The Bursting Wide Receiver Market Bubble

[Playoffs]

The Bursting Wide Receiver Market Bubble

Brian Blewis just had a good article (http://overthecap.com/four-pro-bowl-wide-receivers-entering-final-year-of-rookie-deal/) discussing the four Pro Bowl wide receivers who are entering the final year of their rookie contracts: A.J. Green, Julio Jones, Alshon Jeffery and T.Y. Hilton. This offseason, four other Pro Bowl receivers received new deals, Dez Bryant and Demaryius Thomas were franchised, Randall Cobb resigned with Green Bay on a four-year, $40 million deal, and Jeremy Maclin signed a five-year, $55 million contract with the Chiefs.

What I think we’ll see in the coming years is that the wide receiver contracts of the 2012 and 2013 offseason were where and when the market reached it’s peak before falling down to it’s true value.

This is best illustrated in the contracts of Calvin Johnson, Mike Wallace, Vincent Jackson, and Larry Fitzgerald....
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Part of the reason why I think we’ve seen uncertainty with the Cowboys and Broncos in resigning two of the best receivers in the NFL, other than Bryant’s off the field issues, is that the receiver market has become very cloudy.

When I was in Indianapolis, I got the chance to see former Bucs GM Mark Dominik speak and be in a small group that spoke with him during a lunchtime break-out session. Someone asked Mr. Dominik something along the lines of what the easiest position to find and replace talent at is and Mr. Dominik said that position was wide receiver, to which I agreed.

There are a few reasons for this, first being that wide receiver is the position most...
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I can’t determine for sure if the decrease in the value of the top receivers the last couple years has been because the other deals were so out-of-touch with the market or that it’s a genuine decrease in the top of the market, but I do think that the wide receiver market will decrease moving forward on a percentage of the cap basis...
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What I think we’ll see over the next few years is that this market is beginning to settle back in line with the line of logic that I’m using when discussing Jerry Rice, a team just can’t win paying even the best receivers in the NFL so much more than Rice’s 1994 cap number...
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What smart organizations do is sign their cornerstones to contracts before...
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One key point that I think should be made before we finish this up is that only eight of the 32 receivers that were the highest cap charge on their team were the leading receivers on their teams. These were ...
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As with any other position, it’s important to not waste money and I think what’s above is some good information to think about in this discussion.

As more and more great receivers enter the league, teams need more than one good receiver for their offense, and receivers play into their thirties, there will be a larger supply of potential players to choose from, when supply increases, but demand stays the same, the cost of the product decreases. So, because of this, even as the NFL becomes more of a passing league, the cost of receivers will decrease.

As former Bucs GM Mark Dominik said, wide receiver is just to easy a position to replace. As much as it hurts, as a former receiver, it’s the truth. Watch the wide receiver market fall back to reality in the coming years.

http://overthecap.com/the-bursting-wide-receiver-market-bubble

 

[eriadoc]

From that:

In 2014, Nelson had a career year with 98 catches for 1519 yards (15.5 ypc) and 13 touchdowns. If he hit the open market, who knows what kind of money he could have commanded, but as with Randall Cobb, the Packers were able to come to an agreement that kept both sides happy, paid them what they’re worth and gave their team more of a chance at long-term success due to having the best receiving duo in the NFL at a reasonable cap hit.

Together, in 2015, they will take up 6.94% of the salary cap. If the cap moves up to $153 million in 2016, they will take up 11.73%. As you’ll see with most of the bigger contracts, the year one cap hit is lower due to the signing bonus the player just received.

So, even in year two when their cap hits bump up, they’re going to take up less of the cap together than what Andre Johnson took up in 2014 with the Texans, 11.76%. In 2015, Calvin Johnson will take up 14.35% of the cap, which is 168% of what Jerry Rice made in 1994 with the Super Bowl champion 49ers, 8.56%.

 

[infantrycak]

When I was in Indianapolis, I got the chance to see former Bucs GM Mark Dominik speak and be in a small group that spoke with him during a lunchtime break-out session. Someone asked Mr. Dominik something along the lines of what the easiest position to find and replace talent at is and Mr. Dominik said that position was wide receiver, to which I agreed.

Is this guy's track record a good one for making that statement?

As GM:

drafted: Sammie Stoughter, Arrelious Benn and Mike Williams for a combined 4500 yds - none still on team.

FAs: Vincent Jackson 5 years/$55.5 mil.

And traded a 2nd and 5th for Kellen Winslow II and made him the highest paid TE in the league.

Looks like he pulled 1 good 29 year old vet at top of the market price.

So, even in year two when their cap hits bump up, they’re going to take up less of the cap together than what Andre Johnson took up in 2014 with the Texans, 11.76%.

Dude is apples and oranging hard.

In year 2 of his contract AJ took up 5.4% of the Texans' cap.

Their contracts grow as well from $14 next year up 180% to $25.25 in 2018 - their 4th. AJ's grew the same 180% to year 4.

 

[Texan_Bill]

Well the Houston Texans got one wide receiver right! AJ!!!! Other than that they missed on every other WR pick after that up until NUK.

No offense to NUK, but he's not exactly proven as a #1 receiver.

I think he'll be a #1....... BUT??????

We'll see. I think the question is more about a QB that we've never had.

 

[Corrosion]

We'll see. I think the question is more about a QB that we've never had.

So is Jordy Nelson & Randall Cobb being the best receiver tandem in the NFL .... they wouldn't be putting up those numbers with any other team. Rodgers is the best QB in the game right now (last year) with only two others anywhere close (Luck & Brady).

 

[eriadoc]

Dude is apples and oranging hard.

In year 2 of his contract AJ took up 5.4% of the Texans' cap.

Their contracts grow as well from $14 next year up 180% to $25.25 in 2018 - their 4th. AJ's grew the same 180% to year 4.

Well, I don't know what point he was trying to make or compare, but I wasn't reading it as Year X compared to Year X of a contract. To me, having 11% of your salary cap tied up in one position is foolish unless it's one of just a couple positions and/or the player is a transcendent talent that is in the prime of his career. JJ Watt is a good example. It's still a risk, because football players are always at extreme risk of injury, but with a guy like JJ, you know effort will not be an issue, character will not be an issue, healthy performance won't be an issue, age won't be an issue, and the role he fills is critical (getting to the QB). All that's left to worry about is health, and age somewhat mitigates that. So if you absolutely have to tie up 11% of your salary cap on one guy, irrespective of contract milestone, that's the kind of guy you want.

I don't know the contract specifics for back then, but it's possible that AJ took up similar cap space at some point in his prime, so that would be largely defensible, though I tend to think that receivers just aren't that important in the grand scheme of things. A stellar WR is something you want after you've built a team that could go all the way, but might be missing that little extra to push it over the top. JMO. At any rate, last year's AJ is not worth tying up 11% of the salary cap. No big revelation there.

 

[infantrycak]

At any rate, last year's AJ is not worth tying up 11% of the salary cap. No big revelation there.

And my point is you have to look at overall contract construction. It simply isn't correct to compare year 1 or 2 of a contract to years 4 or 5 of someone else's contract and say "see you can get similar performance much cheaper." Cobbs' and Nelson's contracts have the same kind of steep pay increases AJ's did. They would not have signed (nor would they have even been possible) contracts that had those low year 1 and 2 cap hits if the contracts didn't go on to have the high years 4 and 5.

When you cut to try to avoid those high back end years you end up still paying like we are paying 5% of our cap space for AJ not to play for us this year.