*Though the news of Russell’s extension was announced in the very early hours of Tuesday morning, I wanted to make sure that I took the time to make a detailed, well researched argument as to whether the new Wilson extension was a good signing or not*
It’s done. Four years, $140 mil, $65 mil guaranteed, and a “no trade” clause.
There has been a lot of division concerning the recent contract extension of Seahawks franchise QB Russell Wilson – and that is just between Seahawks fans! In only scrolling through the multiple social media fan groups I am personally a part of, it seems that half of the fan base is mad at Russell for being greedy and wanting to be the highest paid QB/player in NFL history, while the other half are just happy that Seattle re-signed the best QB in franchise history.
The questions remain though: Have the Seahawks now made a mistake, paying so much for a QB that had only the 20th most pass attempts of all QBs in the NFL in 2018? Are the Seahawks now handcuffed and unable to re-sign Frank Clark, Bobby Wagner and other players to build for the future?
Highest Paid QB/Player
The fact that Russell Wilson is now the highest paid QB/Player in the NFL will last no longer than 12 months…and that is being VERY generous. With how contracts are continually growing, it will not be long before this contract gets passed up. Over the next 2 seasons Carson Wentz, Dak Prescott, Ben Roethlisberger, Cam Newton, Philip Rivers, Jared Goff, Jameis Winston, Marcus Mariota and Eli Manning all have contracts ending. While most of these QBs will likely not get Russell type money, it is possible that four or five of them will get contracts bigger than Wilson’s new deal.
In three years, Patrick Mahomes, Deshaun Watson, and Mitchell Trubisky will be receiving new contracts as well. All three of them will undoubtedly get deals bigger than Wilson’s, with Mahomes estimated to be the NFL’s first $200 million man.
Wilson’s deal is actually very team friendly in the long run. Russell is playing the 2019 season on his previous deal as his new extension does not go into effect until the 2020 season. The current NFL salary cap for 2019 is $188 million and has risen by $10-12 million every year from 2013 until now. There are many reasons to believe that the salary cap is only going to increase by even bigger amounts over the course of Wilson’s new contract, one being a new Collective Bargaining Agreement (CBA) coming soon that will go into effect for the 2021 season.
But first, lets start with the Seahawks’ current salary cap situation.
Seattle’s Cap Room
Wilson’s new contract extension, set to begin in the 2020 season, has no effect on the current salary cap. According to Over The Cap, Seattle still has over $10.2 million in cap space for the 2019 season to sign their rookies and get other free agent help.
With just a basic knowledge so far of how the numbers will play out year by year in Wilson’s contract, we will use the amount of $35 million in 2020 (I am guessing the contract will be structured to grow with the salary cap, so his first year could be closer to $30 million in order to help the team, but I will use the average yearly amount in this example) to see how it will effect future cap space.
*Again, this is my estimation of the how numbers may work out after researching the current state of player contracts around the league*
The current projected Salary Cap for 2020 is sitting at $200 million. Over The Cap has the Seahawks with $95 million in cap space for 2020 before Russ’ contract is added on (probably because we still don’t know for sure how exactly the numbers will be worked for each season). Guessing the first year will be around $35 million, that leaves Seattle with $60 million in projected cap space.
Bobby Wagner is also up for a new contract as his current deal also expires at the end of the 2019 season. Seattle will do everything they can to keep their defensive QB in the fold. It can be assumed that Wagner would want to be the highest paid linebacker in the league putting his contract at $17.5-18 million per year. Once more, I am guessing the contract will be structured to grow with the salary cap, but I will estimate that Wagner’s cap hit for 2020 would be about $18 million, which leaves us with about $42 million in remaining cap.
The one thing that could make Wagner’s deal a little more team friendly is the fact that, while he is negotiating his own deal without an agent, he is also consulting with both Richard Sherman and Russell Okung (both of whom represented themselves with the Seahawks).
Where things will start to get sticky is looking at Frank Clark and Jarran Reed. Both players are due new contracts in 2020 as well, with Clark currently playing on the franchise tag at $17 million. The recent signing of Edge Rusher DeMarcus Lawrence by the Dallas Cowboys to a 5 year extension worth $105 million ($21 million per year) will play a part in these contract negotiations. Clark will most likely be looking to match that yearly total, or possibly beat it considering he has as many career sacks as Lawrence with one less year in the league.
There are a couple strikes against Clark though, in comparing him to Lawrence for his upcoming contract. According to Pro Football Reference, Lawrence plays more total snaps, more special teams snaps (69 to 6 in 2018) and has averaged more tackles per season (39.4 to 34.0). If the Seahawks were to give Clark the deal everyone assumes he will want at $20+ million per year, it would only leave about $20-22 million in estimated cap space. This would make it very difficult for the team to re-sign Reed, as well as possible free agents, unless the salary cap is higher than expected for 2020.
There is basis for the thought that the Seahawks could trade Clark in the next week leading up to and during the first night of the NFL draft. It would ease cap space for the 2019 season and beyond, taking the $17 million franchise tag off the books, taking away the possible cap hit in future years, and provide Seattle with much needed draft picks as right now they currently have a league low of four for the entire 2019 draft. It can be assumed that Seattle is already planning/working on opportunities to trade back to later in the first round, or possibly out of the first round completely in order to gain some more draft capital.
If the Seahawks decide to retain Clark, Jarran Reed is likely to not get re-signed, as he could be looking for $15+ million per year on his next contract – he had a breakout season in 2018 with 10.5 sacks, 24 QB hits, 50 combined tackles, and 2 fumble recoveries from the interior defensive line. Seattle could make it work (again, it is all based on how the contract is structured). If Clark gets traded, Seattle will have plenty of cap room to hold on to Bobby, re-sign Jarran Reed and have extra space to look for free agent help, even with Russell’s contract. If they sign all four of the players above, it would leave Seattle with only $6-10 million in cap space to work with.
One more thing that Seahawks fans need to take into account for 2020 is Kam Chancellor’s contract. Since Kam has only stated that he can never play the game again but has not officially retired and turned in the retirement paperwork to the NFL head office, his contract counts for $12.5 million against the salary cap for 2019. If the Seahawks cut him, it will only save $2.3 million in cap space. However, for 2020, Kam’s contract counts for $14.5 million against the cap unless he is cut before June 1st of 2020, which will save the $12 million in cap space. Add that to the $6-10 million above and, after finalizing Wilson’s deal, the Seahawks could possibly sign Wagner, Clark and Reed, cut Chancellor, and have $18-22 million in cap space to work with as a conservative estimate for 2020.
All of these estimates above are based on using the “average yearly salary” of projected contracts. Most contracts are negotiated to grow with the salary cap, making it easier for teams to shoulder the burden of larger contracts and be able to bring more talent into the team. Going through the above scenario where all of the contracts are structured to grow with the cap (meaning Wilson’s contract would be scheduled for around $30 million in 2020, $33 million in 2021, $37 million in 2022 and $40 million in 2023), the Seahawks could sign the four players above and still have close to $30 million in cap space for 2020.
Beyond 2020, there are a few more factors that help make the case that Russell’s contract is great for the Seahawks.
Legalization of Sports Betting
According to an article in Business Insider by Scott Davis, the NBA is already preparing for an eventual spike in the salary cap due to the Supreme Court’s 6-3 decision to strike down a 1992 federal law that prevented most states from legalizing sports betting in May of 2018. This decision opens the gate for states to decide for themselves on whether or not they want to legalize sports betting. As more and more states open up for gambling, it will create more revenue for all of the major sports in America.
Joseph Zucker of Bleacher Report stated in a January 2018 article that the NBA is seeking a 1% fee on all wagers made on the NBA. If casinos and sports books are willing to make this kind of deal with the major sports leagues (even for just a fraction of a percent), that could make for a lot more money going to the leagues to be passed down to the teams for salary. With $4.8 billion wagered legally in Vegas in 2017, and an estimated $150 billion in illegal wagering in the U.S., money could start pouring in from legalized gambling for not only the NBA, but also for the NFL which is the second most bet on sport in the world (behind only soccer).
Another part of the sports betting equation is leagues partnering with casinos. The NBA reached a 3 year, $25 million partnership agreement with MGM Resorts to become the official gaming partner of the NBA and WNBA. While the money may not be a ton, for now, it is a start. The deals will only grow and become more lucrative for the casinos AND the leagues, especially as the NFL starts looking into similar partnerships.
We need to also take into account the many states that do not currently allow money to be played on fantasy sports platforms like DraftKings and FanDuel. Once the sports betting landscape opens up across the United States, fantasy sports will as well, meaning more money to these platforms, who will in turn work on partnerships with the NFL, which is the largest revenue stream for daily fantasy websites.
As the world is going more mobile, live streaming is becoming the preferred method of consuming live content. In 2017, the NFL struck a deal with Verizon for an estimated $2.25 billion over 5 years ($450 million per year) for the 2018-2022 seasons. The previous deal between Verizon and the NFL was for $1 billion over 4 years.
Amazon re-upped its deal with the NFL in 2018 to stream “Thursday Night Football” for the 2018 and 2019 seasons. The 2017 agreement was for $50 million while the current two year deal is for an estimated $65 million per year. Twitter’s 2016 deal with the NFL for the Thursday night games was only worth $10 million.
YouTube has been unsuccessful to this point in reaching a streaming agreement with the NFL. However, if YouTube and its 1.5 billion logged-in users per month can work a deal for streaming the NFL, it will likely be worth more than previous streaming deals that the NFL has struck with Amazon.
According to CNBC, the NFL does not disclose how much its TV contracts are worth. That being said, it has been reported that NBC, Fox and CBS pay around $3 billion per year collectively to the NFL for the rights to broadcast the games. FOX’s current deal just for Thursday Night Football is for 5 years and $3 billion ($600 million per year). That’s right….just so FOX can air Thursday Night Football games. From what I can gather, most of the TV contracts for the NFL are set to expire in 2022, meaning they will be renegotiated before then so they can take effect for 2023, which is the final year of Wilson’s contract. I can only assume that future TV deals are going to be worth more money than the previous ones, passing more money to the NFL to distribute to teams for the salary cap.
With the legalization of gambling, live streaming, and television contracts renewing within the next two to three years, there is going to be a lot more money pouring into the NFL. If it only continues to increase at its current level from the past 6 years, the Salary Cap will reach $250 million by the time Russell Wilson’s contract is up. I would not be surprised if the cap is much, much higher going into the 2024 season.
Whenever a player gains the moniker of “highest paid player” there is going to be a lot of scrutiny as to whether it is deserved or not. Though the utilization of Wilson in the Seahawks’ offense has caused many to question why a player would get paid so much to hand the ball off 30 times a game, as far as Seattle’s decision makers are concerned, Russell’s value goes beyond how many times he throws the ball – it’s when he makes the throws.
Contracts are usually based on a combination of past performance and future projections. The Seahawks know what Russell has done for the the organization to this point in his career. They also see good things still to come.
Whether you agree with it or not, Russell is the Seahawks’ QB for the foreseeable future. I personally think he is worth every penny and that this contract will not sink Seattle’s chances of further franchise glory.