On April 16th, 2020 it was announced that Christian McCaffrey had signed a four year, $64 million contract extension with the Carolina Panthers, making McCaffrey the highest-paid running back in NFL history. The announcement was met with a mixture of applause and derision from the NFL world.
We saw an immediate and unsurprisingly delighted reaction from Alvin Kamara, who just happened to be on a live twitch stream when the news broke. However, since the announcement, we have seen multiple analytics-based analysts point out the flaws in paying a running back.
The running back position is always a controversial one when it comes to their value. Seemingly every season at least one new running backs is given a big-money contract and every time the opinions on whether it was the right decision are split. The old-school football approach is that good running backs should still be valued highly, while the new analytics-based thinking is that running backs are easily replaceable.
However, it is easy to see when you watch him play why the Panthers value McCaffrey so highly. Let’s take a look at the terms of the contract, at how McCaffrey earned his payday, and how it compares to the other top running back contracts handed out in the past few years.[sv slug=mocksim]
The contract itself
As stated above, the headline news of the contract is that McCaffrey is the highest-paid running back in the NFL in terms of average value at $16 million per year. However, given McCaffrey still had two more years left on his rookie deal, including his option year, the final terms of the deal are a 6-year, $78 million deal. That puts the deal at a value of around $12.5 million per year across the six years of the deal.
The structure of the extension is extremely interesting. Mike Florio of Pro Football Talk reported the deal contains a little over $30 million of fully guaranteed money, including a sizeable $21.5 million signing bonus. Those guarantees come in the first two years of the deal, with $7.737 million (96.2%) of his 2021 base salary guaranteed as well as the full amount of his $825k salary in 2020. However, if McCaffrey is on the Panthers roster on the fifth day of the 2021 season $8.1 million (96.4%) of his 2022 salary will also become fully guaranteed.
The clause in 2020 essentially ensures the extension will keep McCaffrey on the team for the first three of the six seasons the deal covers. Due to the pro-rata structure of his signing bonus combined with the guaranteed salary in 2021, it would cost the Panthers close to $25 million in dead cap space if they were to cut him after the 2020 season. It would also cost the team over $20 million in dead cap space to cut him after the 2021 season.
Panthers have an out after the 2022 season
As you can see from the contract above, the Panthers’ first realistic way out of the contract comes after the 2022 season. With no guaranteed money left on the deal, only the remaining two pro-rated signing bonus years remain to count against the cap. Cutting McCaffrey prior to the 2023 season would still cost $8.6 million in dead cap space, but it would save the Panthers $7.7 million.
The most viable end to the deal for the Panthers comes after that 2023 season when cutting McCaffrey would only count $4.3 million against the cap, while saving $12 million. The structure of this deal is extremely clever from the McCaffrey side, as the relatively massive $21.5 million signing bonus makes it tough financially to move on from McCaffrey in 2022.
From the Panthers’ point of view, they will look at it as paying money upfront while they are rebuilding the roster to ensure they have McCaffrey locked up through his prime. However, they will also point to the fact that this deal is smart for them as they could feasibly cut McCaffrey after the 2022 season, meaning they have only actually extended him by one year. Despite that, this deal looks to be a big win for McCaffrey and a deal that the Panthers may regret if McCaffrey’s performance drops off over the next two years.
McCaffrey the game changer
It is hard not to look at McCaffrey’s 2019 season and not be blown away by the numbers. He was just the third player in NFL history with both 1,000 rushing and receiving yards while also scoring 19 touchdowns. He led the league in yards from scrimmage and combined rushing and receiving touchdowns while ranking second in yards per touch among players with more than 200 touches. He also led all running backs in Pro Football References Approximate Value and was second amongst running backs, wide receivers and tight ends.
If we judge McCaffrey purely on his rushing, then this deal does not look good for the Panthers. According to Pro Football Network’s Offensive Share Metric, McCaffrey ranked 14th at the position purely as a runner. The metric shines a light on the true performance of an individual and is based on factors solely within their control, allowing us to see when a player has done all he can to make his team great. However, OSM does not take into account a running back’s receiving prowess and that is where McCaffrey brings so much to the table.
McCaffrey trailed only Michael Thomas in receptions in 2019, was sixth in catch percentage among players with more than 50 targets, and sixth in yards after the catch per reception. McCaffrey offers so much more to the Panthers than just a simple running back. Whether he can do enough to ever make this contract be deemed good value to the Panthers is questionable. However, there are a number of recent examples of how easily teams can be left regretting signing a player to a big contract such as this one.
Should the Panthers have learned from previous running back contract disasters?
To put McCaffrey’s deal in context we can simply look at the other three of the top-four deals on a per-year basis. One of those deals was signed in free agency, Le’Veon Bell, with two of them being contract extensions, Ezekiel Elliott and David Johnson. Additionally, we have seen two other lucrative running back contract extensions ended early by the teams in this very offseason, Davonta Freeman and Todd Gurley.
This discussion about running back contracts has never been more prevalent than in the last 12 months. Back in free agency of 2019, Bell signed a four year, $52.5 million dollar contract with the New York Jets. Less than 12 months later the Jets are already looking at whether moving on from the deal is feasible, with Bell’s name having been regularly seen among trade rumors.
To some extent, that deal was structured smarter by the Jets than this one has been by the Panthers. Bell’s deal has no guaranteed money left after the second year, and the Jets put $14.5 million of the deal in roster bonuses spread throughout the four years, while only committing $8 million in signing bonus. That means the Jets can cut Bell after the upcoming season for just $4 million in dead cap space, saving $24.5 million of the initial $52.5 million in the deal. However, in a poor market for free agent running backs, the Jets had more leverage than the Panthers had, with McCaffrey coming off a historic season.
Now our attention turns to other extensions that we have seen in the last five years. The most recent example of these was Elliott. Elliott held out through offseason workouts to a point where there was serious talk that he might miss regular-season games. In the end, he did not miss a single game as his perseverance was rewarded with a six-year, $90 million contract extension. At the time, his extension made him the highest-paid running back in the league with an average annual value of $15 million.
Similarly to McCaffrey, he signed his deal with two years remaining on his rookie deal. The deal locks him up with the Cowboys until 2026, with his first three years fully guaranteed. He also has a similar deal to McCaffrey, in which his 2022 salary becomes guaranteed at the beginning of the previous season. Given the similarities between the two deals, Elliott and McCaffrey and going to be regularly compared over the next two or three years.
While it is difficult to make a determination on the value of Elliott’s contract, the decline of Johnson’s play over the last two years is a scary example of what the Panthers could be facing in a couple of years. The last three years of Johnson’s career have seen a rapid decline from 2016 when he set the league on fire with over 2,000 yards from scrimmage and 20 touchdowns.
Despite playing just one game in 2017, the Cardinals gave Johnson a three-year, $39 million extension with more than $24 million guaranteed prior to the 2018 season. Since then, Johnson has appeared in 29 games and has just 2,000 yards from scrimmage and 16 touchdowns in those two years combined. Johnson was traded from the Cardinals to the Houston Texans on March 20th in a trade that was generally seen as a head-scratcher by many around the league. Even if Johnson has two good years with the Texans, it will be very hard for him to perform well enough that this extension will have been considered a success.
Devonta Freeman and Todd Gurley
These two are grouped together because both players ended up being cut with multiple years and a lot of capital left on their deals in this past offseason. Freeman signed his five-year, $41.25 million extension in 2017, with $18.3 in guarantees. However, he ended up earning just $22.047 million of that contract before being cut after three seasons. The Falcons smartly kept the signing bonus small and are left with just a $6 million dead cap charge in 2020.
The story of Gurley is somewhat similar to Freeman. In 2018, he signed a four-year, $57.5 million extension with $21.95 million guaranteed. However, when he was cut this offseason he had earned less than half of the original deal, $26.95 million. Due to the large signing bonus and guarantees in Gurley’s contract, the Rams were left with a difficult choice of how to treat Gurley’s release.
Ultimately, they released him with a post-June 1 designation spreading the cap hit over two years. While that prevents a potential $23 million cap hit this season, it does leave the Rams carrying a dead cap of over $15 million this year, and still another $8.4 million next season.
To some extent, it is unfair to judge these deals without the context of the injuries that both backs have dealt with since signing them. However, injuries are a big part and parcel of the career of a running back, and the risk any team takes when committing big money to the position. If we see McCaffrey suffer injuries over the next two years or if he simply fails to live up to the terms of his deal over the course next two years, the Panthers could be facing a very similar fate to the Rams in terms of being facing a large amount of dead cap space down the line. However, at the very least, McCaffrey so far has a clean bill of health in his NFL career, having appeared in all 48 games for the Panthers since being drafted.