Exploring the details of Sammy Watkins’ new contract

If it had happened 48 hours earlier, we might have thought it was an April Fools joke.

Before dawn on Friday, friend-of-the-site Terez Paylor of Yahoo! Sports broke the news that Kansas City Chiefs wide receiver Sammy Watkins had signed a new one-year contract that would pay him $9 million for the 2020 season and carry a salary-cap hit of $16 million — thereby giving the Chiefs $5 million in desperately-needed cap space.

For weeks, fans and media (including myself) have speculated about how the Chiefs might find a way to reduce the $21 million cap hit for Watkins contract in 2020. Hardly anyone even considered the possibility that Watkins would be willing to simply tear up his old contract and sign a new one-year deal for $5 million less than he was set to earn in the coming season.

Yet... that’s exactly what happened. To say the least, it was a surprise.

But as more details emerged about the deal, it became less surprising. A series of tweets from NFL Network’s Mike Garafalo laid out the structure of Watkins’ deal:

• $1 million signing bonus
• $7 million base salary
• $62,500 per-game roster bonus

Since Watkins appeared in 14 games during the 2019 season, 14 games of per-game roster bonus will be considered likely-to-be-earned (LTBE) for the 2020 season, making his cap hit a little less than Paylor originally reported: $15.875 million. (Remember: torn-up contract or not, the team still has to account for the last $7 million of the $21 million signing bonus Watkins received two seasons ago).

But because Watkins achieved none of the following benchmarks in 2019, the rest of the incentives Garafalo laid out will be considered not-likely-to-be-earned (NLTBE) in 2020:

• 75% of regular-season playing time (or seven touchdowns): $1 million
• 8 touchdowns and team makes playoffs: $750,000
• 65 catches and playoffs: $750,000
• 800 yards receiving and playoffs: $750,000
• Team wins AFC Championship (with 50% snaps in the game): $1.25 million
• 65 catches and AFC Championship: $1.25 million
• 800 yards and AFC Championship: $1.25 million

This means that even if Watkins earns these NLTBE incentives in 2020, they will be counted against the salary cap in 2021. By the same token, if Watkins fails to earn LTBE incentives as expected (for example, he plays in only eight regular-season games in 2020) the difference will be credited against the 2021 cap.

These NLTBE incentives add up to a total of $7 million, which means Watkins could conceivably earn $2 million more than he was set to make under his previous contract.

And finally... the big kicker of the deal:

• No-trade clause

Clauses prohibiting a trade are pretty rare in NFL contracts. There are likely two reasons for this one.

The first is that Watkins wants to remain with the team. In an interview during Super Bowl week, Watkins made it clear that he loves playing for head coach Andy Reid.

”You never know. I have a lot of dreams and a lot of things I want to do. But hopefully I am here for the next...” he paused, considering “...until coach Reid retires. When he goes, I’m going to go. So, if I’m here a long time, I would definitely want to be here. And if I’m not, I’m going to take my dreams somewhere else and make the best of it.”

The other reason is the structure of the incentives. Everyone knows that Watkins is the team’s third receiving option — and that Mecole Hardman and Demarcus Robinson will also be competing for playing time. But should a player like Tyreek Hill or Travis Kelce (or even Hardman or Robinson) be lost early in the season, Watkins’ chance to achieve those regular-season benchmarks (particularly the first one) will increase.

With the no-trade clause, Watkins (and his agent) are simply making sure that should this happen, the Chiefs won’t be tempted to trade him away before the midseason deadline to save some money against the 2021 cap. (In this scenario, it seems unlikely the Chiefs would do this — but you can’t blame Watkins’ camp for being sure).

My take

While everyone outside the Chiefs’ inner circle was focusing on solving the problem by trading, cutting or extending Watkins, general manager Brett Veach came up with a solution no one was really considering. It helps solve the team’s current cap problem and keeps Watkins on the team at a reasonable price — while still giving him an opportunity to earn the salary he was expecting in 2020. And perhaps best of all, the deal does all this without committing the team to another two years with Watkins.

Bravo to Watkins for making a team-friendly deal — and bravo to Veach for finding the way to do it.