There appears to be a bit of a disconnect in understanding between the value of improving a roster via free agency and improving a roster at all costs via free agency.
The former is a necessary and important component of roster construction, as even the best front offices cannot exclusively build a contending unit via the draft-and-develop philosophy. Eventually, every club has to dip its toes in the free-agency waters and supplement the core they have in place. However, this does not mean that teams should just throw money at a problem with reckless abandon.
We have previously written about the return on investment for free-agent spending. Put simply, teams should expect improvement when spending in free agency, but they shouldn't exactly expect to get a good bang for their buck. Furthermore, on average 68.1% of free-agent signings have their best season with the new club in the first year. It’s not exactly a long-term roster-construction approach, even if you do hit big, and you’ll constantly be looking to chase that production in the near future.
Below is the cost in total guaranteed dollars for 1/10th of a win in the season following the signing.
per Guaranteed $
per Guaranteed $
The teams with the worst return on investment above: Falcons ($40 million in total guaranteed dollars for 1/10th of a win), Lions, Titans, Texans, Bengals, Browns, Jets, Raiders, Chargers, Jaguars, Broncos, Cardinals.
Their cumulative win-loss records from 2016-20: 392-562-6 (41%). The Titans are the only team of the 12 listed to have a winning record over the five-year span. If they hadn’t pulled off one of the best value trades in NFL history by landing QB Ryan Tannehill on a one-year, $2.225 million contract for a fourth-round pick, the odds are that they’d be in the same boat as every other team.
Now, there’s obviously selection bias here, as teams that struggled the year prior are going to spend more in free agency in an effort to fix a poor roster. But that’s the point: you can marginally improve and round out a roster in free agency, but you can’t fix it.
Five of the top six teams in total guarantees spent in free agency from 2016-20 are on the above list: 1. Jaguars, 2. Raiders, 4. Jets, 5. Lions, 6. Browns. The Jaguars had the 29th cumulative win-loss record, Raiders 20th, Jets 32nd, Lions 24th and Browns 30th.
At the end of the day, organizations need to have a string of good drafts or an elite quarterback who can cover up all the team's warts. And even they often can’t be enough if the rest of the roster is poor.
Good value signings
With all of that said, there are still great ways to get better via free agency, and teams should not just ignore one avenue to improvement.
Since creating our contract projections, one useful application has been going back and looking at the biggest disparities between our valuation of a player in a given offseason and what they ended up signing for and then seeing how things fared.
As we discussed in the article introducing the projections, the vast majority of contracts end up reasonably close, making the outliers all the more interesting to study.
From 2016-20, we have roughly 3,000 data points to work with, including extensions from the original team in addition to unrestricted free agents swapping teams. Certain market conditions are designed to inherently deflate the value of a second contract, one prime example being the restricted free-agent tenders for undrafted players. We know that “production value” is not always going to fall in line with market value. Look no further than an example from this offseason already, with Seattle Seahawks nose tackle Poona Ford.
The #Seahawks are re-signing NT Poona Ford to a two-year deal that can be worth close to $14 million with incentives, per source. Ford gets over $4.4M in 2021 — more than the second-round tender — with a chance for bigger money in 2022 and free agency in 2023, when he'll be 27.
— Tom Pelissero (@TomPelissero) March 17, 2021
Ford was set to play on the second-round RFA tender for $3.384 million. He has roughly $1.8 million in career earnings over three seasons after going undrafted out of Texas in 2018. Thus, the leverage is strongly in Seattle’s favor when working out an extension this offseason. While our projections account for draft stock — which follows a player throughout their career — early extensions like this work in the team’s favor.
We still don’t know the exact details of Ford’s two-year extension, but even the maximum value of $14 million over two years is a bargain. His current projection is $9.366 million per year after earning a 79.8 overall grade in 2020 on a career-high 703 snaps. One could argue that given the $3.384 million was already set in stone for 2021, Ford actually signed a one-year extension for around our projection of $9.366 million, but we digress.
For the players who do reach free agency, the leverage shifts to their side of the table for the first time in their careers. Multiple suitors can engage in negotiations and drive prices up, all but ensuring that the most coveted players will be “overpaid” relative to their production. This is especially true at premium positions, where players know clubs could be desperate for any kind of upgrade that comes with at least a high floor. This is where teams can get themselves in trouble.
The value signings fall at less coveted positions, where teams don’t need to back up the Brinks truck to land a really good player, as well as in the second and third waves of free agency when many clubs have already spent a significant portion of their cash budget for the offseason. Below are some of the players we thought signed the most team-friendly deals in years past:
- CB Casey Hayward Jr. contract, 2016: Three years, $15.3 million ($5.1 million average per year)
- CB Casey Hayward Jr. projection, 2016: $14.12 million per year average
Hayward signed an early extension two years later for $11.4 million per year, more than twice his original deal.
- DI Akiem Hicks contract, 2017: Two years, $10 million ($5 million average per year)
- DI Akiem Hicks projection, 2017: $13.46 million per year average
Hicks signed an early extension one year later for $12 million per year, more than twice his original deal.
- DI Sheldon Richardson contract, 2018: One year, $8 million
- DI Sheldon Richardson projection, 2018: $13.496 million per year average
Richardson signed a three-year deal for $12 million per year the following offseason with the Cleveland Browns.
- S Adrian Amos contract, 2019: Four years, $36 million ($9 million per year average)
- S Adrian Amos projection, 2019: $15.135 million per year
Making Amos the highest-paid safety in the NFL may seem crazy, but look at it this way: since signing in 2019, he has generated the second-most wins-above-replacement at the safety position (1.433). He trails only Denver Broncos standout Justin Simmons, who has generated 1.523 wins above replacement over the last two seasons. Simmons just became the highest-paid safety in the NFL last week, with a deal averaging $15.25 million per year.
These contracts obviously aged very well for the club. Even with Sheldon Richardson, who signed that original one-year deal with the Minnesota Vikings. His next contract with Cleveland earned the Vikings a third-round compensatory pick.
Here are the lower profile, calculated contracts from this current offseason that stand to provide surplus value:
|Unadjusted Projected Average
|S Anthony Harris||$4 million||$12.424 million||$8.424 million|
|WR John Brown||$3.75 million||$9.685 million||$5.935 million|
|WR Marvin Jones Jr.||$6.25 million||$11.187 million||$4.937 million|
|WR Will Fuller V*||$10.625 million||$15.4 million||$4.774 million|
|ED Markus Golden||$2.5 million||$8.284 million||$5.784 million|
|ED Takkarist McKinley||$4.25 million||$9.426 million||$5.176 million|
|ED Tyus Bowser||$5.5 million||$13 million||$6.677 million|
|CB Desmond King II||$3 million||$7.278 million||$4.279 million|
|CB Troy Hill||$4.5 million||$8.627 million||$4.127 million|
* Will Fuller still has one game remaining from his six-game suspension, so the contract will come out to $10 million even. The unadjusted projection is based on PFF WAR, which Fuller was obviously unable to accumulate for five games in 2020, but it's no surprise to see the contract come in lower than projected, given that information.
Smart overall approaches
Finally, an overlooked aspect of adding pieces to a roster is that you need a sound holistic approach. No singular move, even if it’s the best move of the offseason, is going to dramatically improve a football team. A handful of smaller deals addressing a specific position group, like overhauling an offensive line or adding a bunch of talent to the secondary, can have huge returns. We’ll take a look at two AFC North teams that did just that.
Baltimore Ravens: Dominating the compensatory pick game yet again
The compensatory pick system was introduced in the 1993 collective bargaining agreement along with the salary cap and unrestricted free agency itself, thus leading to the first crop of compensatory picks being awarded in the 1994 draft. Since that season, no franchise has earned more compensatory picks than the Baltimore Ravens with 53 (the Dallas Cowboys are the next highest with 47).
This offseason yet again illustrates exactly how the Ravens take advantage of the system. First, before free agency began, Baltimore was looking for an upgrade along the interior of its offensive line. Because former New York Giants G Kevin Zeitler was cut as opposed to being an unrestricted free agent, he does not factor into the compensatory formula.
Next, they had three edge rushers who were unrestricted free agents: Matthew Judon, Yannick Ngakoue and Tyus Bowser. As you can see above, Bowser was one of our favorite signings this offseason in terms of surplus value provided over the contract. In addition, letting Judon and Ngakoue depart puts the Ravens in line to earn fourth-round compensatory picks in 2022 for both players.
Cleveland Browns: Sign top-of-market guys at cheaper positions, take fliers at expensive positions.
The decision-makers across the NFL have made it quite clear this offseason that, for the most part, they don’t agree with PFF’s belief that coverage is more valuable than pass rush (though PFF is always checking ourselves and re-examining priors to continue to learn and grow in our analysis). Pass rushers with high sack totals continue to be overpaid, even when their underlying metrics are not very encouraging (Bengals ED Trey Hendrickson, Rams ED Leonard Floyd, Titans ED Bud Dupree, to name some examples).
However, the Browns’ very smart and analytically driven front office seems to have adopted the coverage > pass rush approach in a sense this offseason, and the way they went about it could prove to be very wise. One component to this belief of PFF’s lies in the fact that secondary players are still underpaid in our eyes, so the value generated compared to the contract can be immense. We’re not saying teams shouldn’t add edge rushers, but if a Tier 2 edge rusher hits free agency, he’ll be paid like a Tier 1 edge rusher, and that’s how you end up like the Atlanta Falcons approaching Dante Fowler Jr. for a pay cut one year into a three-year, $45 million contract that was largely based on his 11.5 sacks from 2019 playing next to Aaron Donald.
The Browns were able to sign the best free-agent safety available in John Johnson III and another former first-round edge rusher in Takkarist McKinley for $17.5 million in first-year cash. Fowler received $16 million in first-year cash from Atlanta last offseason. The Johnson deal (three-years, $33.75 million) has very strong guarantees ($24 million total) and a protected option bonus in 2022 that lowers that first-year cash flow from the signing bonus, but the point remains. In Fowler’s first season in Atlanta, he had 31 quarterback pressures on 384 pass-rush snaps (8.1%). In McKinley’s last full season in Atlanta in 2019, he had 35 quarterback pressures on 298 pass-rush snaps (11.7%). McKinley of course bounced around the NFL last year and dealt with a nagging groin injury, but he could prove to be a great addition in the second wave at nearly a quarter of the cost.
The other defensive back Cleveland added, CB Troy Hill, has experience playing at wide corner and most recently in the slot. He presumably will be the slot corner for the Browns between Denzel Ward and Greedy Williams on the outside. At $4.5 million per year, this is a premium contract for slot cornerback in today’s game (Mike Hilton signed for $6 million per year with Cincinnati, the largest deal of the offseason for a slot cornerback).
In 2020, among all cornerbacks that logged at least 50 snaps in the slot, Hill’s 89.2 coverage grade ranked third. His seven forced incompletions tied for third, and his 18 defensive stops tied for first with Ravens CB Marlon Humphrey. This all comes in Hill’s first season playing primarily in the slot, and he was a capable wide corner in years past who could fill in for Williams or Ward if they miss time again in 2021. These are the guys you should be paying a “premium” for because improving your secondary this much for just $9 million over two years is worth the price every time. And if it doesn’t work out, the downside is minimal.
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