Saturday, March 03, 2007

Time to Spend--But Is Anybody Taking?

By releasing four players last week, the Minnesota Vikings padded their already ample salary cap space boosting their largesse to roughly $30 million. Unfortunately for Vikings' fans, that's not enough money to compete with what other teams have to offer--similar amounts of money and indications that their talent will be used properly by the head coach.

With Jermaine Wiggins headed elsewhere and Travis Taylor likely soon to follow him out the door, the Vikings are left with only two receivers under contract next season, Troy Williamson and Billy McMullen. In 2006, Williamson and McMullen combined for 60 receptions, nearly as many dropped passes, and a paltry two touchdowns.

To fill their glaring holes at wide receiver, the Vikings targeted three free-agent receivers, Ashlie Lelie, Drew Bennett, and Kevin Curtis. Fortunately for the Vikings, the malcontented, underwhelming Lelie was taken off the market by San Francisco, saving the Vikings from themselves. Bennett, a Travis Taylor-esque receiver who would have upgraded the Vikings' receiving corps only because you can't really downgrade from Williamson and McMullen, was also signed, by St. Louis, before even visiting Minnesota. That left Curtis.

After a trip to Minnesota on Saturday to visit with Minnesota's coaching staff, Curtis swiftly boarded a flight for Detroit, presumably to escape the clutches of a coaching staff promising 40-50 touches on two to three yard passes in favor of a coach who runs a professional level offense. Curtis' departure leaves virtually no free agent wide receivers worth even considering at the moment.

Time to Switch Gears

Given the paucity of receivers on the free agent market, and the desperation among several teams to land any receiver, as desperate as the Vikings are at receiver, they would be better off focusing their attention elsewhere during this free agency period and hoping that a receiver turns up in the draft and in the post June 1st cuts period.

The Vikings have suggested that they will not get into a bidding war for any players this season, but that would be a foolish move given that there are players on the market who fit the Vikings' needs and would be an asset in 2007, even if overpaid.

The current economics of the NFL virtually require teams with any meaningful cap space to overpay for players in this year's free agency pool. That fact is based on three other facts--one, the free agency pool is thin; two, salary cap room is large for many teams due to the enormous profits that the NFL has reaped the past several seasons; and three, teams can use lean free agency years to make one-time payouts to one or two key players that will help the squad for the long haul, without undermining their salary cap structure.

As an example of the dictates of the NFL's current economic structure and how it affects a team like Minnesota with $30 million in cap space, it is instructive to consider a free agent such as defensive end Patrick Kerney. Regarded as a good pass rusher nearing the downside of his career but with legs left in him, Kerney is a valued commodity in this year's free-agency pool because he is the sole legitimate defensive end on the market. That means more teams will be willing to pay more money to sign him. Ergo, if the Vikings want Kerney, they will have to pay up. The consensus is that Kerney will sign for around $5-7 million per season with a four year deal valued at around $30-35 million, with bonuses.

That sounds like a big hit for a team to take to fill a hole for two or three years--assuming that Kerney doesn't really have four years left in him and that the team would void the fourth, maybe even the third year of the deal. That's the kind of logic, however, that keeps mediocre teams mediocre in a weak free agent market.

A $35 million, four-year deal for Kerney would cost the Vikings just under $9 million a season, assuming that the terms of the deal included only annual salary and a signing bonus. That would be a bad signing for Minnesota as it would cost the team $27 million after 2007 and, if Kerney did not work out, the team would not only have to find a replacement for Kerney but it would also be on the hook for salary cap purposes for whatever pro-rated bonus remained.

With considerable cap room in 2007, however, the Vikings could make a $35 million deal with Kerney entirely palatable, by offering the bulk of the money in guaranteed money in 2007. Giving Kerney $14 million as a roster bonus in 2007 would give Kerney immediate financial security, making the offer one that would be difficult to refuse, and leave $21 million to spread out over the four years of the contract--five if the Vikings so chose as Kerney probably wouldn't quibble given the $14 in guaranteed money in 2007.

The effect of giving Kerney a roster bonus of $14 million versus a signing bonus would be monumental. Any signing bonus would remain on the books beyond 2007. The roster bonus, meanwhile, would come off the books after 2007, leaving only an insignificant salary cap hit should the Vikings elect to part ways with Kerney after 2007, before his contract expired.

Whether it's Kerney or some other player, the Vikings are best served spending money this year and paying off the debt on the signing this year. That's because, with the considerable amount of money that the NFL continues to reel in, teams are increasingly likely to have money to spend on free agency and to have money to spend to retain key players, either through franchising or through long-term deals. In the past, these moves were anathema to sound cap management. Today, and until cap increases show signs of slowing, the reverse is true.

The premium, of course, is on signing quality players to fill key needs. Bad players signed at high prices will still garner bragging rights only in Detroit.

Two Players to Consider Signing Yesterday

With Kerney providing one free agent that would serve a Vikings' need in 2007, two other recent additions to the free agent market could like very nice wearing Vikings' purple next year.

Last week, New England running back Corey Dillon asked for and was given his release by the Patriots. Slated for the backup role behind 2006 first-round pick and emerging star Laurence Maroney, Dillon wants a chance to earn a pay day before there are none left for him to earn. With Chester Taylor slated as the number one back in a two-man system in need of someone with Dillon's abilities, the opportunity would be there for Dillon to seize. Only Dillon's injury history, and the running back discussed below, should deter the Vikings.

An even more appealing running back is the younger, healthier Travis Henry, whom the Tennessee Titans cut on Saturday for salary cap reasons. A virtual non-entity at the start of the 2006 season, Henry became a fantasy stud and key cog to the Titan's offense for much of 2006. Frustrating for his occassional down game, Henry is still a great runner with loads of ability. His speed would be a nice change of pace in tandem with the more, up-the-gut running approach of Taylor.

From the "How to Boost Eli Manning's Morale" File

Washington has signed former Vikings' purported cornerback Fred Smoot to a five-year deal, raising concerns in Washington that Snyder is readying to re-establish his authority over the team. As bad as it's been under Joe Gibbs in recent years, this cannot be good news for Washington's fans. Enjoy the burn, Mr. Snyder.

Up Next: More free agency, including signings. Plus, sizing up the draft.

10 comments:

boognish said...

All I can say is thank God that Rob Brzezinski is handling contracts and not you. Overpaying for mediocre talent is not in the best long-term interest of this franchise. We signed a TE yesterday with a lot of potential, who won't cost us nearly as much as Graham would have. Smart move.

I'd love to see us get Curtis, but if we don't I think we'll be all right. I was impressed by Carter and Nance last season and hopefully they'll be able to compete for starting jobs this year.

We'll certainly pick up some WR's in the latter rounds of the draft and it's quite likely we'll use our #7 on a DE, like Gaines Adams.

What we don't need to do is spend money, just to spend money. The FA pool is weak, at best, and we're better off looking for value. Look to Dan Snyder in Washington for a case study of teams who operate as you suggest the Vikes should.

Vikes Geek said...

Boognish,

You misstate the point, probably because you've misread what is meant by "overspending."

The problem for Washington is not that they overspent on talent. Washington's problem is that they overspent in the wrong way for too many bad players. Rather than signing a few players to contracts with roster bonuses, Washington signed numerous players to contracts that included signing bonsuses. Signing bonuses allow teams to pro-rate, roster bonuses do not. When several of the free agent signees faield to pan out for Washington, Washington released the players and the bonuses accelerated.

The key is not to overspend on bad talent but, instead, to "overspend" (i.e., to pay market in a down year for free agents) in the proper fashion on good talent. If you're a Brzezinski fan, you'll appreciate that that is precisely what Brzezinski did last year when signing Steve Hutchinson.

Kerney is a decent player who happens to be the lone decent end available in free agency. If the Vikings want to fill their need at end this year, they will have to overpay for Kerney in relation to what some other, better, already signed ends will receive in 2007. That's simply the nature of the current salary cap structure and it's not going to change anytime soon. With teams like the 49ers having over $40 million in cap space--representing approximately 35% of the total cap--and with half the teams having near or over $20 million in cap space in 2007, it is clear that it will take teams a few years to catch up to the current cap. And with more money to spend to retain top players, free agency should continue to be sparse for a few years. That means that hard to fill positions, like defensive end, will have to be filled either through the draft, from which untested players are selected, or by paying a premium in free agency.

If the Vikings elect not to compete in the open market for Kerney, they probably will be forced to play the hand they have and probably will have another difficult season rushing the passer on the edge. Maybe Frazier can devise a blitz scheme to counter this disadvantage.

The point, however, is that there is a way to compete for free agents that permits spending more on a player than one normally would spend on that player if all players at his position were available, and to do so without damaging the cap and while upgrading team talent. That's what it's all about.

VG

boognish said...

"Washington's problem is that they overspent in the wrong way for too many bad players"

Great, but I'm sure the Redskins didn't think they were picking up a bunch of bad players for top dollar, did they? Kerney is 31 years old and his production has been slipping consistently for a couple of years; of course last yr he only played 9 games due to injury.

Successful teams build through the draft and that's what I think the Vikes need to do. We're in agreement about Brzenzinki's genius in structuring contracts so they are "front-loaded" with roster bonuses.

Your comparison of Hutch and Kerney is a stretch, IMO. Hutch is arguably the most dominant player at his position in the League; Kerney is a older player on the downside of his career. To get into a bidding war for a player of his caliber would be a mistake of epic proportions.

As I said before, I think we'll likely draft a DE this year. If not, we'll have to hope that James can stay healthy and Udeze can perform better. They're both still young players; it's a little early to be giving up on them.

Darion Scott played very well for us last year and was just re-signed and the rookie, Ray Edwards now has a year of "seasoning" and could be poised to help this team out as well.

I just don't think it's worth overspending to get mediocre talent. Let the other teams go ahead and get in their bidding wars. In a couple of years the market will balance out again and teams will be struggling to get under the cap, while well run teams like the Vikes and Packers will have money to spare.

Lichty said...

boogey man:

Great, but I'm sure the Redskins didn't think they were picking up a bunch of bad players for top dollar, did they?

You are missing the point. VG is arguing that signing bad players is worse when you prorate the cap hit over the life of the contract (signing bonus) as opposed to taking the big hit in year one (roster bonus). It is like the Twins giving Ramon Ortiz a 1 year contract - sure its a terrible move, but it is only one year. By roster bonusing, the team can get out of bad players and not screw themselves down the road. Sure you might not have as much to spend, but is the safest way to operate.

boognish said...

"You are missing the point. VG is arguing that signing bad players is worse when you prorate the cap hit over the life of the contract (signing bonus) as opposed to taking the big hit in year one (roster bonus)."

No, I'm not "missing his point". I'm saying that signing bad players is a bad idea, no matter how the contract is structured. Pretty much everyone agrees that this free-agent pool is crappy and that teams are going to end up paying too much for sub-par players. I'd rather have the Vikes sit on their money, or try a trade later for a real player than to give any kind of contract for an over-rated player like Patrick Kerney.

Good way to rationalize though. Signing bad players is better if you pay them more up front. Pfffttt...

Vikes Geek said...

Lichty,

Thanks for jumping in. Good to see you back.

Boognish,

You're either missing my point, making your own, or both. Nowhere do I contend that the Vikings should willingly overspend on bad players. That's idiotic.

The problem with your rationale that the Vikings should sit on their money is that you assume a meaningful carry-over. The Vikings can spend this year and still have the same or more cap space next year. They aren't necessarily saving for next year simply because they do not--or cannot--sign free agents this year. Cap rules make spending in the NFL much different from spending in, say, baseball.

You also make what I consider to be a premature assumption about the free agent market markedly improving in the next few years. I've already made the point, but I will make it again. With so many teams so far under the cap and the few teams that are spending in free agency emphasizing guaranteed upfront money, the cap situation is likely to make adding free agents difficult for years to come. Moreover, with money to spare, teams are even more likely to retain their own free agents if they are at all worth it.

Lichty compares my suggestion to that of the Twins' signing of Sidney Ponson--low risk. I agree. But it's even less of a risk in the NFL where contracts aren't guaranteed and cap rules inform decision-making.

I appreciate the comments, but think you still remain unclear about my point or simply are making a point of your own. The latter is fine with me, it's just a point that I believe nobody would dispute--don't intentionally spend gobs of money on bad players.

VG

Lichty said...

I think the Ponson comparison is apt. He is on a minor league contract which is also non-guaranteed, but yout point is taken.

If the Vikes ever get rid of Brizyinski, you are the man they should tap. You understand the cap as well as he does.

I agree that the implications of so much money out there is that there will be fewer cap casualties and salaries will eventually rise. That is why in the short term, there is nothing to spend it on, as teams lock up their own players and still have oodles of cash on hand. Until salaries rise to meet the gap - eating up cap space - there will not be much action on the FA market.

Some interesting things should develop. I think that the trade market will be reinvigorated as teams try to improve but cannot through FA. Trades - apart from draft day moves - in the NFL have been almost no existent since the mid eighties (shudder-Herchel Walker) and that could be interesting.

It will take several years for the salaries to keep up with the available cash, and then we will see the pattern happen again - with FA's being abundant. That is why, as you argue, it is key to not lock up the money long term, but spend it in the short term.

Again excellent analysis and I wasn't really away - I just was not commenting. A couple things contributed to my silence. One, I was engrossed with pretty dramatic Twins season, and Michigan was having a good year. Those teams kind of spent my energy, so when you said all there was to be said, I didn't feel I need to chime in.

I am glad you are back posting as I do not think that there is anyone who understands the game, the Vikings and the League as well as you.

boognish said...

I'm not against the Vikes signing FA's this year, I just think that taking it slowly is a good idea this year.

Right now, everybody is in a feeding frenzy to sign a bunch of mediocre players. Things will slow down soon and the Vikes can get more bang for the buck.
And that's when some of these other teams will get in.

Also, it keeps the players already on the roster from getting pissed that some mediocre player is going to get rich, just from being at the right place at the right time.

This year is the first year that shows the effects of the new CBA. What will happen is that teams will overpay for mediocre free agents and three years from now, be up against the cap again. With the new CBA, there just aren't going to be elite players available and if they are, there will be teams willing to WAY overpay them. Some of the OL-men in this year's FA are getting Hutch type contracts, without having ever been to a pro-bowl.

Wilf jumped on FA last year, and I assume he's willing to spend what he needs to this year as well. FA is a long way from being over and I fully expect that we'll sign someone along the lines of Moulds or Horn.

I like their approach this year and don't think we'll regret having passed up on the likes of Kerney in the future.

Lichty said...

VG can correct me if I am wrong, but it's not the new cba - which for all intents and purposes was the same as the last one, rather the fact is that league wide revenue increases have driven the cap up so that teams are flush with cash.

In short, the league has been hit with inflation - too much cash to spend on not enough goods.

Vikes Geek said...

To get the Players' Union to agree to extend the CBA, the NFL offered to revise the formula for sharing revenue with the union. As a consequence of the modifications, a salary cap that was already set to increase approximately $10 million increased another $8 million. This year, without any changes to the CBA, the cap increased another $7 million. The result was approximately $14 million in additional cap space due the the previous CBA and an additional $11 million due to the changes made in calculating revenue-sharing figures. Even without the revised formula, many teams would be flush with cap space. With the revised formula, most teams are in the black.

Will teams catch up with the cap? Of course. That's the nature of caps in professional sports, but, more importantly, the goal of the NFL's parity-laden system. With the NFL's unique cap floor, too many teams remain too close to having competitive teams not to spend a bit more to attempt to win a championship. That fuels competition for players which fuels higher bids on players in free agency.

Given the tremendous cap increases in the past two years, it will take time for teams to catch up to the cap. That's the consequence not only of a larger cap figure, however, but also of teams getting smarter about front-loading contracts and not trying to get the best player at every position every year. Teams are also wiser about how to allocate cap room by position--something that remains a painful work in progress, however.

VG