Why the Drew Brees Contract is Already Done

Drew’s being too greedy and making it impossible to keep the team together! How can the Saints possibly say that Drew Brees isn’t worth $23 million per year, pay him whatever he wants! Drew Brees is said to be LIVID over receiving the franchise tag!

Naturally, all Saints fans are deeply concerned over the Brees contract negotiations. The last, widely accepted report on the state of the talks had the two sides roughly $5 million per season apart with Brees wanting $23mm per year and the team offering $18mm per year. It seems everyone has their own opinion on whether these numbers are “fair” or “greedy” or “insulting”.

It also seems that very few people have taken into account the situational factors driving the negotiations.

I came across this Jason Cole article on Yahoo! yesterday in which he claims that the Calvin Johnson contract (8 years, $132mm) will only serve to drive up the money required to sign Brees to a long term deal. Essentially, he argues that since quarterbacks get paid more money and are more valuable than wide receivers, Brees’ contract will justifiably be more expensive since the Saints didn’t do the “smart” thing and get this deal worked out weeks ago.

But nowhere in that article is an acknowledgement of the drivers of the cost of Johnson’s contract: the franchise tag. When dealing with players under the franchise tag, most “market” considerations go out the window. The only influence the market has on these negotiations is through setting the one-year contract tender amount.

Under the franchise tag rules in the Collective Bargaining Agreement signed last summer, a player’s one-year salary is equal to the average of the top 5 salary cap costs at his position as a percentage of the salary cap over the last 5 years (non-exclusive franchise tag) or the average of the top 5 salary cap costs at his position for this season as of the end of the Restricted Free Agent period (exclusive franchise tag). In both cases, if 120% of the player’s previous salary is greater than the pertinent salary cap average, his tender becomes 120% of his previous salary.

The same “average or 120%” rule applies should a player receive the franchise tag again the following season. However, the multiplier rises to 144% of the previous year’s salary should the player be franchised for a third straight season.

Once you take this into account, the Mario Williams and Calvin Johnson contracts from yesterday make complete sense. Johnson’s 2012 salary cap number prior to the extension was $22mm. Were Johnson to play out his rookie contract and be franchised: 120% of $22mm, or $26.4mm, would have been his 2013 franchise tender amount. Williams had very similar numbers except that he would have been franchised this season for 120% of the final year of the rookie contract for the top overall pick.

The Lions never would have been able to keep Johnson for that figure and would have been forced to let him test his worth in unrestricted free agency, just as the Texans were forced to do with Williams.

Simply put, the players had all the leverage because their teams did not have the option of using the franchise tag due to their large salaries. Detroit opted to pay a huge amount of money to Johnson while Houston opted to let Williams walk. To each his own.

That brings us back to Brees and the significant differences between Johnson and Williams, the differences that I’ve yet to see anyone discuss. In fact, as I sit here writing, Adam Schefter tweeted about how Brees has more leverage due to these huge guaranteed money contracts.

Obviously,I wouldn’t have gone into such a detailed description of the mechanics of the franchise tag if that weren’t the HUGE difference between these players.

While Johnson and Williams had unpalatable franchise tag tender amounts (due to their giant rookie contracts), Drew Brees has a very reasonable set of franchise tender amounts. We don’t know the final number for 2012 yet since we have to wait until the end of the Restricted Free Agency period, but it stood at $14.46mm as of the start of the league year. Assuming Peyton Manning’s cap number for his new team in 2012 will be more than $14.46mm, then the franchise tender amount for QBs will rise, but it’s probably safe to assume that it will not be more than $16mm.

Using the $16mm figure for 2012, you can see that, as unthinkable as it may seem, the Saints have the option to simply place the exclusive franchise tag on Brees for 2012 ($16mm), 2013 ($19.2mm) and 2014 ($27.648mm). The important point is that the Saints can unilaterally decide to take this course of action and the only options for Brees would be to play for the franchise tender or sit out the season.

Furthermore, these salary amounts would only be guaranteed once the Saints place the franchise tag on Brees each spring and he signs the tender. Plus, to realize the $62.8mm over 3 years, Brees would have to avoid a career threatening injury. I’m sure this isn’t lost on anyone involved with the contract talks.

Put another way, the Saints have the ability to pay $63mm to Brees over the next three seasons while not being on the hook for the remainder of the money should Brees get hurt at any point along the way.

It seems to me that the CBA, and not other contracts around the league, have set the parameters for Brees’ contract. The lower limit of guaranteed money is clearly $16mm since Brees would never accept less than he is already guaranteed by simply signing the 2012 franchise tender. The upper limit of guaranteed money is $63mm since the Saints have the option of paying that amount with no risk of being liable for a big chunk of it should Brees get hurt. By this logic, Drew should be willing to accept less than $63mm in guaranteed money as insurance against career ending injury.

Also, from this point of view, the Saints’ reported offer of $18.5 per year in the first 3 years of the contract ($55.5mm) seems pretty reasonable.

It must be incredibly disappointing for Drew to not be the highest paid player in the league, but this is all being governed by the CBA that came out of an anti-trust suit he was a part of and negotiations with the league that he was also a part of. It’s hard to fault Drew for wanting as much money as he can get, but it’s also hard to fault the Saints for understanding the salary rules the players union agreed to.

At this point, all they should be doing is deciding how much the “injury insurance” is worth to Drew and waiting on Peyton Manning to sign so they know the 3 year value of an exclusive rights franchise quarterback.

Nobody at that negotiating table, Mickey Loomis, Tom Condon or Brees, is dumb. They understand all of this. That’s why Saints fans should be rooting for Peyton Manning to sign his contract as soon as possible.

I, for one, hope he gets as much money as possible because that will just be more of a richly earned reward for Drew Brees.

This FanPost was written by a reader and member of Canal Street Chronicles. It does not necessarily reflect the views of CSC and its staff or editors.

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