next two players that I am sitting down with are Tre Flowers and Rashaad Penny. Unlike the four players ahead of them, neither Flowers nor Penny represent what I would consider “significant” cap hits in 2021. No, these two represent something else.


TRE FLOWERS

Mr. Flowers earned an increase in his 2021 salary by triggering what’s known as a Proven Performance Escalator. (JPG provides an excellent explanation of that here.)

At the <$1M he was scheduled to make, Flowers would have represented depth. At $2.183M, he almost needs to be a starter, which . . .

NO!

Depth has value though; especially when the player knows your system and OTAs are likely to be virtual again in 2021.

  • The Offer: Something of a “prove-it” deal: 3-years, $3.75M with incentives that can bump it up to 3 years, $9M.
  • Bonuses and Guarantees: No signing bonus, only the base salary in 2021 is guaranteed.
  • 2021’s Contract Numbers: $1M base, $250,000 roster bonus, $1.25M cap hit. Additional $1.75M in incentives.

2021 Cap Savings: $1,257,681 ($2,108,319 if traded or released)

Proposed Contract Extension for Tre Flowers


RASHAAD PENNY

A player’s greatest ability is AVAILability. For now, I will leave it at that.

  • The Offer: A 3-year extension that is heavily reliant on Penny playing - and on him reaching his incentives. Worst case: 1 year, $2.5M. Best case: 4 years, $16.5M.
  • Bonuses and Guarantees: No signing bonus, $580,000 guaranteed - but only because it’s part of his existing contract.
  • 2021’s Contract Numbers: $1M base, $1,477,352 prorated bonus (a remnant from his rookie contract), $2,447,352 cap hit. Additional $2M in incentives. No dead money remains when the season ends.

2021 Cap Savings: $948,014 ($1,368,014 if traded or released)

Proposed Contract Extension for Rashaad Penny


Two players to talk to after the draft

If I were John and Pete, I would have an interest in extending both of my offensive tackles.

The decision would, of course, involve discussions with the new Offensive Coordinator (Shane Waldron), the new Run Game Coordinator (Andy Dickerson), and the Offensive Line Coach (Mike Solari).

But, from a timing perspective, I would wait until after the draft to talk to these 2 players - just in case the situation regarding Seattle’s “need” for either of them changes.


DUANE BROWN

The 2017 trade that brought Duane Brown to Seattle, later amended, is arguably one of the best trades in Seahawks history. He is a Pro Bowl-caliber WARRIOR. But at 36 years old and with a $13.35M cap hit in 2021, there’s a decision to make.

  • The Offer: 2-year, $20M extension - with a void year (3 years, $33M overall).
  • Bonuses and Guarantees: $8M of 2021 base pay converted to a signing bonus; $15M guaranteed at signing.
  • 2021’s Contract Numbers: $2M base, $4M prorated bonus, $1M roster bonus, $7M cap hit.

2021 Cap Savings: $6.35M ($11.35M if traded or released)

Proposed Contract Extension for Duane Brown


BRANDON SHELL

Seattle’s starting right tackle is 29 and has a $5.35M cap hit in 2021. If I were John and Pete, I would rely on my staff and trust their opinions: If they think Shell is “a keeper” then I wouldn’t disagree.

NOTE: For me, personally, Shell passed “the eye test” in 2021 and helped move Seattle past the Germain Ifedi experience. He stays.

  • The Offer: 4 years, $24.65M (5 years, $30M overall).
  • Bonuses and Guarantees: $7.5M at signing, $9M guaranteed.
  • 2021’s Contract Numbers: $1.5M base, $5.5M cap hit.

2021 Cap Savings: N/A ($3.35M if traded or released)

Proposed Contract Extension for Brandon Shell


Four more players in line for extensions - timing TBD

These last four players are safely ensconced in their roles and are absolutely going to be with the team in 2021 and beyond. However, for various reasons, each “needs” an extension.


BOBBY WAGNER (aka Bwagz)

This one is symbolic.

  • The Offer: A 1-year, $12M extension - with TWO void years (3 years, $49.5M overall).
  • Bonuses and Guarantees: $10M of Bobby’s base salary in 2021 + $10M from 2022 is converted to a signing bonus ($20M total).
  • 2021’s Contract Numbers: $3.15M base, $7.75M prorated bonus, $250,000 roster bonus, $11.15M cap hit.

2021 Cap Savings: $6M (plus another $6M in 2022; $12M total)

Proposed Contract Extension for Bobby Wagner

NOTE: Symbolically, the $12M extension would become guaranteed on the 12th day of the 2023 league year which will be Bobby’s 12th year in the league.


QUANDRE DIGGS

Quandre Diggs came to Seattle in the middle of the 2019 season. He brought Detroit’s 7th round pick in this year’s draft with him. The price? A 2020 fifth-round pick.

Absolutely no clue what Detroit was thinking, but if I were John and Pete, making sure Mr. Diggs continues his career in Seattle is a priority.

  • The Offer: 4 years, $26M (5 years, $32.15M overall).
  • Bonuses and Guarantees: $10M at signing, $15.15M guaranteed.
  • 2021’s Contract Numbers: $1.65M base, $2M prorated bonus, $3.65M cap hit.

2021 Cap Savings: $2.5M

Proposed Contract Extension for Quandre Diggs

D.J. REED

If I were John and Pete, I would already have D.J. Reed penciled in as my LCB / CB2 heading into the 2021 season. Ain’t no way Seattle risks losing him a year from now.

  • The Offer: A new 5-year, $15M contract. Additional $2.5M in incentives (max value of $17.5M over 5 years).
  • Bonuses and Guarantees: $5M at signing, $7.5M guaranteed.
  • 2021’s Contract Numbers: $1M base, $1M prorated bonus, $2M cap hit. Additional $500,000 in incentives.

2021 Cap Savings: N/A

**Seattle actually loses $1,080,000 in cap space with this one. But this contract isn’t about saving money on the 2021 cap - it’s about rewarding a player that had a solid 2020 season and appears to have locked down his spot on the defense going forward.

Proposed Contract Extension for D.J. Reed


MICHAEL DICKSON

One of Seattle’s most efficient “weapons” the last 3 seasons, Mr. Dickson has earned an extension that keeps him in the Pacific Northwest for years to come.

  • The Offer: A new 5-year, $14M contract with $1.25M in additional incentives (max value of $15.25M over 5 years).
  • Bonuses and Guarantees: $3M at signing, $6M guaranteed.
  • 2021’s Contract Numbers: $1.384M base, $600,000 prorated bonus, $1.984M cap hit. Additional $250,000 in incentives.

2021 Cap Savings: $1.4M

Proposed Contract Extension for Michael Dickson


Seattle’s “new” cap space

Phew . . . that was a lot of work. But, assuming all 12 players sign the proposed contracts, the front office just created an additional $40,263,195 in cap space.

And it could be more if one or two players are traded or released instead of being extended. For example, Seattle would free up an additional $5M if Duane Brown’s services were no longer required.

Now it’s time to start thinking about free agency!

Oh, wait . . .

Because of the timing of the extensions, not all $40M in “new” cap space is going to be available when free agency starts.

Given the order of the extensions, here is what would be available when:

IN THE EARLY DAYS OF FREE AGENCY

Signing extensions with Carlos Dunlap, Jamal Adams, Tyler Lockett, Jarran Reed, Tre Flowers, and Rashaad Penny decreases their combined 2021 cap hit by $25,243,195.

That’s money that can be used to sign free agents starting on March 17th.

SHORTLY AFTER THE DRAFT

Extending Duane Brown and Brandon Shell would free up $6.2M in 2021. However, drafting a Week 1 starter probably changes that number a bit.

POST-JUNE 1st

Not going to spend any time here; just acknowledging that Part Three of this series gave the Seahawks $19M in “savings” for 2021 and that the funds will be available on June 2nd.

AT SOME POINT

Signing the proposed extensions with Bobby Wagner (symbolic), Quandre Diggs, and Michael Dickson would free up $9.9M. Rewarding D.J. Reed with a new contract drop that to $8.82M.

This is money Seattle could use to “fill out the roster” throughout the offseason.



Bonus coverage: An overview of NFL contracts

NFL contracts can be extremely complicated. Fortunately, there are only a handful of contract-related concepts that need to be covered to understand the moves that are outlined in this article.

  • APY: This is the measure by which most contracts are evaluated. APY = Average Per Year. This is most often used to evaluate the “new” money on a contract or the total value of the contract.

  • Base Salary: The foundation of every contract, the base salary is how much the player earns not including bonuses and incentives.

  • Signing Bonus: This is a lump sum payment that the player earns simply by signing their contract.

  • Prorated Signing Bonus: For salary cap purposes, teams may divide the signing bonus into equal amounts over five seasons OR the life of the contract, whichever is shorter.

  • Other Bonuses: In addition to a signing bonus, many NFL contracts include “Roster” bonuses, “Workout” bonuses, and various “Other” bonuses.

  • Incentives (LTBE & NLTBE): Incentives are a way to reward players for specific results (ex. recording 10 sacks or being named to the Pro Bowl). For salary cap purposes, incentives are classified as either LTBE (Likely To Be Earned) or NLTBE (Not Likely To Be Earned).

  • Cap Number (aka Cap Hit): This is the total amount that a player counts against the salary cap in a given year. There are a number of factors that go into calculating this amount, including base salary, prorated signing bonus, other bonuses, and incentives.

  • Dead Money: The amount that would be charged to a team’s salary cap if they release or trade a player. NOTE: It is important to understand that this is money the team has ALREADY SPENT and stays on the team’s cap if a player is traded or released.

  • Cap Savings: The difference between a player’s cap hit and the dead money remaining on their contract. Sometimes, this is a negative number which means it is more costly to release a player than to keep them..

  • Voidable Years: This is a contract mechanism that allows a team to spread money out over a longer period of time. In a “normal” offseason, this wouldn’t be relevant on a Seahawks site as Seattle doesn’t typically use them. But 2021 could be the exception to that rule.


For those wanting a better understanding of NFL contracts, this SI.com series is pretty enlightening. It’s Chiefs-focused, but still worth reading.

The Art of NFL Contracts Part 1: The Basics

The Art of NFL Contracts Part 2: The Examples

The Art of NFL Contracts Part 3: Eight Things to Keep in Mind

The Art of NFL Contracts Part 4: The Three Ways to Manipulate Cap Space

And for those who would like to learn more about Voidable Years, OverTheCap is typically considered the go-to reference.