Inside the CMC Contract

[kungfoodude]

https://overthecap.com/thoughts-on-the-christian-mccaffrey-64-million-extension/

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Pro Football Talk broke down the Christian McCaffrey $64 million extension tonight which gives us a chance to look at the details of the contract and see how is stacks up against some comparable players and for the Panthers in general.

Obviously it’s a pretty strong contract for McCaffrey. Here are the year by year cash flows compared to the other two recent big money running back contracts.

 

Player	Year 0	Year 1	Year 2	Year 3	Year 4
Christian McCaffrey	$19,263,412	$27,863,412	$39,863,412	$51,863,412	$64,063,412
Ezekiel Elliott	$15,100,000	$24,700,000	$37,100,000	$48,000,000	$58,000,000
Todd Gurley	$15,000,022	$28,050,022	$37,050,022	$47,050,022	$57,500,000

McCaffrey will really jump the field in “Old year” (year 0) payments where he will earn a $19.2 million raise over his existing contract. The other two players earned just $15 million. He will, however, actually trail Gurley in first year new money which looks to be one of two concessions made by his side. He jumps the field with nearly $40 million in new money earned by the second new contract year and got well over $50 million for three years. That number is stunning to me because the natural progression would have been to get to $49 million.

 

In terms of contract structure I’d consider this also pretty favorable for McCaffrey. Here is the breakdown of the three players based on their effective contract values (this included old and new money) to better put the guarantees into perspective. For Elliot we are only using six years rather than the full eight to make a fair comparison. While the contract years should be a driver of sorts for guarantees in the case of a running back those back end seasons are guaranteed worthless so I think for this it makes sense to use the same timeframe as the other two.

 

Player	Total Value	Prorated	% Prorated	Injury guarantee	% Inj Guaranteed	Full by next Year	% Full by next year
Christian McCaffrey	$75,362,500	$21,500,000	28.5%	$39,462,500	52.4%	$38,462,500	51.0%
Ezekiel Elliott	$70,952,187	$20,500,000	28.9%	$50,052,137	70.5%	$37,652,137	53.1%
Todd Gurley	$69,449,978	$21,000,000	30.2%	$45,000,000	64.8%	$34,500,000	49.7%

The second concession I see here is on the injury guarantee on the contract. Elliot was over $50 million which was over 70% of his four year value while Gurley was at $45 million. McCaffrey is essentially at $40 million. He will get the most quick protection though, with $38.4 million guaranteed within one year of signing. That trails Elliot on a percentage basis but it is the largest of the group and considering the riskiness of the position is a good thing for him. The $21.5 million signing bonus did surprise me a little only because I thought there were better ways they could have structured this but if the goal was to surpass Gurley then he got that done, even if again on a percentage basis he didn’t.

Overall Id say the mission here was to mimic Gurley’s contract adjusted for cap inflation and in that respect it is pretty much mission accomplished with the exception of the injury protection.

As for the cap charges we should be looking at charges of $7.8M, $12.5M, $12.9M, $16.3M, $16.3M, and $12.2M. Those first few years are reasonable which is important especially because there is a good chance that the salary cap in 2021 may be significantly impacted by the Covid-19 crisis. So having a reasonable number in 2021 is something teams should be aware of.

McCaffrey, barring a suspension, will be uncuttable until 2023 at which point the dead money would be $8.6 million. He received the same favorable vesting schedule on his 2022 guarantee that Elliot and Gurley negotiated on their third year guarantee so once that kicks in the dead money will rise to $21 million. A trade that year would cost $12.9 million. None of these scenarios would be ideal for Carolina.

 

For the Panthers to get any value out of this contract they need McCaffrey to be effective through at least 2023. Anything less than that is really a waste. If we assume that the franchise tag in 2022 will be around $12 million and his 2023 tag would be $14.4 million they could have gone the tag route and paid $26.6 million for those two seasons. On his current contract he will earn $27.86M in additional money by 2022 and $39.87M by 2023.

Basically the Panthers are paying an extra $15 million for the 2022 season and $13.2 million for the rights to both years. The cap number for those years is $12.9M and $16.3M so its not as if there is even a salary cap benefit to not playing on the tag those season. So he has to be on the team in 2023 for this contract to make any sense for the team. As I discussed the other day that would be a long shot but they have to hope he is the one otherwise they will get the same treatment the Rams got a few weeks ago when they cut ties with Gurley.

 

[kungfoodude]

https://overthecap.com/otc-podcast-the-big-running-back-contracts-strike-back/

 

A good listen on why McCaffery's contract doesn't make a lot of football sense. 

[mrcompletely11]

^^wait, is that contract breakdown different then the previous PFF one?

[mrcompletely11]

People can argue his value, his contract or whatever about this episode but if the panthers were leaning into analytics they clearly didnt look into the numbers before they did this.

 

https://overthecap.com/the-outcomes-of-running-back-contracts/

 

 

[kungfoodude]

22 minutes ago, mrcompletely11 said:

^^wait, is that contract breakdown different then the previous PFF one?

No. It's a deeper look.

[kungfoodude]

I like OTC's podcast take on it, in a sense we are really paying CMC for past production. Not a smart business decision but he does deserve that money at some level. 

[mrcompletely11]

2 minutes ago, kungfoodude said:

I like OTC's podcast take on it, in a sense we are really paying CMC for past production. Not a smart business decision but he does deserve that money at some level. 

Its two sides.  He "deserves" the money but its also a bad deal for the team.   As OTC points out it rarely works out for the team.   And if we keep using him like we have been its going to end really bad and really quick for the panthers

[mrcompletely11]

14 minutes ago, kungfoodude said:

No. It's a deeper look.

I think overall the implication is that the decision to wait is backed up by pretty much all the data available. In almost every case the players value was likely going to fall, not rise, in the two years remaining on that rookie contract. Id argue from looking at the list of players the ones who bucked the trends overall were Peterson, McCoy, Forte and Lynch. So maybe McCaffrey will be like those four players. Its about a 10% chance that his value would remain constant and over the next two years the Panthers and fantasy owners will be happy with the performance. $16 million for a 10% chance. I wouldn’t call that a great management or decision making but we shall wait and see how things unfold over the next two seasons.

 

 

The last line of the breakdown is exactly why I though giving him the ext at the time doesnt make sense and when you see it in black and white its not really debatable. 

[kungfoodude]

Just now, mrcompletely11 said:

Its two sides.  He "deserves" the money but its also a bad deal for the team.   As OTC points out it rarely works out for the team.   And if we keep using him like we have been its going to end really bad and really quick for the panthers

I don't think there is any question about that. We cannot continue to have this high of a usage rate because it will break him down at a very accelerated rate and it will also mean we have a very bad offense. The numbers we saw from him the last two seasons are a clear indicator that we had a completely broken offense, which as fans we could all see on an almost weekly basis. 

In the ideal scenario our offense becomes much better overall, which would naturally lower his receiving targets tremendously(as those are less efficient plays, typically) and probably lower his overall carries, as well. Well that ideal scenario also makes him not worth a massive contract. 

[kungfoodude]

1 minute ago, mrcompletely11 said:

I think overall the implication is that the decision to wait is backed up by pretty much all the data available. In almost every case the players value was likely going to fall, not rise, in the two years remaining on that rookie contract. Id argue from looking at the list of players the ones who bucked the trends overall were Peterson, McCoy, Forte and Lynch. So maybe McCaffrey will be like those four players. Its about a 10% chance that his value would remain constant and over the next two years the Panthers and fantasy owners will be happy with the performance. $16 million for a 10% chance. I wouldn’t call that a great management or decision making but we shall wait and see how things unfold over the next two seasons.

 

 

The last line of the breakdown is exactly why I though giving him the ext at the time doesnt make sense

And that was my take on this long before he signed this contract. I have consistently talked about not giving CMC a big contract because it's overspending on a devalued position and the history of big RB contracts in recent years is pretty scary. As the article states, you are basically taking a huge gamble that McCaffrey ends up being a statistical outlier. That isn't just bad management/bad business, it's an awful way to gamble.

[steven8989]

6 hours ago, kungfoodude said:

And that was my take on this long before he signed this contract. I have consistently talked about not giving CMC a big contract because it's overspending on a devalued position and the history of big RB contracts in recent years is pretty scary. As the article states, you are basically taking a huge gamble that McCaffrey ends up being a statistical outlier. That isn't just bad management/bad business, it's an awful way to gamble.

[kungfoodude]

4 hours ago, steven8989 said:

Hey, at least I have stayed consistent on my point of view. I definitely don't want to take the role of looking like a "CMC hater." I love the kid but professional football is still about making smart moves as a franchise. It's hard to call this a smart one at the moment. Especially when we could have gotten out cheaper by retaining him and then franchising him after his 5th year option.