So far this offseason Kansas City Chiefs GM John Dorsey has been ... surprising. After a pretty quiet time in free agency last year, Dorsey has been wildly active; free agent signings, trades, contract restructures, and all kinds of general shenanigans have taken place.
While my yearly "Cheers and Jeers for Free Agency" column will come out sometime in the next week or two (I'm holding off, as I'm not entirely sure Dorsey is done addressing needs. Stefen Wisniewski is still on the market. I'm just saying, John), I've noticed something in Chiefs Twitter and the comment section here that needs to be addressed pretty quickly; NFL contract blues.
While many Chiefs fans have been thrilled with the addition of Jeremy Maclin and Ben Grubbs, as well as the Chiefs retaining Ron Parker (who was really solid at safety, guys. He just was. Now let's all send letters to Bob Sutton begging him not to play corner anymore), there's been a lot of talk about overpaying players. Maclin, Parker, and the much-debated Paul Fanaika.
This dissatisfaction with overspending is even apparent among the elite Chief minds.
We gave Ron Parker the $6M a year he wanted?!?— His Dirkness (@HisDirknesS) March 14, 2015
Here, we have an obviously frantic HisDirkness (well, as frantic as Dirk every gets. Which is ... not very frantic) clearly responding to what was a flurry of "The Chiefs gave Ron Parker a 5-year, $30 million dollar contract" tweets.
It probably struck the people who were freaking out about Parker's contract as odd when, a very short time later, Dirk tweeted...
Ron Parker's contract, essentially: 3 years, $13.5 million. So, nowhere near the initial reports, obviously, as many of you forewarned me.— His Dirkness (@HisDirknesS) March 15, 2015
Now, we can see there was some kind of mistake in the initial surge of tweets Dirk read. This mistake led to an otherwise brilliant mind (yes, I'm still sucking up to Dirk to try and make up for leaving him out of my AP staff PFF rankings. Criminal stuff on my part) to believe the Chiefs had WILDLY overpaid for a free safety with one good year under his belt.
So ... what gives? Well, the simple fact is there's still a pretty widespread misconception about how NFL contracts work. While some on Twitter and here and the comments are doing everything they can to clarify things, I think it'll be helpful to look at Parker and Maclin's contracts and see just how much they're actually limiting the team's cap space in the future.
(Full disclosure ... I'm not going to go super deep in the murky world of NFL contracts. I'm an attorney, so that stuff fascinates me, but math is evil. So we want to be careful how far into the water we go here).
Let's start with Jeremy Maclin's contract. It was widely reported the contract was five years and $55 million. This naturally led to people saying, "Oh, OK, $11 million per year." Some liked it, some hated it. But the reality of Maclin's contract is very different from five years and $55 million. Let's take a look.
For starters, there is a fully guaranteed $12 million signing bonus that is pro-rated (or spread out) among all five years of the contract. This means every year of the contract there is a $2.4 million cap hit that is dead money if he is cut. Yes, I know that's not a promising start, but bear with me. As for the rest of his deal...
All right, without getting hung up on a lot of details, pay close attention to the last set of numbers on the right. Over The Cap (a site you REALLY should check out if you have not. So much fun to play with the numbers) is kind enough to save us from all that evil math and tell us what really matters in a given season; exactly how much money the team can save against the cap if they're forced to cut a player.
With the salary cap, the only really important aspect is that "cap hit - dead money" figure. That tells you how long a team is ACTUALLY tied to a player.
In Maclin's case, the "real" contract (what we'll call the "binding" part of the contract) is three years. Technically, if things are an absolute disaster, the team COULD cut him in year three of the contract and save a nice chunk of money, but $7.2 million in dead money is a lot to swallow.
But the simple fact is the fourth and fifth years of Maclin's deal are relatively easy for the team to walk away from if Maclin isn't living up to expectations. What this basically means is the Chiefs are locked into Maclin for three years of his absolute prime (remember, the guy is 26 right now) and can cut loose right before he hits 30 if things aren't shaking out the way they had hoped.
In its entirety, Maclin's contract is a good example of how a team up against the cap CAN sign a big-time contract without crippling themselves down the road. It's a three year investment that hopefully pans out for the full five.
Parker's contract caused a lot more people (like Dirk) a lot more angst. It was widely reported as a five year, $30 million deal. I completely understand why people were upset about this. After all, Parker has had one good year as a starter in the league at safety, and even that year was tarnished by some really rough games at corner early on.
But Parker's contract, in reality, is really nothing like it sounds on the surface. For starters, per Rotoworld and Spotrac, there was a $5 million signing bonus with only $8 million being fully guaranteed. Additionally, there's a lot of bonuses and incentives worked into the deal.
Now, besides one obvious typo (I really, really doubt Parker has $2 BILLION in dead money in 2016), this contract is insanely well-structured and NOTHING like a "$6 million per year" deal that you first hear.
It's a lot like Maclin's deal in that the Chiefs are tied to Parker for the next three years (as Dirk stated in his second tweet). And again, technically the Chiefs can save a few million dollars by cutting him loose in that third year, so one could even view it as only two years of being tied to Parker.
Also, notice that Parker's cap hit is well below $4 million in both of those "We can't cut him and save money" years? In other words, the years the Chiefs have to keep him around, his hit is WAY under that "$6 million per year" we all assumed upon first reading the contract.
What makes Parker's contract even better are all the "notes" you can read below the raw numbers. Basically, the only way this contract becomes a $30 million contract is if Parker stays healthy and plays well. Look at all those incentives at the bottom. Those incentives basically say "if Ron Parker plays a ton of snaps, hits a certain number if interceptions, and gets to the Pro Bowl, he gets an extra million dollars any given year."
I'll attach a poll, but I'm guessing most of you would be OK with an extra million going to a guy who had a year like that.
Basically, it means if Parker doesn't play well the team can cut ties before he's too much of a cap issue, and if he plays well they'll want to keep him. Pretty simple.
Some of the contracts John Dorsey was handing out in prior years were highly concerning to Chiefs fans. It seemed the nuances of contract negotiation were eluding him. That said, the contracts the Chiefs have been handing out THIS offseason have been well structured. Hopefully a little clarification on the structure of two of the bigger deals can set some minds at ease.