What is the Real Market Value of Darrelle Revis
Well the big story in Jets land broke today that Darrelle Revis skipped OTA’s in the midst of a contract holdout. Sources told reporters that Revis was insulted by a lowball offer from the Jets and that he was showing his displeasure by not attending OTA’s. First of all this is not something to be concerned about at this stage. Revis was at workouts the day before and he had this “lowball offer” in his hand for some time. This is just the way the game works. Reporters are all over the OTA’s and agents know you make your mark by missing out on these activities. Revis’ team is well known for advising their clients to not participate when in a contract dispute, so this is something that was likely expected by the Jets organization.
The question is just what value should be put on Revis? Revis is a very interesting contractual case because he is not anywhere close to becoming a free agent. He is under contract to the Jets in 2010 for only $550,000 plus some workout bonus money and the Jets will hold his rights for $5 million in 2011. Revis’ salary escalates in 2012 to what should be $15 million, but there is a bit of a catch to that number. Revis is only going to earn it if he participates in most of the teams defensive snaps and keeps getting his Pro Bowl nods. So in order for Revis to earn the escalator, which really is only put in place to force the team to renegotiate an extension before 2012, he can’t afford to hold out and not be in shape during the regular season. Any significant drop in play will drop that 15 million much lower and if it reaches a value between 11 and 13 million the Jets may just bite the bullet for one year and deprive Revis of free agency until 2013. So Revis’ holdout options are limited.
Most young players maximize their value by negotiating extensions before they hit free agency, typically in their walk season. Usually the player has outperformed his pay scale for the upcoming season and the reward of holding out is far higher for the player in this situation. The team needs the player to perform at a high level and can not afford to have him sit out for an extended period of time. This is a prime reason why C Nick Mangold will likely be extended prior to camp since he has already insinuated he might not attend camp if he does not have a new deal in place. Mangold is the leader of the offensive line in what will likely be his walk year. Revis is a completely different situation because he is under contract until 2012 and his hold out reward is too low for him.
From the Jets standpoint you can understand presenting Revis with what he and his agent may consider a “lowball” offer. Revis is going to value his skills based on what he considers fair market value. The problem is “fair market” rarely presents itself when you are three years out from a contract expiration. At a minimum the Jets have Revis under contract for two seasons at about $6 million. At worst its $21 million over 3 years. What incentive do the Jets really have to rip up that deal and pay Revis fair market value? Assume the Jets give him a new 6 year contract, which is the standard length of contract extensions. Revis would not only get extra money over the next three years, but Revis would get his next free agent opportunity in 2015. If the Jets forced him to honor the next two years of the deal Revis’ next free agency opportunity is going to be 2017. Two years in the life of an NFL player is a long time and can be the difference between getting a huge deal or missing out on the next big contract. So it does not pay for the Jets to present him the chance in 2010 to be the highest paid non-QB in the NFL. It will in 2012, but not in 2010.
The first question that has to be asked is what exactly is the fair market value for the best CB in the NFL? That is extremely hard to answer. The problem lies with Oakland’s Nnamdi Asomugha signing a 3 year 45.5 million dollar deal with essentially the entire amount guaranteed. The first problem is that this is a deal signed by the Raiders, a team that has a front office with a terrible reputation around the NFL when it comes to veteran contracts. In these cases teams may just simply throw the numbers out the window because “it’s Oakland”. The Jets have been treated that way in the past in regards to draft pick signings where they have been accused of blowing up the slotting system for Revis, Vernon Gholston, and Mark Sanchez. The second issue is that its just a 3 year contract. While it is easy to say Asomugha got 15 million a year so Revis has to get at least that much, it is not a good assumption. When his deal expires with the Raiders Asomugha’s new salary will not be 15 million per year. It is going to be just slightly above the high mark right now. There is a major difference between 3/45 and 6/90.
Throwing Asomugha out completely we get to the next wave of corners that present the realistic market. The top contracts belong to Asante Samuel, Dunta Robinson, Nate Clements, DeAngelo Hall, and Chris Gamble. With the exception of Clements all of the contracts are for 6 years. The following table presents the players guaranteed totals, 3 year salary totals (which are virtually guaranteed), and average per year over the first 6 years of each deal.
|Name||Guarantee (Million)||3 Year Total(Million)||Average Per Year(Millions)|
What you see here is a pretty consistent pattern. Guarantees in the ballpark of 23 million and virtual guarantees of about 30 million. Averages per year are going to be in the 9 million dollar range. Clearly Revis is better than all of these players and there is no argument that if this was a “fair market” for him he would be the highest paid player by a large amount.
You can bring the Asomugha contract into this lot by seeing what percentage increase he received over Samuel’s deal. Asomugha’s $45.5 million dollar three year total represented almost a 42% increase over the contact Samuel signed in 2008. Looking at the Samuel average per year and assuming the Raiders would have used the same percentage increase you come out with a average per year of about 13.5 million. So I think this is probably the fair market assumption that would be made for Revis. 6 years $81 million with 46 million of the deal guaranteed by the Jets.
But as stated above Revis doesn’t have a the real “fair market” to necessarily negotiate with because of his current contract he is playing under. The Jets starting point would still have to be more than what Robinson just received from the Falcons. Revis is already essentially guaranteed $22 million over the next three seasons barring injury, right in line with almost all of the high paid corners and just a few million under Robinson‘s $25.5 million. If the Jets offered Revis anything less than Robinson and Samuel’s three year total it would clearly be a lowball offer that would insult Revis, especially after the Jets promised him a raise.
I think you would come to Revis’ fair value by looking at the real $13.5 million per year average and then taking into account the fact that Revis is only set to make 6 million over the next two years. If Revis was to earn 13.5 million each of those years it would represent a raise of over 300%, which is far too much of an increase. However, if you averaged out the salary to be 13.5 million in the first two years it still represents a raise of over 100% over the two year total and would place the total contract value at 67.5 million over 6 years. He would probably earn about 33 million in the first three years and the Jets may consider guaranteeing him money close to Asomugha by extending the guarantees into the 4th year of the contract. Such a contract would make Revis the highest paid corner in the NFL after just three seasons in the NFL and put him in line for another big contract at the age of 30 rather than 32, a major advantage for Revis.
How would the Jets structure such a deal? Revis made a good sum of money in 2009 so the 30% rules really do not play a significant role in his contract, which would allow the Jets to pretty much use a regular contract structure. With no cap being present the Jets should maximize his 2010 earnings which would mean that Revis could earn about $9.3 million in salary, which includes roster bonuses and workout bonuses. Because there remains a $1.26 million proration from his prior bonuses thru 2012 the Jets will look to reduce his salaries as much as possible in 2011 and 2012 to keep his cap number low. In order to reach the 3 year guarantee Revis would also require a signing bonus in the vicinity of $13.3 million. It is likely the Jets would also award Revis with another small signing bonus in the 4th year of the contract that would give him that same guarantee earned by Asomugha. Here is a sample structure for the contract:
|Year||Salary||Original Bonus||Signing Bonus||2nd Signing Bonus||Salary Cap Number|
|New Money Totals||$50,192,390||$0||$13,307,610||$4,000,000||$67,500,000|
Such a structure allows the Jets to keep his cap number under $10 million in 2011 and 2012 which are really the two key years for the Jets with so many players to
re-sign. The only truly questionable cap number would be the 2014 cap figure over $13.5 million, but the Jets could either consider an extension or to bite the bullet
and have him play it out. The money in 2015 would never be seen. Revis would either be restructured or released.
Im sure more details of the negotiations will be leaked to the public in the coming days to see just how far apart the two sides are, but after a closer look at the other contracts on the market and considering Revis' current contract situation a 6 year $67.5 million dollar deal seems like a fair compromise for both sides. The Jets get Revis as a somewhat reasonable cap charge for the next 4 years. Revis becomes the highest paid corner in the NFL and will be in line for another big contract either with the Jets or another team before he turns the wrong side of 30. It's a good deal for both sides. If Revis wants a bigger contract he will have to play out the next two seasons and see what 2012 holds for him.
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