The first day of the league year, which comes around annually in mid-March, used to mark the start of “free agent frenzy”, however, nowadays it merely marks the transition from the “legal tampering period” to the signing period for veteran free agents.
Typically, veteran free agency is thought of as coming in three waves, though, of course, it never truly stops. Free agency continues to lap at the shore right through to the superbowl, and, with future contracts, even beyond. There is, I guess, a 3 or 4 week pause from late-February to early-March, but even then, the stray veteran who gets cut by his team may cause a disturbance, like chum thrown into the shark tank.
The first wave, these days, begins with the opening of the legal tampering period and continues for about 4 to 7 days beyond the start of the league year — perhaps 7 to 10 days in total — and is frequently referred to with the ‘free agent frenzy’ appellation.
There’s not a discernible line in the sand between the first wave and the second, but like a duck or pornography, most NFL fans know it when they see it. The initial rush of high-dollar contracts slows down; most of the top-30 veteran free agents have been snapped up by teams. The pace of the signings slows, and the profile of the players drops to the second or third tier as teams go to Option B or start to backfill the roster. As the second wave winds down, contracts tend to be (if you’ll forgive the use of the old parlance) at or near league minimum, and backup players ink deals, often with the same team that employed them a season earlier.
There is, however, a bright red line between the 2nd and 3rd waves of veteran free agency — the NFL draft. Following the draft, teams, agents and players know where the roster holes (and therefore, opportunities) exist. Cap dollars are clearly defined. Roster opportunities start to disappear.
It’s easy to think of the third wave as comprising just the leftovers or dregs of veteran free agency, but that is not true. Every offseason, a number of quality NFL veterans are signed after the draft.
One reason has been alluded to already; that is, the teams are more certain of roster holes after the draft, and motivated to fill them.
But there’s more to it than that. The compensatory draft pick system is a factor in veteran free agency, and 2022 offers a perfect example for Commanders fans. If you are unfamiliar with what comp picks are, here’s a very brief description:
A team losing more or better compensatory free agents than it acquires in the previous year is eligible to receive compensatory draft picks. The compensatory picks are positioned from Round 3 to Round 7 based on the value of the compensatory free agents lost. The formula that determines compensatory free agents is based on salary, playing time and postseason honors.
The first criterion for being awarded compensatory draft picks is that the team has to lose more compensatory free agents than it acquires. This means that a front office that wants to optimize its compensatory pick opportunities needs to manage its free agency signings carefully.
I highlighted the words, “compensatory free agents” in the quote above, because not every NFL free agent is a compensatory free agent.
If a player didn’t finish his contract with his previous team, for example, (usually because he was released) then he does not count toward the compensatory draft pick formula used to calculate which teams are awarded comp picks in the following year’s draft. For example, because Washington cut Matt Ioannidis, he does not count towards the comp pick calculation, while Tim Settle, who played to the end of his contract does. Presumed starting left guard Andrew Norwell, signed by Washington in March, is not counted because he did not complete the 5-year contract he signed with the Jaguars in 2018 (due to a renegotiation).
Players who earn below a threshold contract value (last season, the threshhold was around $2.5m APY) are not counted. The threshold is a moving target, and this year is likely to be around $2.75m APY (more or less). For this reason, former WFT WR/returner DeAndre Carter does not factor into the formula because his new contract with the Chargers has an APY of just $1.14m. Likewise, although Washington signed DE Efe Obada as an unrestricted free agent, he is not included in the comp pick calculation due to his low contract value.
Only unrestricted free agents count. Restricted free agents like Kyle Allen are not included in comp pick calculations.
To date, Washington is expected to receive two compensatory picks in the 2023 draft — a projected 3rd round pick for the loss of Brandon Scherff, and a projected 7th round pick for the loss of Tim Settle.
Another important factor in the comp pick calculation is the timing of the contract. Basically, any free agent signed from May 2nd (the Monday after the draft) onwards does not count towards the compensatory pick calculation. This is part of what drives the 3rd wave of free agency. Teams (like the Commanders) who are trying to preserve comp picks may wait until after the draft to sign a free agent they are interested in, but who would cost the team one of its compensatory picks if inked to a deal prior to the draft.
The behavior of the Commanders front office this offseason would have made it pretty clear that they had an eye on signing veteran free agents after the draft, but fans have even more direct evidence: Ron Rivera told us that is the strategy. The head coach said in March that the team would look to add veteran free agents after the draft, and encouraged fans to exercise patience with the process.
Personally, I think the team has at least one high-profile veteran free agent in its sights for that post-draft “3rd wave” of free agency.
Why do I think so?
Washington has made moves to maximize available cap space for this offseason, but so far hasn’t made the kind of signings that demand such action.
- The Commanders designated Landon Collins as a post-June 1 release, which increased the 2022 cap space by moving part of the dead cap to the 2023 season.
- The Commanders have used the maximum number of void years possible in 3 veteran free agent contracts this season (Andrew Norwell, Bobby McCain, JD McKissic).
Combined with the decisions to release Matt Ioannidis and Ereck Flowers, there seems to have been a genuine determination on the part of the Commanders front office to clear cap space that they can use this offseason.
Per Over the Cap, the Commanders are currently estimated to have $11.3m in available cap space, with a further $11.88m coming in June when the Landon Collins contract comes off the books. An estimated $4.4m in cap space will be required to sign the Commanders’ 6 draft picks.
Taken altogether, these numbers mean that the front office has made about $18.8m in cap space available. If the team keeps a contingency of, say, $4.8m for injury replacements during the season, that still leaves about $14m that the team can spend on free agents between now and the start of the season.
Signing low-dollar backup players — because of the Rule of 51 — is essentially “free” with respect to cap space. The new low-cost player simply replaces a different low-dollar contract. In other words, only high-dollar contracts will move the salary cap needle between now and the start of the season, so the only reason to have cleared that space is to spend it on one or more high-dollar contracts.
So, who does the front office need the money for?
Not Terry McLaurin
I keep seeing people toss out the idea that the team needs a lot of money to sign Terry McLaurin to a high-dollar extension. While it is true that a big contract will require a lot of cap space, it won’t require much cap space in 2022 if the front office doesn’t want it to. In other words, it wasn’t necessary to cut Matt Ioannidis to afford an extension for Terry, and the team doesn’t need to wait until Landon Collins comes off the books to be able to pay Terry either.
McLaurin is in the 4th year of his rookie contract, and because he qualified for the Proven Performance Escalator, his base salary for 2022 will be $2.79m, and his total cap hit will be $3.04m in 2022.
I believe that Terry should expect to sign a contract extension that would add 4 years to his current deal and average $23m per season for 5 years (2022-26), making it a $115m deal with (roughly) $112m in new money (on top of his current 2022 base salary).
That sounds expensive. But even a basic NFL contract with no fancy structuring can be set up to put $23m in cash in Terry’s pocket this season with minimal impact on the team’s salary cap situation.
This chart shows a simple structure that would pay Terry a base of $23m per season for years 2-5, while adding a cash bonus of $20m to his current 2022 deal.
The signing bonus is prorated over the life of the contract at $4m per season.
In my hypothetical contract, Terry’s base salaries in 2022-23 would be fully guaranteed ($25.79m). When you add that together with the signing bonus, he would have total guarantees of about $45.8m (~40% of the total contract value).
This is a pretty vanilla NFL contract.
The net change to the Commanders’ 2022 salary cap in this model is a mere $4m (out of the projected $14m of available cap space). The impact on the 2022 cap could be reduced even further through some creative structuring, but it simply isn’t necessary. Even this simple but lucrative contract is affordable for Washington in 2022 without the level of salary cap structuring they have undertaken this offseason.
By the way, I’d like to comment on the report that just surfaced that Terry does not plan to participate in on-field activities during the offseason until he has a new contract. This is great news! If he refused to participate because he wanted to force a trade, I’d be upset, but if he’s trying to force the team to extend him, then that indicates that he wants to stay, which means it’s just a matter of agreeing to terms. Nothing could have made me happier than this Adam Schefter report.
Not Daron Payne
It’s been suggested that the newly cleared cap space might be used to fund an extension for Daron Payne.
Well, a year ago, Jonathan Allen was in the identical position, scheduled to play the season on his 5th year option. When he signed a 4-year, $72m extension, Allen’s 2021 cap hit went down to $7.14m.
Daron Payne is currently slated to cost $8.53m in cash and cap space on his 5th year option in 2022. If he were to sign a deal similar to Jon Allen’s, it would likely create a small cap savings for the team.
Not Cole Holcomb
The other player from the 2019 draft who could be in line for an extension is linebacker Cole Holcomb. Like teammate Terry McLaurin, Holcomb earned a 2022 pay increase by qualifying for the Proven Performance Escalator. Unlike McLaurin, Holcomb does not play a premium position, nor is he a team captain. Holcomb, as a starter, has likely earned himself a healthy raise, but a good contract for a solid starting linebacker is in the $5-8m APY range, not the $21-25m range that McLaurin will likely command.
In doing the same exercise for Cole Holcomb that I did for Terry McLaurin, I estimate that a contract extension for the young linebacker is likely to increase the Commanders’ 2022 salary cap by only $1m — not enough to require the kind of extensive structuring that the front office has gone through.
In fact, if the Commanders sign extensions with both Payne and Holcomb, the two contracts combined are likely to have no net effect on the team’s salary cap in 2022.
So, why does the team need all that cap space?
If Washington doesn’t need all the cap space it has worked so diligently to “create” for extending players like McLaurin, Payne or Holcomb, and if signing backup players to $1m contracts has no net effect on the cap due to the Rule of 51, then either the team didn’t cut Matt Ioannidis for cap reasons, or they must have some other plan for the newly available cap space.
The 3rd wave of veteran free agency
I believe the Commanders front office is still expecting to use up some significant cap space to make one or more significant veteran free agent signings after the draft.
I believe they are waiting until May because they don’t want to lose either of their projected compensatory picks.
And I’m guessing that they may already have a deal worked out with a player and his agent, who understand why the team wants to wait until May 2nd to ink the deal.
Who are the veteran free agents that fit the profile?
Washington will almost certainly sign some low-cost veterans to minimum-dollar contracts, but these guys are not the reason why the team cleared an extra $10m - $14m in cap space.
If Washington cleared that cap space because the front office is targeting one or more players to sign post-draft, then the players would have certain traits:
- The player would be a qualifying compensatory free agent (which is why the team wants to wait until May)
- The player will command at least $3m APY (to be a qualifying compensatory free agent), but likely much more (which is why the team needs $10-14m in available cap space).
- The player will fill a position of need on the Commanders roster.
I decided to peruse a list of the top remaining veteran free agents to see which guys on the list seem to fit the bill.
For this exercise, I am assuming that the front office plans to extend Terry on a big-dollar contract, and won’t be looking to sign a high-priced veteran wide receiver in May. Likewise, I think they’ll avoid spending big dollars at OL, RB, or DE.
I see three, or possibly four remaining veteran free agents whom the Commanders could target following the draft to make use of the cap space they worked so hard to make available.
Tyrann Mathieu, Safety
Mathieu wanted to return to the Chiefs but wasn’t offered a contract. Based on comments he’s made recently, I think he may be willing to sign a 3-year contract worth about $30m, which wouldn’t leave a ton of room for cap structuring. Since joining Kansas City in 2019, he has played over 600 snaps in deep, box and slot alignments, and he rarely comes off the field, averaging over 1,000 snaps per regular season since 2017.
Alexander Johnson, Linebacker
A number of fans projected Johnson as a free agent target for the Commanders in March. He’s still on the market. His teammate, Josey Jewell just signed a 2-year, $11m contract to stay with the Broncos. The 30-year-old Johnson would likely have to settle for less. A 2-yr deal worth $8-10m seems like the right neighborhood.
Kyle Van Noy, Linebacker
The 31-yr-old Van Noy got paid $6m to return to the Patriots for one year in 2021. It would probably take a similar one- or two-year contract to bring him to Washington.
Larry Ogunjobi, DL
Ogunjobi reportedly agreed to a 3-year, $40.5m contract with the Bears in March, but failed the physical. His 2021 season ended with the defensive lineman on IR following a foot injury suffered in the wildcard playoff game that required surgery. If he’s healthy enough to play, Ogunjobi could still find himself out of a job post-draft, with most team salary cap situations depleted. He might be willing to sign a 1-year deal at a discounted price that could help the Commanders replace some of the depth they lost in March.
Of these four players, I think the most likely to sign with the Commanders would be Alexander Johnson, who seems to be a very good roster fit, though I think the most exciting player on the list would be Tyrann Mathieu.
Of course, Washington is expected to prioritize the safety position in the draft, but with only 3 picks in the first 5 rounds, the team is unlikely to fill every roster need with its current slate of draft picks. If the Commanders come out of the draft without a new young safety, then it might be reasonable to use some of that hard-won cap space on one of the premier safeties in the NFL if you can convince him to come to DC.