30 May 2012

The Underlying Math of a Brees' Holdout

If anyone out there realistically foresaw this stage of gridlock and, perhaps, animosity in the Brees' contract saga, then congratulations for your incredible prescience. 

In an offseason of bizarre, uncharted territory, here's a little bit more: a future Hall of Fame QB coming off the best passing season in NFL history, unable to come to contractual terms with the team who employs him in a city where "deification" doesn't do his reverence justice.  

This is a deal that literally could have--and should have--been finalized years ago, yet somehow its open-ended conclusion torments in seeming perpetuity. To be fair to all parties involved, this is a monstrous and watershed moment for both Brees and the Saints; and to Mickey Loomis' credit, he's correct when he says "getting it right" is of monumental importance. That much is not debatable. What is debatable is why it's gotten to this point, but that has been hashedre-hashed, and deconstructed and I'm not going to bore you with it again. 

Instead, I'm going to examine the legitimacy of Brees sitting out the 2012 season. Stop rolling your eyes and saying unkind things about me. Actually, go right on ahead. I don't really give a shit.  

First, let me make clear that I think it's a remote possibility that Brees actually holds out for an entire season. With that said, I think it's a greater likelihood for him to forgo the season than it is for him to play under the franchise tag for 2012. 

Remember that Brees has twice played under the insecurity of, for all intents and purposes, a one-year contract: 2005 and 2011. In one of those seasons ('05 under the tag), he shredded his shoulder and faced a grueling rehabilitation just to play again. 

In the other of those seasons ('11), in case there was any lingering doubt as to his definitive greatness, he shredded the record books. 

Extremes of polarity. 

But now at age 33 and at the top of the heap, Brees won't be playing again on a one-year contract. 

The likelihood is that Brees will sign a long-term deal before July 16, even if it means accepting a deal that represents a less-ideal version than he once actualized. 

But if there is fractious acrimony; if Brees does feel lowballed; if Loomis does underestimate Brees' resolve, then we will be faced with the reality that Brees might indeed hold out for the entirety of 2012 and enter 2013 as a free agent. However remote, there's a vicious, imperfect storm brewing that isn't too far away. 

To clarify the specifics, if Brees sits out 2012 and is re-tagged by the Saints in 2013 (which he will be), he will become a "non-exclusive rights" free agent. What this means, simply, is that Brees is free to negotiate with any team in the league and, moreover, the Saints have the right to match any offer Brees receives. If Brees potentially signs with another team, the Saints receive 1st and 3rd-round draft picks (from the team who signs Brees) as compensation for his non-exclusive rights. 

If you're a masochist, you can read about it yourself on pages 51-52 of the CBA if you don't trust me. 

A few things: One, if the Saints and Brees can't come to terms now, you can forget about them being able to find an agreeable price once Brees hits the open market in 2013. Two, because a team will have to forfeit draft picks in exchange for signing Brees, it might mitigate the vast sums of money thrown at Brees in free agency but probably not by much, especially when you consider the steep price the Redskins just paid to trade up and draft the talented, yet unproven Robert Griffin III.

Hall of Fame-caliber QBs don't come around too often. And when they do, virtually every NFL owner, especially the profligate among them, will not be gun-shy in their courtship.  

Absent a long-term deal, does it make sense--financially--for Brees to sit out in 2012?  

It's not so absurd as it might appear at first glance. Let's do a little rudimentary math. 

Were Brees to play under the franchise tag in 2012 and 2013, he'd be due around $37 million in guaranteed money: a ~$17M franchise tender in 2012 plus a ~$20M franchise tender in 2013.  

Conversely, if he sat out 2012 and signed a contract on the open market in 2013, he'd be in line for perhaps even more immediate, guaranteed money than the $37 million he'd earn combined in 2012 and 2013 under the successive, one-year tags. 

In 2004, Peyton Manning's signing bonus alone was $34.5 million. That was eight years ago. Granted, Peyton had (theoretically) a longer career ahead of him at that point but it's a noteworthy frame of reference. Considering the escalating salary scale, Brees' resume, and his recent, peerless performance, it's not beyond the bounds of credulity that some team would offer him a signing bonus in the neighborhood of $40 million. 

In this short-term scenario, Brees wins in two ways. One, it's eminently possible he can earn more via signing bonus/guaranteed money in 2013 alone than he can by playing the next two seasons under the tag. Two, and of greater importance, he avoids the disaster scenario of sustaining a career-ending injury while playing under the tag, which would otherwise decimate his earning potential. 

When you consider the "floor" in the grand scheme of this thing, the absolute worst outcome for Brees would be to play under the tag in 2012 and suffer an injury that ended both his career and earning power as an NFL QB. 

He'd make $17 million, surely an astounding sum but a mere pittance compared to his true long-run value in today's NFL market. 

Playing under the tag in 2012 would be, by far, the most suboptimal decision for Brees'  expected value. Brees is certainly not dumb, and this simple scenario is why he'll likely never play under the tag. He'd be risking tens of millions of dollars--something he just risked in 2011--and something he almost certainly won't do again.  

The obvious drawback to sitting out 2012 is the lowering of Brees' long-term ceiling in earnings. Were Brees to play in full the next five seasons, he's looking at accruing something in the neighborhood of $110 million in salary (by my estimations). 

On the other hand, were Brees to sit out 2012, sign an enormous contract on the open market in 2013, and play the subsequent four seasons in full, he would probably accrue something approximating $100 million (again, by my estimations). 

So he's not truly losing an entire year's salary of $17 million if he sits out in 2012. 

Moreover, where he lowers his ceiling and sacrifices, say, ~9% of his potential max gross earnings for the remainder of his career, he raises his floor substantially--exponentially, really--by guaranteeing a larger share in case of catastrophic injury and he probably guarantees himself more money in the near-term ('12/'13). Win win. 

It's a balanced strategy that ensures a financial windfall, one that enables him to get closer to his true expected value while avoiding the pitfalls of variance in the form of a career-ending injury. 

While it seems crazy to think Brees might sit out 2012, it's not that far-fetched if the parties can't reach a long-term deal.

What's more likely is that Brees and the Saints will negotiate until the last moment, and Brees will sign whatever best long-term offer is available to him at that point. From all available evidence, that's his nature. When you strip away everything else, it would seem exceptionally out-of-character for Brees to skip a season in a contract dispute and hurt his team (and city) in the process. 

But we've been surprised before. Let's hope we're not again. 


  1. Excellent read that utilizes facts ... a rare thing today indeed.

  2. Finally a good thought provoking article instead of the "pay the man" scenarios that are floating around

  3. Best passing season in NFL history my ass... Yards don't score points.

  4. Thanks for reading. I hope you stick around and continue to read.

    I'll happily overlook any of your future, terribly lame comments that miss the point entirely.

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