Pondering Peterson's (financial) future

May, 18, 2010
5/18/10
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PetersonMatt Stamey/US PresswireAdrian Peterson, one of three players in NFL history to rush for at least 1,300 yards and 10 TDs in each of his first three seasons, has two years remaining on his rookie contract.
Tennessee Titans running back Chris Johnson has three years left on his contract. He wants a new one. So does Houston Texans receiver Andre Johnson, whose deal doesn't expire until after the 2014 season.

They have been among the NFL's most productive players in recent seasons and consider themselves due for a raise. So why haven't we heard the same from the NFC North's top player?

Adrian Peterson is one of three players in NFL history to rush for at least 1,300 yards and at least 10 touchdowns in each of his first three seasons. He has two years remaining on the rookie contract he signed in 2007. Importantly, Peterson plays the most bruising position in the game, one that generally leads to a shorter career span and puts a premium on early contract extensions.

Whenever the Minnesota Vikings address this issue, it will prove exceptionally complicated and fraught with risk on both sides. At this point, it doesn't appear to be a priority. Perhaps preliminary talks have already begun, but I haven't sensed the type of urgency that has led to public flare-ups in Tennessee and Houston.

Among other reasons, Peterson is well-compensated relative to rookie contract scales. And the Vikings can't be eager to walk in what longtime contract negotiator Andrew Brandt has called a "graveyard" of failed contract extensions for elite running backs who can't sustain their early career production.

So as we twiddle our thumbs during a quiet time in the NFL offseason, let's consider the issues facing Peterson's future with the Vikings. (And no, none of them relate to the fact that he fumbles too much.)

Straight cash

[+] EnlargeJohnson
Steve Dykes/US PresswireChris Johnson has skipped the Titans' voluntary OTAs so far and is hoping to get a new contract.
Chris Johnson, the No. 24 overall pick of the 2008 draft, is scheduled to earn $550,000 in 2010. He's already received $7 million in guarantees on a deal that would pay him a total of $12 million over five years. Andre Johnson, meanwhile, is locked in to a contract that will pay him an average of $7 million over the next five years. Elite receivers these days are making more than $10 million per season.

Peterson does not fall in the hardship category. He's already collected $17 million in guarantees and he should make close to $7 million in 2010 as a result of incentives. In 2011, his compensation will approach $10 million. That doesn't place him too far behind St. Louis running back Steven Jackson, whose 2008 extension carried a total of $20.5 million in guarantees and will pay him just over $6 million in base salary for 2010.

Certainly Peterson has not reached his financial ceiling. But because of his position in the 2007 draft (No. 7 overall) and some smart negotiating from agent Ben Dogra, Peterson's career has been fairly compensated thus far.

We'll get to this in more detail, but from the Vikings' point of view, you could make a convincing argument that they are better off paying Peterson $10 million in his fifth season and putting off the negotiations for his next deal until he is a relatively old 27.

The 30-percent rule

Until recently, one fairly obtuse obstacle to an extension has been the NFL's "30-percent rule," which this year limits raises to 30 percent of the 2009 base salary. The rule was one of several changes to the league's offseason arrangement designed to compensate for the elimination of the salary cap.

As Brandt explained over on the National Football Post, teams struggled to construct extensions early this offseason. Peterson's base salary in 2009 was just under $800,000. Some additional compensation came through bonuses, but the new rule still meant Peterson couldn't have received much more than $1 million under a new extension in 2010 -- including most forms of bonuses.

Some teams have found a way around the rule, but in general the NFL is making it difficult for teams to hand out large raises in 2010.

'The graveyard'

That's the phrase Brandt uses to describe the list of elite-level running backs who haven't lived up to the monstrous second contracts they've received in recent years. From an economic standpoint, running backs are considered a bad investment given the pounding they take and the resulting career arcs. Last year, for example, eight of the NFL's top 10 runners were 27 years old or younger.

The two most notable examples of this concern are Shaun Alexander and Larry Johnson. Alexander, you might recall, received an eight-year contract extension from Seattle worth $62 million after winning the MVP in 2005. The following year, at age 28, he broke his foot and never mustered another 1,000-yard season.

Johnson, meanwhile, signed a six-year extension in Kansas City at age 27 after producing consecutive 1,700-yard seasons in 2005 and 2006. He has rushed for 2,014 yards in the past four seasons combined.

There are exceptions to the trend, of course. When you look at the chart of 2009's top-10 runners, you see Thomas Jones (age 31) and Ricky Williams (32). But when you're a salary analyst, you look at the percentages. And it's fair to say that a running back is more likely to experience a slide in production as he approaches 30 than he is to maintain elite numbers.

And so goes the most complicating factor in any future negotiation with Peterson. If he plays the final two years of his contract, he will be 27 years old and have five years of NFL pounding on his résumé.

At the very least, the Vikings will have a complex analysis to make at that point. Should they simply pay him at his presumable All-Pro value, anticipating that his career will continue progressing against the grain? Should they try making him their franchise player, essentially leasing him on a year-to-year basis? Take a hard line and offer him a below-market extension? Or would they be tempted to move on entirely and find a fresher-legged replacement?

Contract stories rarely interest me. The vast majority of them are resolved with little to no interruption of actual football work on the field, which is all we care about. But Peterson is an exceptional player at a position that sometimes demands an exception to normal thinking. There is no urgency here. But it's quite likely that some difficult decisions will have to be made -- some day.

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