5 PM special edition: Is it time to experiment with a ‘percentage of cap’ contract for a franchise QB?

This is a “Special Edition” of the 5 o’clock club. Feel free to introduce any topics that interest you in the comments below.

I was paying attention to the messages that Kirk was delivering in his Friday press event with fan questions earlier today. He said a lot of things, most of them not new, and refined or clarified some of the things he’d said before.

I’d like to focus on one or two things that were reported via Twitter from that event.

Back in August, USA Today published an article about quarterback salaries. Here’s how that article began:

Matthew Stafford is the highest-paid player in NFL history. That doesn’t sound right, and the crazy thing is we all expected it to eventually happen a year ago.

Even crazier than Stafford holding that title? Kirk Cousins is about nine months away from prying the “highest-paid in history” belt away from him.

Kirk. Cousins. Highest-paid player. EVER. Think about that for a second.

Before Stafford, it was Derek Carr who held the belt. So over a 12-month span, Cousins, Stafford and Carr — three quarterbacks without a playoff win between them — will have been the highest-paid player in league history at one point.

Even CRAZIER than all of that? This is a scenario that could legitimately play out over the next year…

The NFL’s quarterback market is out of control and has been ever since Joe Flacco signed his name on a six-year, $120.6 million contract in 2013. It needs fixing.

The article went on to outline a complex system to bring the salaries under control. Basically, the USA Today proposal had 4 key points:

1. Each team can designate one quarterback (let’s call it the ‘Franchise QB Tag’) who does not count against a team’s cap, and that quarterback does not count against the cap for the duration of his deal. If the quarterback is cut or traded, the dead money counts against the cap.

2. Set max contracts (salary, guarantees and years included), which are tiered based on certain statistical accomplishments and accolades. The contract figures are based on a percentage of the salary cap.

3. These designated contracts offer higher guarantees than quarterbacks are getting now.

4. In free agency, other teams can offer one fewer year than the quarterback’s current team can and only 65% of the contract would be guaranteed.

While I admire the thought and effort that went into the design, I think that the proposal has a lot of flaws. It is overly complex, and it would require a massive re-write of the Collective Bargaining Agreement.

And then, there’s the principle of unintended consequences. Any change as complex as the one proposed above would have huge ripple effects across the league.

In fact, the current issue with quarterback salaries might be seen as an unintended consequence of the most recent CBA, with its complex rules on salary cap and franchise tags combined with the changes to rookie contracts that was designed to protect teams (and the league, and veteran players) from spiraling rookie contracts being given to early draft picks. Changing rules to stop one issue nearly always opens the door for new and different ones.

A simpler idea

There’s a simpler idea that gets bounced around from time to time — especially by commenters on websites like those hosted on SB Nation, and it involves an element or two from the USA Today proposal. Basically, it’s the argument that a quarterback contract should be based on the percentage of salary cap. In fact, that argument has a few vocal champions right here on Hogs Haven.

It would be simple to implement, and wouldn’t require any amendment to the CBA. There is nothing that I am aware of that would stop any franchise from writing a ‘percentage of cap’ contract with one of its players today.

The idea would be to pin the player’s salary to a percentage of salary cap figure. That percentage could be fixed for the life of the contract, or it could be different from year to year, based on negotiation and spelled out in the contract.

For example, a franchise and its starting quarterback might agree that the player would receive 11.5% of the salary cap for the next 5 years. The exact amount of his salary would be defined on the same day that the salary cap amount for the season is announced by the league. Alternatively, due to specific cap considerations, the contract might call for a higher or lower percentage in Year 1, with more ‘normal’ percentages in later years. San Francisco, for example, has a ton of cap space available right now. They might opt for a 20/9/9/9/9 structure. Denver, if they wanted to keep Aquib Talib on the team, might opt for a 1/15/15/15/15 structure.

This shifts some of the risk from the team to the player if the salary cap does not increase as much as expected, but it also limits the potential benefit to the team if the opposite occurs and the salary cap rises unexpectedly quickly.

The real benefit is the certainty that the front office who pays their QB a fixed 11.5% of the cap knows that it has 88.5% of the salary cap available to pay for the rest of the team.

The Redskins and Kirk Cousins

Kirk Cousins and his agent have proven themselves to be forward-thinking people, who seem to understand the market they are in. In addition, Kirk has spoken publicly on at least one occasion (as recently as today!) about the significance of the percent-of-salary-cap concept in understanding where franchise quarterback salaries can go. Kirk & his agent seem like exactly the type of people that a franchise could talk to about this kind of contract structure.

For the Redskins, this could provide a face-saving “out” from the current negotiating dilemma. Signing a new kind of contract would make it difficult for the media and fans to compare apples-to-apples; no one could be sure if the contract would pay Cousins more or less than Matt Stafford, Andrew Luck or Aaron Rodgers. Bruce Allen could claim the high ground for the organization, moving from the appearance of bumbling nincompoops to ground-breaking trend-setters. It’s the kind of Hail Mary that a desperate team tries when the clock and the scoreboard make all other options unrealistic.

What’s the biggest fly in the ointment?

This type of structure is designed to give a certain amount of security to both parties at a time when the salary cap is rising significantly and consistently, as it has for the past 4 or 5 years.

The problem comes if the salary cap stagnates or deflates. Since the cap itself is a percentage of league revenue, and since that revenue is primarily derived from television contracts, the most significant factor in a rising salary cap is good ratings.

It’s well-reported that NFL television ratings are falling, and have been for nearly two years now. This hasn’t yet affected league revenue because the broadcast contracts are signed for years in advance, but at some point the league will need to either reverse the ratings trend or find new sources of revenue. The latter is already on the agenda for Roger Goodell’s team, and explains why we have seen games in Mexico and London, the introduction of GamePass, the NFL Network, and partnerships with Twitter and other online platforms in recent seasons.

What player would be willing to take a risk on falling league revenues? Certainly not someone as savvy as Kirk Cousins. After all, a franchise quarterback could actually see his overall compensation reduced under this type of contract.

The only simple and seemingly effective answer in my mind is to trade the potential loss of overall contract value for greater security in the form of more guaranteed money, which is — after all — the Holy Grail of NFL players and their agents.

What I mean is, instead of offering a quarterback a 5 year contract with steadily rising overall salaries, with perhaps 60% of the contract guaranteed (and most of that in the first 3 years), the team could offer a percentage of cap contract with both upside and downside risk on the total salary, with — say — a 70% guarantee that applies — at least in part — to each of the first 4 years, or even 5 years of the contract.

All of this can be done within the structure of the existing CBA, and might possibly (remember that Hail Mary play) provide a way forward for the difficult contract negotiation that the Redskins face with Kirk Cousins this off season.

Look, I understand that the chances of this happening are along the Dumb & Dumber “so you’re saying there’s a chance” scale of unlikely, but I thought it was worth a few paragraphs — especially in the wake of today’s Cousins media event. This proposal would likely achieve all the positive outcomes that USA Today was striving for back in August, without the unnecessary complexity or unintended consequences of their proposal.