Three Takeaways from NFL Agents on the Khalil Mack Trade
Right as rosters began to take shape, the Oakland Raiders traded pass-rusher Khalil Mack, who was holding out for a new contract, to the Chicago Bears, who immediately signed him to a six-year, $141 million contract, creating mass hysteria. Not only did the Raiders move the most talented player on their team for draft picks, some of which will not play for the team for two years, but Chicago gave Mack a contract worth almost $30 million more than what Denver Broncos pass-rusher Von Miller had set the market at as a sack artist just two years ago.
People react to live sports. That is the whole point. Unfortunately, live reaction bleeds into how we consume sports transactions now and facts can get lost in the shuffle. This is why I sought out nearly a dozen NFL agents this week to discuss how they viewed both the Mack trade and contract and how they believe that it will influence the NFL moving forward. Outside of the upcoming collective bargaining agreement and potential lockout talk, there were three major topics that agents brought up repeatedly.
Topic #1: Agents think the Oakland Raiders "did Khalil Mack right."
While the media narratives have mostly revolved around the negatives of the Mack deal, like draft picks Chicago lost just to pay Mack a record deal, the fact that Oakland gave back a second-round pick and that the Raiders were unable to re-sign their best pick in over a decade, but most agents were actually fans of this move considering the circumstances. From their perspective, the team showed that if they were not going to pay players at market price, they would at least move players to teams that would. The reality of football is that most contracts are primarily motivated by money, with winning, fan bases and organizations playing secondary roles.
Related: On Khalil Mack, Realistic Trade Suitors and Prop Odds
By moving Mack to the Bears, the Raiders gave him the opportunity to get what he wanted: a market-setting second contract. While agents acknowledged that if everything was equal, most players would like to stay with their original franchises instead of moving halfway across the country, the end goal for Mack’s camp was always to match or beat the contract that Aaron Donald “set the table with” and Oakland did not make it harder than they needed to for the pass-rusher to get his money.
When asked about a situation in the league where teams have made it hard for players to see the money that they could receive elsewhere, the example that consistently came up was Seattle’s handling of free safety Earl Thomas. Agents are closely monitoring that holdout.
Some agents claimed that Oakland’s locker room could lose confidence in the fact that Mack’s value it set to be replaced by draft picks they may never play with, showing that head coach Jon Gruden is focusing on life beyond his current roster, but they also noted the business nature of the sport under a salary cap structure.
Topic #2: Mark Davis could have paid out Khalil Mack’s signing bonus.
There has been some speculation as to if the trade of Mack was a hand forced by some sort of cash flow issue in Oakland. This seemed to have stemmed from two major factors:
- Raiders owner Mark Davis comes from inherited football franchise money, which is very different from the financial backgrounds of other NFL owners.
- The Raiders are moving to Las Vegas, where they are currently constructing a stadium, which...costs a lot of money.
Nevertheless, every agent I talked to thought financial issues, at least to the tune of Mack’s first-year money ($41 million) was laughable. One topic that was explained to me several times was the fact that no NFL owner just has $40-plus million sitting in a bank account waiting for a rainy day. If you want to claim that a team has “cash flow issues” because they do not have that money sitting in a single account earmarked for no occasion, then many teams have “cash flow issues.” The reality is that any deal involving that much money likely takes some assets being liquidated or moved around, in general. Even if Davis did not want to temporarily take some money out of some of his non-Raiders ventures, getting a $41 million, one-year loan would have been a non-issue for an NFL owner.
Topic #3: This is a reflection of the new reality of the NFL and “max deals."
Take a deep breath. This is the long, nuanced one.
In 2017, Detroit Lions quarterback Matthew Stafford signed an extension worth $60.5 million guaranteed. That was a market-setting number at the time, but we really knew nothing about what the open market value of a starting quarterback would be, as one had not hit free agency in years. In 2018, everyone was stunned when free agent Kirk Cousins was able to land a fully-guaranteed three-year contract worth $84 million with the Minnesota Vikings. That was a paradigm shift for every star in football. The Cousins deal is now what everyone is judging their guaranteed money against.
Related: Using 2018 Fantasy Projections to Create On-Field Quarterback Tiers
Stars can now point at Cousins’ guaranteed money and say, “Hey, I’m at least worth 70 percent of Cousins.” The problem is, there are many players who are as good as three-quarters of Cousins and the NFL’s salary cap is constructed in a way that dissuades NFL teams from signing multiple players to big guarantees. For example, Mack’s new contract includes $41 million in first-year money, mostly because of his $34 million signing bonus (the other $7 million literally comes weekly in game checks.) Because of the size of these signing bonuses, the NFL’s cap system spreads the cap accounting of these signing bonuses over the life of these contracts, up to five years. So instead of that $34 million signing bonus immediately being reflected on the Bears’ 2018 cap, $6.8 million of it will be accounted for in each of the next five seasons (through 2022.)
The problem is, if you attempt to release a player, all of his guaranteed money and unaccounted signing bonus money (cap-wise) is immediately escalated to one season. So for example, let’s say that Mack had some unfortunate injury in 2018 which hindered Mack’s on-field ability moving forward, at least to the point where he would not warrant the $4.2 million roster bonus and $11.3 million in base salary he’s slated for in 2019. Because of how the NFL owners have constructed their cap system, the cost to release Mack, even if some of the money is already paid out, would eat $46.2 million of the Bears’ 2019 cap with a cut. Those numbers are $24.1 million in 2020 and $13.6 million in 2021. Essentially, Mack is locked into a roster spot (and $91 million) until 2022.
Rising numbers in guaranteed money, which in every case since Cousins has meant spread-out signing bonuses rather than fully-guaranteed short contracts, has meant that teams are taking larger and longer risks that their star players can stay healthy or at least live up to expectations. A few agents compared the recent guaranteed money boom in the NFL to the NBA’s cap spike a few years ago, where salaries rose very quickly. As it was put to me, NFL teams can stay competitive and play cap games to get out of one cap obstacle if a major contract turns out to be a dud, but two dramatic cap obstacles under the league’s dead cap model would leave a team in purgatory at best. Signing two players to major deals now is like tying up the next five years of your franchise up, where deals pre-Cousins were more like three-year contracts with team options.
At this point, it should be noted that defensive linemen and pass-rushers are the only non-quarterback who are going to come close to these “max contracts”, as one agent tabbed them. When the Raiders signed quarterback Derek Carr to a five-year, $125 million extension, it was out of the realm of possibility that pass-rusher Khalil Mack was going to sign for six years and $141 million. Cousins establishing what his value actually was completely changed the process that the NFL operated from and Oakland, which hit on a quarterback and pass-rusher in the same class, was caught in an awful position. The new reality is that it is better to have contracts for a franchise quarterback and a franchise pass-rusher spread out by two or three years rather than “hit” on two players at “max deal” positions in the same draft class, that way a team is not actively risking so much dead cap at one time. Before Cousins established the new NFL standard for guaranteed money, timing was not as significant of a factor for re-signing talent. For the most part, talent was talent if you could afford it from a salary perspective. Now, guaranteed money means even more, from a team-building perspective, than salary.
Related: Team Building like the 49ers and Eagles: Two Side of the Same Coin
Truth be told, many believed that the Raiders could have inked Mack to a deal if Carr was further along in his contract, so that the team did not have as much dead cap locked into the two players. I was told over and over that it was the guarantees, not the cash flow, that likely forced this move. One agent said, “If two helmets hit knees the wrong way, Oakland is on the hook for 2-14 for four years [had] they signed Mack.”
Because of the forces created by the NFL’s cap system, the teams who will be willing to set the market on star defensive linemen, at least until the next collective bargaining agreement, will likely be franchises that plan to start quarterbacks on rookie contracts long-term. The teams that were in the running for Mack, the Buffalo Bills, Chicago Bears, Cleveland Browns and New York Jets, directly reflect this line of thinking. None of those teams are paying “max deals” for their quarterbacks, essentially opening up a spot for a Mack to fill that void.
Oakland fell victim to a changing tide that now punishes teams for hitting on both a franchise pass-rusher and a franchise quarterback when their contracts are scheduled to come up within about a year of each other. They were also in a very unique situation, in that “hitting” on young players like that is a rarity in the NFL. With that in mind, we need to accept that this could happen again and that teams which recently paid quarterbacks are unlikely suitors for these type of defenders moving forward.
This issue may not come up again until the Cleveland Browns extend both quarterback Baker Mayfield and pass-rusher Myles Garrett, one parallel that was pointed out a few times. If the Dallas Cowboys’ Dak Prescott bounces back and Demarcus Lawrence takes the next step, that is another possibility for a repeat of this situation. In the end, Oakland was in a really unique situation where they signed a quarterback right before the market changed in a way that punished you for signing both a quarterback and pass-rusher in a short timespan, and then they immediately had a pass-rushing contract come up. Lost in most of the narratives is that simple story.