Shockwave Posted March 12, 2015 Share Posted March 12, 2015 Attempting to make sense of the Darrelle Revis departure from the Super Bowl Champs Patriots Written By: Miguel Benzan Posted March 11, 2015 at 10:39 am 17 318 0 Reddit3 Like most of Patriots nation I was surprised when I heard that Darrelle Revis signed with the New York Jets within the first few hours of free agency on March 10th. None of us are privy to the negotiations that occurred between Darrelle Revis and the Patriots. The purpose of this blog post is to provide some background and to hopefully provide an educated guess at what happened. Background information: Darrelle Revis will be 30 years old when the 2015 season starts. Revis has been selected to six Pro Bowl (2008, 2009, 2010, 2011, 2013, and 2014) and has earned four first-team All Pro honors (2009, 2010, 2011 and 2014). Revis was named AFC Defensive Player of the Year in 2009 after finishing the year with 72 total tackles and six interceptions. When Darrelle Revis signed with the Patriots on March 12, it was widely reported to be an one-year $12 million deal. On March 13 ESPNBoston.Com’s Mike Reiss reported that “An important wrinkle has been learned about the contract Darrelle Revis has agreed to with the Patriots. It has widely been reported as a one-year, $12 million deal, which is accurate. Revis will earn $12 million this season. But for salary-cap accounting purposes, and to protect Revis from being assigned the franchise tag in 2015, the sides have added a second year to the pact in 2015 that would pay Revis $20 million and count $25 million against the salary cap. The $20 million is an astronomical figure, as is the $25 million cap charge. That makes it unlikely the Patriots would pay it, thus making Revis an unrestricted free agent in 2015 or one of the highest-paid players in football. The second year helps the Patriots spread out the salary-cap charges for Revis over two seasons instead of taking one $12 million salary-cap hit in 2014. Revis’ cap charge for 2014 is now $7 million.” Joel Corry tweeted that “the installments of Revis’ $12 million roster bonus if option picked up are $3M on 3/31, $3M on 10/31, $3M on 12/31 & $3M on 3/31/16.” Once the first payment is made the Patriots can not convert the $12 million roster bonus into a signing bonus. In effect, Patriots had two Revis-related deadlines (4PM March 9th to pick up option, 4PM March 31st to convert roster bonus into signing bonus) No matter what (Revis signed extension with Patriots, option not picked up, Revis traded by Patriots to another, Revis played the 2015 season for Patiots with $25 million cap number), the $5 million proration of Revis’ 2014 $10 million signing bonus would have been on the Patriots 2015 cap. Teams cannot further prorate existing signing bonus proration. The 2015 signing bonus proration is a sunk cost of winning the Super Bowl. It was money well spent. Hopefully, that’s enough background. Let’s look at some financial comparables. Richard Sherman is almost 3 years younger than Revis. Sherman’s contract contains $40 million in guarantees. His 2014 salary is fully guaranteed. His 2015 salary will become fully guaranteed five days after the Super Bowl. All of his 2016 salary and 5 million of his 2017 salary will become fully guaranteed five days after the 2016 Super Bowl. Richard Sherman has been selected to the AP All-Pro team for 3 straight years and to the Pro Bowl two straight years. Richard Sherman – $11m signing bonus Year Base Salary Prorated Bonus Cap Number Dead Money Cap Savings Cash Received Total Cash Received 2014 $1.431m $2,245,606 $3,676,606 $3,245,606 in 2014;$8,800,000 in 2015 0 $12,431,000 $12,431,000 2015 $10m $2.2m $12.2m $8.8m $3.4m $10m $22.431m 2016 $12.569m $2.2m $14.469m $6.6m $8.169m $12.569m $35m 2017 $11.431m $2.2m $13.631m $4.4m $9.231m $11.431m $46.431m 2018 $11m $2.2m $13m $2.2m $10.8m $11m $57.431m Joe Haden is almost 4 years younger than Revis. Haden received over $45 million in guarantees, the most ever received by a cornerback. His 2014, 2015, and 2016 salaries are guaranteed. 4 million of his 2017 salary is guaranteed. Haden has a $100,000 incentive for making it to the Pro Bowl. Joe Haden – $16m signing bonus Year Salary Signing Bonus Pro Bowl Workout Cap No Dead Money Cap Savings Cash Total Cash 2014 $6,678,193 $5,149,702 $100,000 $200,000 $12,127,895 $45,078,193 ($32,950,298) $22,978,193 $22,978,193 2015 $8.3m $3.2m $100,000 $100,000 $11.7m $35.2m ($23.5m) $8.5m $31,478,193 2016 $10.1m $3.2m $100,000 $100,000 $13.5m $23.7m $(10.2m) $10.3m $41,778,193 2017 $11.1m $3.2m $100,000 $100,000 $14.5m $10.4m $4.1m $11.3m $53,078,193 2018 $11.1m $3.2m $100,000 $100,000 $14.5m $6.4m $8.1m $11.3m $64,378,193 2019 $10.4m $0 $100,000 $100,000 $10.6m $0 $10.6m $10.6m $74,978,193 Patrick Peterson is almost 5 years younger than Revis. Peterson, like Richard Sherman, was named to the first All-Pro team in 2013. Peterson’s 2014 salary is fully guaranteed. His 2015 and 2016 salary are guaranteed for injury now and will become fully guaranteed the 5th day of that year’s waiver period. Patrick Peterson – $15,361,866 signing bonus Year Base Salary Prorated Bonus Reporting Workout Cap Number Dead Money Cap Savings Cash Total Cash 2014 $889,114 $6,048,195 $0 $0 $6,937,309 $6,937,309 in 2014, $12,289,509 in 2015 $0 $16.25m $16.25m 2015 $11.619m $3,072,377 $0 $250,000 $14,941,377 $23,908,509 ($8,967,132) $11.869m $28.12m 2016 $9.75m $3,072,377 $0 $250,000 $13,072,377 $18,967,132 ($5,894,754) $10m $38.12m 2017 $9.75m $3,072,377 $0 $250,000 $13,072,377 $15,894,754 ($2,822,377) $10m $48.12m 2018 $11m $3,072,377 $0 $250,000 $14,322,377 $3,072,377 $11.25m $11.25m $59.37m 2019 $11m $0 $0 $250,000 $11.25m $0 $11.25m $11.25m $70.62m 2020 $12.05m $0 $250,000 $250,000 $12.55m $0 $12.55m $12.55m $83.17m Summing up the above 3 deals in terms of fully guaranteed money received upon signing deal Joe Haden-$22,078,193 Patrick Peterson-$16.25M Richard Sherman-$14.231M Summing up the above 3 deals in terms of cash received during the first 3 years Joe Haden-$41,478,193 Patrick Peterson-$37,969,114 Richard Sherman-$35M It seemed reasonable to venture that a Revis extension in the $13 to $15 million per year average range would have been fair for both sides and would recognize that Revis, while he may be better than Sherman, Haden, and Peterson, is also older than the aforementioned trio. In my blog post that looked at Revis’s comparables and proposed several deals for him my preferred deal averaged 14.1 million per year in new money over the four extended years. That 14.1M APY would have given Revis highest APY for a cornerback and more cash in Years 1, 2 and 3 than any other cornerback in NFL history. The 2015 salary would be fully guaranteed. His 2016 salary would have been guaranteed for injury now and became fully guaranteed the 5th day after the 2016 Super Bowl. $4.5 million of his 2017 salary would have become fully guaranteed if Revis is on the 53-man roster on the last day of the 2016 regular season. Darrelle Revis – 14.1M APY $22M signing bonus (My Preferred Deal) Year Salary Prorated Bonus Roster Cap No Dead Money Cap Savings Cash Total Cash 2014 $1.5m $5m $500,000 $7m $12m $12m 2015 $4m $10.5m $500,000 $15m $26m ($11m) $26.5m $38.5m 2016 $9.5m $5.5m $500,000 $15.5m $26m ($10.5m) $10m $48.5m 2017 $9.5m $5.5m $500,000 $15.5m $15.5m $0 $10m $58.5m 2018 $9.5m $5.5m $500,000 $15.5m $5.5m $10m $10m $68.5m This next deal is what has been reported about Revis’ deal with the Jets. Darrelle Revis’s deal with the Jets Year Salary Prorated Bonus Roster Cap No Dead Money Cap Savings Cash Total Cash 2015 $16m $0 $0 $16m $39m ($23m) $16m $16m 2016 $17m $0 $0 $17 $23m ($6m) $17m $33m 2017 $13m $0 $2m $15m $6 $9m $15m $48m 2018 $11m $0 $0 $11m $0 $11m $11m $59m 2019 $11m $0 $0 $11m $0 $11m $11m $70m Comparing my preferred deal to what Revis got Component Preferred Deal Jets Fully Guaranteed Money 26m 39m Total Guarantees 40m 39m Signing Bonus 22m 0m Term 4 years 5 years 2015 cap number 15m 16m APY 14.1m 14m Cash 46.5m 48m As you can see from above my preferred deal was close to what Revis got except in the structure. The Jets used a pay as you go feature where what Revis received in cash equals his cap number. The Jets were able to use the two advantages that they had over the Patriots in their construction of the deal. The Jets adjusted cap number is $156,149,394 while the Patriots is $144,578,084. Literally, the Jets could use $11,571,310 more cap space on Revis and build the rest of the 53-man roster than could the Patriots. $16 million takes up smaller percentage of $156 million than it does $144.5 million. Second advantage that the Jets had is that they have more cap space. The question I am struggling is why would Revis prefer a pay as you go structure from the Jets over a signing bonus structure from the Patriots. With a signing bonus he gets most of the money up-front. Please note that the Patriots often pay their large signing bonus in installments. In a pay as you go structure Revis has to wait until September to first receive any money. That is, unless the Jets agreed to deviate from the usual payment plan of 17 paychecks during the regular season. Six months of interest on $20 million is pretty significant. I am also puzzled why Revis would prefer the pay as you go structure of the Jets over a signing bonus from the Patriots. The Jets can get out of the deal and save cap space by releasing Revis before the start of the 2017 League Year. The Patriots can get out of my preferred Revis deal and save cap space on June 2, 2017. By that time a replacement will not be available in free agency. The Patriots could have done what they did with McCourty (fully guaranteed the 2015 and 2016 salaries and have the 2017 season eventually become fully guaranteed). This would have bumped his fully guaranteed money at time of signing to $35.5 million. Should the Patriots have matched the Jets structure? No, it would have meant a $21 million cap number for Revis ($16 million salary and $5 million signing bonus proration) in 2015. I currently have the Patriots under the cap by $13,611,603. Matching the Jets offer would have caused the Patriots to quickly create $2.4 million in cap space. As I show in this blog, the Patriots could have done so but it is not wise to make business decisions under pressure. Trying to anticipate questions that the blog post may cause: 1.) Question: Has any team won a Super Bowl with a player taking up a percentage as large as Revis’ if he played with a $21 million cap number? Answer: No. 2.) Question: If Revis played at a $21 million cap number in 2015 how much it would have cost to tag him in 2016? Answer: 120% of $21 million, or $25,200,000. 3.) Question: Are you surprised at what happened? Answer: Extremely so. I always thought that as long as Revis was willing to be paid in the neighborhood of the top cornerbacks ($12 to $14M APY) rather than the top defenders ($16M to $19M APY) a deal would get done. 4.) Question: Does the Revis departure prove that the Patriots are cheap? Answer: Only if you believe that looking at a small sample of data is fair. Haters are going to hate. They were silent in 2012 when the Patriots was among the leaders in cash spending. 5.) Question: Will Revis count as a compensatory pick.Answer:Yes. In Feb 2008 Pats declined option on Donte Stallworth. He signed FA deal with the Cleveland Browns on 3/1/2008. Pats got 2009 5th round compensatory pick that turned out to be George Bussey. So there is that precedent. Also, Darrelle Revis’ name is listed among the 2015 UFAs in the NFL’s free agency press release. Compensatory picks are meant to help compensate a team for its lost free agents. 6.) Question: If the Patriots had reached an extension with Darrelle, could they have prorated the existing $5 million signing bonus proration.Answer:No 7.) Question: Why do you think that the Patriots and Revis could not reach a deal? Answer: He wanted to return to New York and only by receiving a much better offer that would not happen. It seems strange to me that in a passing league very few teams entered into his bidding. 4:45PM update Am now hearing that Revis was asking for $16M from the Patriots. He signed with the Jets for $14M APY. 8.) Question: Your report of $13.6 million in cap space even after Revis departure seems low. Please explain. Answer: Saved the best question for last. Hopefully, I am up to the task:) The big leaps: Four contracts had huge salary-cap increases in 2015 – left tackle Nate Solder, right tackle Sebastian Vollmer and tight end Rob Gronkowski. Solder’s cap cost went $2,717,429 to $7,438,000. Vollmer’s cap cost went from $3,750,000 in 2014 to $7,020,833. Gronk’s cap cost went from $5,400,000 in 2014 to $8,650,000 in 2015. Smaller bounces: The other cap jumps in 2015 were more modest. Vince Wilfork, Danny Amendola, Kyle Arrington, Rob Ninkovich, and Julian Edelman are all scheduled for increases between $1 million and $3 million. Dennard’s cap number increased by $972,000. Chung’s increased by $945,000. Cannon’s increased by over $800,000. Blount’s increased by over $600,000. No one else on the roster is scheduled to go up by more than $500,000 Reached incentives in 2014 – A major reason for the first two reasons is that some players reached NLTBE (Not Likely To Be Earned) incentives in 2015 making them LTBE for 2015. Examples, Lafell’s receptions incentive now counts $300,000 against the 2015 cap. Edelman’s receptions incentives now counts $500,000. Wilfork’s playing-time incentive now counts $500,000. Vollmer’s playing-time incentive now counts $750,000. Wendell’s playing-time incentive now counts $850,000. In total, there are $3.5 million in LTBE incentives counting against the 2015 cap. There were $1.25 million in 2014. Reached incentives in 2014 (Part 2) – Patriots like to include 46-man active roster bonuses in their contracts. The amount that counts against the cap is dependent on the games that the Patriot played in the prior season. Amendola, Wilfork, Chung, and Hoomanawanui all played in more games in 2014 than they did in 2013. Their 46-man active roster bonuses are now counting against the cap for all 16 games. Players not signed past the 2015 season with large cap numbers - Nate Solder and Stephen Gostkowski. - See more at: http://www.patsfans.com/salary-cap/?p=1059#sthash.U7yC83OO.dpuf http://www.patsfans.com/salary-cap/?p=1059 Great Breakdown by Miguel. In the end Revis could have got a similar deal from a contender. He simply wanted to come home. Link to comment Share on other sites More sharing options...
bitonti Posted March 12, 2015 Share Posted March 12, 2015 Six months of interest on $20 million is pretty significant. just wanted to break this statement down interest rates are at historical lows the best, highest yield savings account is about 1% APY right now 6 months of interest on 20 mil is $100,000 Is that "pretty significant?" I guess it is to normallos like you and me but to Revis or the NFL teams it's a drop in the bucket. it's not really that significant compared to the starting point. this nerd-out was brought to you by coffee. Coffee, making numbers dance for 1000 years. Link to comment Share on other sites More sharing options...
Villain The Foe Posted March 12, 2015 Share Posted March 12, 2015 just wanted to break this statement down interest rates are at historical lows the best, highest yield savings account is about 1% APY right now 6 months of interest on 20 mil is $100,000 Is that "pretty significant?" I guess it is to normallos like you and me but to Revis or the NFL teams it's a drop in the bucket. it's not really that significant compared to the starting point. this nerd-out was brought to you by coffee. Coffee, making numbers dance for 1000 years. Great Point. This isnt 2006/2007 when People were making a nice return on interest such as government bonds. These days given the uncertainty of the markets, the fraudulent activity and Manipulation (Libor) to have your Money Held somewhere for a number of years just to receive the lowest rate of return while running the risk of one day waking up and your bank went under or the printing press accelerates simply isnt a good idea. You're safer just putting a rubber band around your Money than locking your Money into some interest bearing account. Atleast it will be in your Possession. Purchasing power is going down the drain and interest are not Keep up. Link to comment Share on other sites More sharing options...
Integrity28 Posted March 12, 2015 Share Posted March 12, 2015 I had a pretty good feeling he was NYC bound. One of my neighbors up here has an in-law close to the NFL, two things he's passed along to me over the past couple months: 1. Deflategate was nothing but "fight promotion" to create a heel vs. a hero level of interest in the game. 2. Revis handles his business, but he abhors Patriot fans, apparently he never intended to sign with NY last year because he "wanted to get paid and teach them a lesson" if he could, and now he's happy to have a ring, but vehemently regrets winning it for the wrong city. Link to comment Share on other sites More sharing options...
CTM Posted March 12, 2015 Share Posted March 12, 2015 I had a pretty good feeling he was NYC bound. One of my neighbors up here has an in-law close to the NFL, two things he's passed along to me over the past couple months: 1. Deflategate was nothing but "fight promotion" to create a heel vs. a hero level of interest in the game. 2. Revis handles his business, but he abhors Patriot fans, apparently he never intended to sign with NY last year because he "wanted to get paid and teach them a lesson" if he could, and now he's happy to have a ring, but vehemently regrets winning it for the wrong city. Link to comment Share on other sites More sharing options...
The Crusher Posted March 12, 2015 Share Posted March 12, 2015 I had a pretty good feeling he was NYC bound. One of my neighbors up here has an in-law close to the NFL, two things he's passed along to me over the past couple months: 1. Deflategate was nothing but "fight promotion" to create a heel vs. a hero level of interest in the game. 2. Revis handles his business, but he abhors Patriot fans, apparently he never intended to sign with NY last year because he "wanted to get paid and teach them a lesson" if he could, and now he's happy to have a ring, but vehemently regrets winning it for the wrong city. If Revis wins a Chmpionship with us he should show how much he loves us and hates them by putting a big (*) on the Ring he got from them and put it on display at Metlife stadium. #howulikemenowbitches Link to comment Share on other sites More sharing options...
Integrity28 Posted March 12, 2015 Share Posted March 12, 2015 I'm just passing along what I've been told. Half their family works for a major communications giant and has access to the NFL offices. For what it's worth, I hate Pats fans too. Link to comment Share on other sites More sharing options...
rillo Posted March 12, 2015 Share Posted March 12, 2015 TL;DR money talks. Link to comment Share on other sites More sharing options...
papz187 Posted March 12, 2015 Share Posted March 12, 2015 So Revis was asking for $16mil annually average from NE, but took $14mil from the Jets according to this report. Guess he really wanted to be a Jet. Sent from my SGH-M919 using Tapatalk Link to comment Share on other sites More sharing options...
HessStation Posted March 12, 2015 Share Posted March 12, 2015 Link to comment Share on other sites More sharing options...
Green Terror Posted March 12, 2015 Share Posted March 12, 2015 For what shall it profit a man, if he shall gain the whole world, and lose his own soul? Link to comment Share on other sites More sharing options...
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