Kirk Cousins and His Coming King-Sized Contract, Part 4

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January 17, 2018

By Steve Thomas

 

Kirk Cousins is about to become insanely wealthy. Photo credit: Thomas Lawrence

Well, it’s that time again – the time of the offseason where I feel the need to prattle on, and on, and on, about Kirk Cousins contract possibilities.  I can’t begin to describe just how much I didn’t want to have to write this column.  My primary fear is that I’m going to be up to Part 10 before the Redskins’ never-ending waltz with this player takes its final spin.  I apologize for torturing our readers with this topic, but it remains the elephant in the room until he either leaves this franchise or is signed to a multi-year deal.  If you would like to read the previous iteration of this column from March, 2017, click here: http://www.thehogsty.com/2017/03/27/kirk-cousins-and-his-coming-king-sized-contract-part-3/.  If you would like to read my previous analysis of comparable quarterback contracts from July, 2016, click here, because I’m not going to update it again here: http://www.thehogsty.com/2016/07/19/updated-kirk-cousins-and-his-coming-king-sized-contract/.  The fact of the matter is that the way the Redskins have handled the Cousins situation has made this moment much more difficult.  I’m not going to use this space to argue about what’s in Cousins’ head, what his father thinks, or how much certain local media personalities like or dislike him.  Instead, I’ll walk through the Redskins options that they have this offseason and let you make up your own mind about what you would like to see happen.

The Options

Right now, the Redskins options regarding Cousins are as follows:

  • Place the exclusive franchise tag on him at an approximate cost of $34.5M.
  • Place the transition tag on him at an approximate cost of $28.8M.
  • Begin to negotiate a contract with Cousins without placing any tag on him.
  • Let Cousins leave without either tagging him or attempting to negotiate a contract.

The Exclusive Franchise Tag

The Redskins bucked normal NFL trends and placed the franchise tag on Cousins for both the 2016 and 2017 seasons, paying him $20M and $24M respectively per season.  The Collective Bargaining Agreement provides that Washington can tag Cousins an unprecedented third year in a row at an approximate cost of $34.5M, an amount that would be fully guaranteed and thus result in an equivalent hit on the Redskins’ 2018 salary cap.  The CBA mandates that this tag, if used, must be the “Exclusive Tag”, which means that Cousins would not have the authority to negotiate deals with any other team.  The first day Washington can exercise their tag option is February 20, 2018.  If used, the team can then continue to negotiate a long-term contract with Cousins until July 16, 2018.  Beyond that date, the Redskins and Cousins can only enter into the one year franchise tag contract and may not discuss a multi-year deal until after the 2018-19 season.

If the 2018-19 salary cap is approximately $177M, and the Redskins have, generously, $5M in rollover cap, that puts the team’s final cap number at $182M.  At that cap level, Cousins’ $34.5M contract would use roughly 19% of available cap space, significantly more than the 13% that he used in this past season.

That’s the franchise tag for 2018.  What’s important about this issue, though, is that by using the tag, the Redskins establish a baseline salary figure for future years.  In simple terms, if the Redskins pay him $34.5M in 2018, they realistically can’t then expect Cousins to accept a reduction in his annual compensation from that figure going forward unless his performance declines.  This is why a long term deal, if it was going to happen, needed to happen in this past offseason in order to make it reasonably cap friendly.  Even I, in all my brilliance, can’t design a contact that escalates up from $34.5M in annual cash for 5 years and have it remain in the ballpark of reasonable in terms of cap usage.  Ideally, the Redskins would not want to go over approximately 15% cap usage at the most; starting at annual cash of $34.5M makes that very tough, if not impossible.  Cousins would without a doubt become the highest paid player in NFL history.  He probably will be no matter what.

Therefore, by tagging Cousins with the exclusive tag, in my view Washington is guaranteeing one of three possible results: (1) Cousins leaves at the end of the 2018-19 season because the front office realizes that they shouldn’t pay Cousins or any quarterback that much money going forward; (2) the Redskins use this offseason to negotiate a long-term deal with Cousins that uses the $34.5M figure and ends up being extremely disruptive to the salary cap in terms of usage, or (3) Cousins plays out the 2018-19 season on the franchise tag but negotiates a new deal with the Redskins at the end of next season.  The third option is without a doubt the most onerous towards the team.  Notably, it is very unlikely that using the franchise tag will result in a long-term contract between Kirk Cousins and the Redskins that will be friendly enough to the Redskins to not put the team in a bind faced by teams like the Tony Romo-led Cowboys or the Joe Flacco-led Ravens.  There just isn’t a good option that is likely to come out of this course of action unless Cousins himself decides to sacrifice for the good of the team – possible, not perhaps not likely.  After all, Cousins is a player, not management, and has no obligation to help the team manage its salary cap.  Could Cousins be altruistic enough to place winning over money?  Sure, but that’s generally a rare proposition.  More probably, it’s either going to just delay the inevitable arrival of a new quarterback in Washington or put the Redskins in a long-term cap bind.

The Transition Tag

The transition tag is basically a $28.8M right of first refusal.  The transition tag is another tool provided by the CBA, but the language that limits the use of the franchise tag to three consecutive years does not include the use of the transition tag.  In essence, the application of the transition tag by the Redskins would provide Cousins with a fully guaranteed one year offer worth approximately $28.8M, but would allow Cousins to negotiate a contract (including a multi-year deal) with another team this offseason.  In the event Cousins reaches an agreement with another team, Washington would then have the right to retain Cousins by matching the offer he received from the other franchise.

Sounds pretty good, right?  At least better than the onerous franchise tag?  Well, there are three fairly major problems with this for Washington.  First, $28.8M is still a high cap usage rate – approximately 16%.  Even if the team could live with this for a year, the bigger problem is that a number of teams have significantly more cap space in 2018 than do the Redskins.  Those franchises could easily design a contact that would either be out of Washington’s price range to match or would be a huge drain on the team’s salary cap.  In other words, the Redskins could go through the agony of tagging him, but would still very likely lose him anyway or destroy their salary cap.  And guess what?  That contract offer from another team doesn’t necessarily have to come before the draft.  It could come as late as early July, which would put the Redskins in huge bind at quarterback going forward.  Also: losing a player to another team via the transition tag does not come with compensation to the losing team via draft picks.  Absent something crazy happening, the only compensation Washington will receive is a third round compensatory draft pick from the NFL.  Finally, much like the exclusive franchise tag, using the transition tag would once again set a baseline for negotiations with Cousins for a long-term deal that would put significant stress on the salary cap in future years.  The Redskins would again be forced to rely on the generosity of Cousins to solve this problem when he has no real motivation to do so – cap management is the team’s problem, not his.

The No Tag Option

Not using any tag on Cousins this offseason has both the most risk and the greatest potential for successful resolution.  This option allows the most flexibility in terms of the Redskins’ ability to negotiate with Cousins without any preset salary floors that are created by the use of either the exclusive tag or the transition tag.  The downside, of course, is that no barrier exists preventing Cousins from leaving Washington for whatever greener pastures he so desires.  This is the scenario that those who like Cousins but believe that he wants to leave DC most fear, but it may be the only way to design a contract that can work for Washington under the salary cap and still preserve a degree of flexibility going forward.

Just let him leave

The last option, of course, is for the team to decide to jump off the burning Ferris wheel – or more accurately stated, the Ferris wheel that they lit on fire themselves – and not tag Cousins and also not try to negotiate with him.  If that happens, the Redskins will be back on the quarterback market, again, for what seems like the 167th time in the last 25 years, which is sub-optimal.

So, Steve, can we have a prediction?

I swore to myself I wouldn’t do this again, but here I am; the point in this column where I once again feel the need to take a stab at a realistic contract that Cousins might sign.  For those of you who didn’t read Part 3 of this column from last offseason, this was my guess at a contract offer last year that could’ve both worked for the Redskins and Cousins, thereby resulting in a deal:

Total value: 5 years, $130M, $20M signing bonus (all paid at signing), $57M guaranteed at signing, $62M total guaranteed.

Year 1, 2017-18 season: $17M base salary (fully guaranteed), $21M cap hit, $37M dead cap

Year 2, 2018-19 season: $20M base salary (fully guaranteed), $24M cap hit, $36M dead cap

Year 3, 2019-20 season: $20M base salary (non-guaranteed), roster bonus of $5M that accrues on first day of league year, $29M cap hit, $17M dead cap

Year 4, 2020-21 season: $23M base salary (non-guaranteed), $27M cap hit, $8M dead cap

Year 5, 2021-22 season: $25M base salary (non-guaranteed), $29M cap hit, $4M dead cap

Now, of course, this option is no longer applicable due to Cousins playing out the tag for this past season at $20M.  What the use of the franchise tag in 2017 did is essentially add a few million to this same model.  Therefore, I believe you should be thinking in this neighborhood for a 5 year contract that will get Kirk’s attention:

5 years, $159M, $20M signing bonus, $70M guaranteed at signing, $96M total guarantees

Year 1, 2018-19 season: $24M base salary (fully guaranteed), $28M cap hit, $44M dead cap

Year 2, 2019-20 season: $26M base salary (fully guaranteed), $30M cap hit, $42M dead cap

Year 3, 2020-21 season: $26M base salary (non-guaranteed at signing), roster bonus of $5M that accrues on first day of league year; base salary becomes fully guaranteed on first day of league year; $35M cap hit, $17M dead cap

Year 4, 2021-22 season: $28M base salary (non-guaranteed), $32M cap hit, $8M dead cap

Year 5, 2022-23 season: $30M base salary (non-guaranteed), $34M cap hit, $4M dead cap

If you think this sounds like an unconscionably large contract for Cousins, I agree with you.  It is.  But the Redskins did this to themselves – this is the effect of Washington’s inability to make a decision on this player and instead continually kicking the can down the road another year via the franchise tag.   It’s obscenely large and I doubt that I’d pay this myself if I were in charge of the Redskins, but I believe that this is the ballpark in which the team is playing now and the numbers to which Washington must at least get close to in order to have a shot at signing this player; after all, Cousins once again passed for over 4,000 yards and posted a quarterback rating of near 100 this season despite injuries causing the Redskins to become one of the most non-threatening offenses in the NFL.  The sad thing is that there are other teams that can and most likely will pay this amount or more.  Cousins essentially has no motivation to compromise unless he truly is the rare, one-in-one thousand person who is willing to sacrifice significant money in order to help his team out with the salary cap.  That having been said, if I were in charge of the Redskins, these numbers would be the absolute maximum – not one penny more.

In terms of salary cap percentage usage, working off my estimate from last year about cap increases, the salary cap, including the addition of a $5M annual rollover, should look something like this for the next 5 years:

2018-19: $182M

2019-20: $192M

2020-21: $202M

2021-22: $212M

2022-23: $222M

Quite a bit will happen by the end of this period, namely a new collective bargaining agreement and new broadcast contracts, but trying to predict the effect of those two issues on the salary cap is a fool’s errand and well beyond the scope of this column.  Using those estimates, these would be Cousins’ annual approximate cap usage using the contract I proposed:

2018-19: 15.4%

2019-20: 15.6%

2020-21: 17.3%

2021-22: 15.1%

2022-23: 15.3%

As you can see, this hypothetical, approximate cap usage percentages are high, but not so high as to be prima facia unreasonable with the exception of the 2020-21 season, depending on how close my salary cap estimates actually get.  If my cap estimates are even a few million too high, that could change things pretty dramatically.

Conclusion

I honestly don’t know what to think about this situation at this point.  I’m tired of debating what’s in Kirk’s head, whether he wants to become a free agent, what the Redskins’ front office is thinking, or whether or not they’ve done everything they could.  What matters is the here and now.  In terms of options, I strongly believe that the only way to go is to not tag Kirk and hope for the best, for the sake of salary cap preservation.  The least attractive option, by far, is the use of the exclusive franchise tag, which would (a) result in a wildly large cap hit this year, and (b) most likely delay resolution of this problem by another year.  The transition tag is slightly better, although it will almost certainly result in offers from other teams that are way out of the Redskins’ reach.  What will actually happen?  I have absolutely no idea.  Please, Redskins, all I ask is that you don’t do something that will make me write Part 5.

What do you think? Let us know in the comment section below.

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