Thanks to Rom, Ron, BD, Fred, Patrick, and Tom for the questions and idea for this article
I got a lot of contract and cap questions from my last two articles (“Explaining Howie Roseman’s focus on the future cap” and “Yes, Jalen Carter’s extension will be over $40M a year… and worth it”) and I wanted to dive into contract rules, how Howie structures his deals typically, and what it means for free agents and extensions to better answer the various questions.
A quick primer on contract rules
This will by no means fully cover NFL CBA contract rules as it would take days and I think if you are reading, you understand a ton of this already, but I’ll hit the most important points for how Howie approaches contracts:
The “Deion” rule…
Shady Jerry Jones’ 1995 contract with Deion Sanders used extremely low annual salaries until a 7th-year massive (at the time) $13M salary that was never going to be paid and spread the $12.99M signing bonus over those 7 years. This allowed Jones to keep cap hits extremely low in early years and spread the bonus out further than the true life of the contract.
The NFL reacted with changes to limit cap manipulation that still impact contracts today, with the primary changes being:
- Capped signing bonus proration to 5 years, eliminating the ability to push too much money too far out
- Required that salary at least equals the pro-rated signing bonus amount (“salary” here includes actual salary plus option, roster, and workout bonuses)
… and GMs responses
The Deion rule did truly limit some salary cap manipulation, primarily by capping the length of signing bonus proration, but salary-cap savvy GMs responded to keep their flexibility:
- Use of contract void years to allow bonuses to be spread out. Contracts allow a maximum number of void years equal to 5 minus the number of years remaining on the contract which is why you will see 2, 3, or 4 void years on different deals.
- Increased use of annual option bonuses that gave GMs something that acted like a signing bonus (pro-ration into future years) but not activated immediately on signing, allowing significant money to be pushed into the future
Key things to remember are contract costs can be pushed out but are limited to the maximum number of void years, and option bonuses are an extremely useful means of staying compliant with the Deion rule while also pushing cap out.
Howie’s contracts and the cap
Howie clearly uses the current rules and his owner’s willingness to spend to be aggressive on the cap. And while NFL contracts can be complicated and there are exceptions, Howie’s approach to contracts is pretty consistent.
- Free agent contracts 3-years in length with a 2-year out – Only Brandon Brooks and Rodney McLeod in 2016 were 5-year deals, every other Howie free agent signing has been a max of 3-years
- Near league minimum salaries – If you scan the Eagles contracts, the only players with a salary higher than $1.1-1.2M are guys still on their rookie deals, where the salary number is based on the rookie wage scale.
- Significant guaranteed money at signing – Howie is top in the league at 53% of the total contract guaranteed at signing (league average is 45%) with signing bonuses typically between 20-30% of the total contract
- Large annual option bonuses – The majority of Howie’s contracts are paid in annual option bonuses that get pro-rated, typically 60-70% of total contract value and starting in year 2 with only the first one guaranteed.
- Cap hits pushed into future years – Typically, Howie’s contracts have cap hits around 9-10% in year 1, 15% in year 2, 22-25% in year 3, and the remaining ~50-55% in year 4.
To illustrate these, Bryce Huff’s 3-year, $51M deal is a pretty simple and standard “Howie” structure:
A few things to note:
Finding Howie’s planned “out” year
Howie always has a planned “out” year which you can spot when the non-guaranteed option hits. For Bryce, this is 2026.
A ton of people have been pushing for Bryce to be released this off-season, saying the Eagles will save his $15.58M option bonus which is just not accurate. While it is called an “option” bonus, there is nothing at all optional about Bryce’s 2025 option bonus as it is fully guaranteed at signing.
How void years are created off of the signing and option bonuses
And, note that both the signing bonus and option bonuses independently get pro-rated over 5 years, beginning in the year they are granted – the signing bonus from 2024-28, the 2025 option from 2025-29, and the 2026 option from 2026-2030.
This is where the “max void years of 5 minus remaining years of the contract” comes in… for the 2025 option, there are 2 years left on the contract so it creates 3 void years… the 2026 option has 1 year left and creates 4 void years.
Howie’s means to restructure deals
You will often hear GM’s restructuring deals which means converting salary into signing bonus and pushing cap into the future. That doesn’t work for the Eagles as there is no salary to restructure since it is always near league minimum. The lever Howie pulls instead is an extension.
While the contract mechanics are all the same, it’s interesting to see the cap impacts when Howie signs free agents vs. extending his guys. Below are the average cap hit distributions for years 1 through 5 for the major recent free agent signings (blue) vs. extensions (orange).
Howie often dramatically lowers cap hits in years 2-4 by using the remaining year(s) left on a deal to spread more of the cap into the future.
This off-season’s Saquon extension shows this extremely well. Saquon’s original free agency deal (blue line) and this off-season’s extension (orange line) reset his cap hits, dropping both 2025 and 2026 while adding cap hits into 2027.
Another example is AJ Brown. While he wasn’t a free agent signing, him coming here in a trade with a new deal is effectively the same thing. His 2022 new deal (blue line) and 2024 extension (orange) show how much Howie again lowered his cap hits.
Extensions, of course, aren’t “free” and come with more guaranteed money and/or years. But if Howie feels the risk is low with a guy (age drop-off, etc.), he will not hesitate to pull this lever.
Howie’s calculus and the risks
Howie would (rightly) rather use cheaper future dollars when the cap is higher than today’s dollars, which is why he pushes so much into the future. And his view on risk is as long as he doesn’t make multiple big mistakes on player signings, he can handle any dead cap.
We saw this with the Bradberry signing and current Bryce Huff deal. Both were bad signings where he got really no on-field value but it didn’t limit him at all.
The sign of a team in a bad cap situation are cap casualties where they are releasing players ahead of time that they would prefer to keep because they can’t afford them. Howie rarely if ever is in this situation. Even CJGJ this off-season wasn’t a “forced into it” move due to current cap pressure, it was a move to make future room for coming extensions.
I love the info and explanation – will it ever catch up to the eagles where they are in salary cap issues? Theoretically he could do this for the next 15 years unless rules are changed? And besides the outlay of initial guar money, if an owner had the cash why wouldn’t they replicate this?
Really good question, I touched on it at the end but not deeply. Primary issue would be if he signs multiple bad deals (but bad deals are bad deals even if you aren’t pushing cap into the future, it just will stick with the Eagles longer). And your point on if the rules change, it would impact them although I doubt a new CBA would cause such dramatic changes to hurt them.
On owners, more and more are doing this although some do it differently. The Chiefs use large salaries and little dead cap, but when they need space, they just restructure people. I prefer Howie’s approach but they get to a similar end point. Another key point for Howie which I didn’t touch on at all is how aggressive he is extending guys early, this gets him guys a lower than market AAVs by the time the deal is in flight (for the player, they get a big guaranteed amount sometimes 2 years early). The Cowboys are the opposite of this, waiting to the last minute to pay guys.
Good article greg! What do you think about the rule forcing teams to escrow all guaranteed money? That seems to be advantage eagles and something the league might wanna do away with. As you pointed out the eagles give out higher guarantees, which is easier when your owner is willing to escrow moere. AND to more players which also requires an owner willing to tie up those guarantee into zero interest bearing escrow accounts
Really good point on the escrow, this is another point that is very real in the real world as it is an owner’s cash, but doesn’t get seen when we talk about cap.
I didn’t realise the signing bonus and the option bonuses have staggered start times but are limited to five years! Makes a lot of sense. The biggest cost risk is if the player leaves, right? Or is retirement worse?
I like that howie has lots of guaranteed money in his deals, i don’t like that players are left in limbo. Probs makes them better performers if they don’t have to worry, less likely to play through injury etc etc
As long as you keep pushing money into the future and never try to revert back to paying as you go, there really isn’t an issue – it’s the same money, just “shifted right” into the future. For me, the biggest risk is you pay guys that turn out to not be good (underperform or hurt). Risk is limited a bit as Howie is typically only guaranteeing 2 years (first signing year and then the 2nd year option bonus) and he is able to (and assuming he will have to) absorb at least a bad deal or maybe two. He just can’t have 4-5 bad deals at a time.