We are about to see a generational shift in quarterback contracts in the next two years. Although recent contracts have been negotiated for A-list quarterbacks Tom Brady, Peyton Manning, Drew Brees and Michael Vick, a new wave is coming.
The next contract to come is probably that of Joe Flacco, who is in the final year of his five-year rookie contract. Talks also reportedly have begun for Tony Romo. Other quarterbacks ripe for extensions include Matt Ryan, Eli Manning, Aaron Rodgers, Matthew Stafford and perhaps Philip Rivers, Jay Cutler and Josh Freeman. All are playing on rookie contracts (Flacco, Ryan, Stafford, Freeman) or second contracts more than three years old.
Not only do the players and agents desire upgraded contracts but, in these cases, teams have motivation, as well. A team can lock up its most important player while the salary cap is relatively flat, before the expected cap spikes from television contract extensions.
Let's go inside these negotiations.
The elite marketplace
A certain element of these negotiations is whether the player is "elite" and deserving of placement in the Brady/Peyton/Brees marketplace.
Brady's contract, from 2010, guarantees $48.5 million, with a $16 million average per year (APY).
Peyton Manning, over the past 14 months, signed: (1) a Colts contract that paid $26.4 million last year and would have paid $70 million over three years if not terminated in March; and (2) a Broncos deal paying $18 million this year and -- assuming he passes his physical next spring -- a guaranteed $58 million over the next three years, an APY of $19.3 million.
And in July, Brees set new contract standards: a $20 million APY, a staggering $40 million this year and $60 million guaranteed in the first three years.
Thus, for the moment, the elite quarterback market has an APY range of $16-20 million and a guarantee range from $48-60 million, depending on the structure.
In the contract that may be the most discussed data point in many of these negotiations, Vick's contract last year paid him $20 million in the first year, $32.5 million over two years and potentially $48 million over three.
Last week, the Texans extended Matt Schaub, who was entering the last year of his contract, with a $62 million deal guaranteeing $29.15 million and earnings of just more than $40 million in the first three years.
The agents and players will note the two-year earnings of Vick and Schaub. The teams will note no further guarantees, allowing the team to get out after two years with no further financial exposure.
Flacco and Romo are not easy fits in this hierarchy, making their negotiations difficult to gauge. Are they deserving of an "elite" level contract at or above the Brady contract? Brady certainly has a stronger résumé, but his deal is more than two years old.
Are they worthy of what Vick received? He's a completely different style of player.
How will Manning's Broncos contract factor in? Manning clearly could have earned more from other teams.
For Flacco, the key comparable may be a contract not yet negotiated. Players usually focus on a certain player in their negotiations, because there's always a player that a player compares himself to. In Flacco's case, Ryan -- drafted the same year as Flacco -- may be the most important comparable.
The emotional "pay the man!" comment by Ravens coach John Harbaugh regarding Flacco after the Ravens' Week 1 win was common for a coach in the excitement of a big win. Agents love hearing it. A front office, however, must stay steady in making big decisions that affect the future of the franchise, and Flacco's Week 2 performance was much worse.
This is why the coach/general manager model is a difficult, if not unworkable, model. When I was in Green Bay with coach/general manager Mike Sherman, Mike would often tell me, "I'm going to make you the bad guy." I understood that; Mike needed that player to play hard for him.
The franchise tag is a management tool in these negotiations. The new collective bargaining agreement has made it even more of a weapon, now calculating back five years of salaries for top players instead of only the previous year.
The 2012 quarterback tag was $14.4 million, down from $16 million in 2011. Anticipating that the 2013 tag will be relatively flat compared to this year, it is a card that the Ravens -- and other teams to come -- are obviously playing in their negotiations.
My sense is that this new wave of quarterbacks will get contracts with overall values between $80-90 million, guarantees in the $40-45 million range and three-year values from $50-55 million. Teams will try to limit the guaranteed portion of the deals to the first two years to minimize the risk of their investment.
The Ravens and Cowboys will eventually "pay the man" -- as will the Falcons, Packers, Giants and more -- but there will be many twists and turns, good games and bad, leading to that common ground. Stay tuned.
And from the mailbag …
Q: This week's games with the replacement refs were embarrassing. Any hope for resolution?
Steve in Baltimore
A: Unfortunately for the NFL, the replacement referees are becoming a bigger part of the story than the league wants them to be. (I was at Ravens-Eagles; I know.) Their inexperience is now on full display, and two tenets of the league are at risk: integrity and player safety.
The question is whether their substandard performance will lead the NFL to move more aggressively toward a new deal with the referees. I continue to sense that the NFL believes its offer is more than fair and will not be leveraged by a poor job by replacements.
The referees appear to be holding firm on their demand to continue their pensions, at least for the existing officials. The NFL insists on a defined contribution plan.
As a compromise, perhaps the NFL should increase the amount of its defined contribution. It is offering between $16,000 and $22,000 a year. The referees could then back off the pension demand. Done!
Q: What do you make of Gregg Williams' affidavit and the meetings with Roger Goodell and the bounty players?
Ted in New York
A: Monday's revelation of an affidavit from Williams, the New Orleans Saints' former defensive coordinator, stating that Jonathan Vilma offered $10,000 for an injury to force Brett Favre out of the NFC Championship Game was certainly damning information. The timing is curious, though. The NFL presumably has known of Williams' allegation for months, but it was just committed to writing on Friday. Why now? Perhaps earlier information from Williams contained confidential and sensitive material, or perhaps Williams cut a deal.
These meetings have a backdrop of an appeals panel ruling that admonished Goodell to stay in his lane with discipline and could produce lesser penalties, perhaps only fines for "pledging" money to the pool. (Non-contract payments are not Goodell's territory, as per the appeals panel).
U.S. District Judge Ginger Berrigan in New Orleans still has Vilma vs. Goodell on her docket, but perhaps things won't get that far. These meetings could lead to discipline all sides can live with or perhaps -- although all sides say it won't happen -- even a negotiated settlement.