The concept of “new money” in NFL contracts is, without question, a fiction. But it remains a reality when it comes to assessing what a contract is worth.
Usually, “new money” comes up after the deal is done, with agents leaking the “new money” analysis of the contract to reporters who will pass the information along without scrutiny, because the “new money” analysis typically makes the deal look a lot better. In the case of Giants receiver Odell Beckham, Jr., the standard “new money” game apparently has been turned on its head.
As mentioned by Josh Alper on Monday and as also dissected by Ryan Glasspiegel of TheBigLead.com, it seems obvious that, for a change, the agent isn’t looking at the “new money” analysis. Likewise, the team (which usually never tries to couch the value of the deal in any specific way) seems to be pushing the “new money” concept to the media conglomerate the team partially owns.
The tweets from Josina Anderson of ESPN.com (most specifically this one) make it clear that Beckham’s camp is focusing the value of the deal at signing, which truth be told is the most accurate way to value a contract. When a player gets an extension, it’s not a new contract that gets stapled to the back of the existing one. The old contract gets torn up, any remaining money on that deal gets absorbed into the new one, and a brand new contract is signed.
So if, as the media outlet partially owned by the Giants claims, the team already has offered to make Beckham the highest paid receiver — let’s go with $17.1 million per year, which would put him $100,000 annually ahead of Antonio Brown — and let’s assume that the average applies to every year of the five-year extension that so many teams typically want, the value of the extension would be $85.5 million over those five new years.
Throw in the $8.49 million Beckham is due to make this year, and it becomes a six-year package with a total value of $93.959 million. The average per year on the six-year contract? $15.659 million.
This math meshes with the original claim from Anderson that the Giants have offered Beckham less than the $16 million per year that Sammy Watkins received from the Chiefs.
The broader question is whether the magnitude of the Beckham contract should even land in the ballpark where reasonable minds can differ on the true value of the deal. Is, as Anderson argues, Beckham so “transcendent” a talent that his deal shouldn’t just be slightly worth more than Antonio Brown’s $17 million per year but should blow that contract away?
Antonio Brown would strenuously object, and many others would, too. Really, is Beckham so much better than the current high-end NFL receivers that he should shoot past the current high-water mark under any analysis of the deal?
Regardless of whether you agree with the assessment that Beckham is indeed that much better than his peers, there’s one major impediment to his ability to push the bar as high as he’d like to push it: Beckham isn’t on the open market, and he possibly won’t be for three years.
That’s how a player ends up with a transcendent deal. Talent is only part of it; the player has to get to the open market, forcing a competition among multiple teams for his services, to maximize his compensation.
Alternatively, the player needs to use the leverage at his disposal to get the team to pay him as if he’s on the open market. For Beckham, it means that he should have held out. The fact that he didn’t will make it much harder for him to get paid like he’s on the open market despite being 48 regular-season games away from it.