The deadline for signing franchise tag players to long-term contracts can be something of a non-event, but this year there was some last-minute excitement. Leading up to the 15th of July, we saw the Kansas City Chiefs sign Chris Jones to a cleverly structured four-year contract. On the day of the 2020 deadline, it was Derrick Henry’s turn to take the spotlight as he agreed to a four-year deal with the Tennessee Titans.
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Henry is the second star running back to receive a big-money contract this offseason, following Christian McCaffrey’s four-year contract extension back in the weeks before the draft. Paying running backs does not have a good reputation around the NFL, something the Titans have experienced first hand when they handed Chris Johnson a big deal back in 2011. Let’s take a look at Henry’s new contract, how it compares to some of the other recent deals, and also how it compares to that infamous deal for Johnson.
Derrick Henry’s contract extension
A more complicated deal than first advertised
On the surface of it, this deal is advertised as a four-year, $50 million contract. But there is a lot more to it than that. Financially, the deal breaks down as a $12 million signing bonus and $38 million in base salary. Of that $38 million in salary, $13.5 million is guaranteed, taking the total of guarantees of $25.5 million.
That $13.5 million in guaranteed salary sees the entirety of Henry’s base salary in 2020 and 2021 fully guaranteed. However, that is the extent of the guarantees, with no further money guaranteed in 2022 and 2023. Therefore, this deal is not really a four-year, $50 million deal, and instead takes the form of a two-year, $25.5 million contract with what amounts to two team options tagged onto the end.
What does it cost the Titans to get out of the deal?
There is no real out for the Titans in the second year of the deal, unless they are willing to pay a premium for it. If the Titans decide not to take Henry into the 2021 season, then it will cost them $19.5 million in dead cap space, costing them an extra $6 million against the cap than it would if he was on the team.
2022 is where things start to get interesting. With none of his $12 million in base salary for the year guaranteed, the only cost to the Titans will be $6 million in dead cap. With two years remaining on the deal entering 2022, cutting Henry will see the $3 million in pro-rated signing bonus due in 2022 counting against the cap, as well as accelerating the final $3 million that is due to hit in 2023.
If the Titans do decide to take this contract into the third year, then they have another chance to get out of the final $12.5 million in base salary. Once again, there appears to be no guarantee mechanism for that money in 2023, meaning the only cost is the remaining $3 million in pro-rated signing bonus counting against the cap.
Therefore, we can compare this deal to the equivalent of Henry playing under two franchise tags for the Titans. The value of the franchise tag for Henry in 2020 would have been a cap hit of around $10 million. Had the Titans chosen to franchise Henry again entering 2021, then the value of the deal would have been in the $12-15 million range.
That would essentially have seen Henry paid $22-25 million for the two seasons, with the Titans having to decide what to do entering the 2022 season. With this new contract extension, if Henry continues to perform as he did last season, then the Titans may actually find a $15 million cap hit to be a reasonable value. Chances are they will let Henry walk, but this deal gives them the power to decide and prevent Henry from being able to dictate terms entering 2022.
How does it compare to other current contracts?
This deal makes Henry the fifth running back currently earning a double-figure annual average value at $12.5 million. The total value of the deal is currently the fourth-highest in the league, behind only Ezekiel Elliott, Le’Veon Bell, and the new deal for McCaffrey. When it comes to guaranteed money, the $25.5 million figure is slightly less than the total value of the rookie deal signed by Leonard Fournette back in 2017.
The structure of this deal very closely mirrors that of the deal signed by Bell. Bell’s four-year deal was worth $52.5 million on paper, with $27 million guaranteed at signing and $8 million as a signing bonus. That deal also had an out after two seasons, leaving a potential $4 million in dead cap if the Jets decide to move on after the 2020 season.
The Henry deal differs slightly to those signed by Elliott and McCaffrey, as those were contract extensions rather than brand new deals. The McCaffrey deal has a potential out after three seasons, while the Elliott deal has a potential out after the fourth season. Both of those deals will pay significantly more to both backs before those outs. However, both of those deals were signed with backs entering their age 24 seasons as opposed to Henry, who is 26.
How does this deal compare to the Johnson deal?
The last time the Titans gave a significant deal of this size to a running back was back in 2011. Chris Johnson was coming off three seasons in which he had rushed for over 4,500 yards combined, adding 34 rushing touchdowns, four receiving touchdowns, and 1,008 receiving yards. As a contrast, Henry has 3,833 rushing yards, 38 rushing touchdowns, 578 receiving yards and three receiving touchdowns.
The Johnson deal was also an extension, meaning that while it was advertised as a four-year deal, it was actually a six-year contract for $53.975 million. However, Johnson was also 26 at the time of signing the deal, meaning that he would be 32 when the deal finished, as opposed to Henry, who will be 30.
Johnson was guaranteed just $13 million of the deal, allowing the Titans to get out of the deal at any time after that first season. At the time of signing, Johnson’s deal had an average annual value of $9.3 million per year. Ultimately, Johnson would earn $31 million of that $53.975 million before being cut in 2014.
These two deals may seem very similar, but there are some differences that go in favor of the 2020 version of the deal. On the one hand, while the AAV of the Johnson deal was lower in absolute money, it was cheaper in terms of the percentage of the salary cap ($120 million in 2011). Johnson’s deal worked out as being around 7.6% of the salary cap on average over the course of the deal, while Henry’s deal will take up around 6.5% of the salary cap on average.
The other difference is in the workload of each of the backs at the time of signing the deal. Despite having been in the NFL for one more season at the point of putting pen to paper, Henry has over 100 fewer carries in the NFL, averaging just 201 carries per year. In contrast, Johnson averaged 308.3 carries per season through those first three years.
While paying running backs is never the smart move in the grand scheme of the NFL, this deal is as close as it gets. Henry was such a huge part of what the Titans did in 2019, finishing as the RB1 in Pro Football Network’s Offensive Share Metric. The likely plan for the Titans would have been to put Henry on the franchise tag for the next season or two, pushing the decision about Henry further into his career and increasing the risk.
This deal gives the Titans all of the control in two years’ time and allows them to continue with the same offense they ran last year. With their quarterback and running back now both having been paid, after Ryan Tannehill signed an impressive deal prior to hitting free agency, the Titans enter 2020 with their two key pieces on offense content and ready to hit the ground running.
Ben Rolfe is an editor and writer at Pro Football Network. You can find him on twitter @benrolfe15.