Posted to FootballOutsiders.com on 04.14.10
Now that the Redskins have traded for their franchise quarterback in Donovan McNabb, the next item of business as it relates to the McNabb-Redskins relationship is a contract extension. McNabb is in the final year of his contract that was traded from the Eagles. Under this deal he is due a guaranteed $6.2 million roster bonus and a $5 million salary, of which $3.5 million is guaranteed.
The challenge for the Redskins is to come up with a contract that secures McNabb beyond 2010, while at the same time protects the club’s interests from a financial investment and team salary management perspective. Remember that several years ago the Redskins traded for wide receiver Brandon Lloyd, who at the time was under contract for one year. Upon trading for Lloyd, the Redskins promptly signed him to six year extension with $10 million guaranteed. Lloyd lasted only two seasons in Washington.
The lesson learned from the Brandon Lloyd failure is that a club does not want to compound the loss of draft picks for a player who does not fit the organization by additionally making a significant financial investment in said player. Surely, the Redskins would have been disappointed by trading away draft picks for Lloyd, but the mistake would have been easier to stomach had they not made such a significant investment in Lloyd.
Similarly, the Redskins want to mitigate their potential financial and potential salary cap risk in executing an extension with McNabb. To this end, a great structure for a McNabb deal is the “pay as you go” structure. It is this same structure that the Packers used with quarterback Brett Favre in his final years there. The “pay as you go” structure limits the club’s exposure to dead money in the event that the club chooses to terminate the contract, as this structure either does not utilize or minimally utilizes signing bonus that would prorate into future years. Utilizing this structure with McNabb, the Redskins could account for McNabb’s guarantee entirely in the uncapped 2010 league year by virtue of a combination of guaranteed salary and roster bonus, and then in the subsequent years provide McNabb with significant upside in the form of substantial salaries or a combination of salaries and roster bonuses, none of which would be guaranteed. Of course all of these numbers would have to be 30% rule compliant, but by using this structure, if the Redskins find out that McNabb is not the quarterback they expected, then by terminating him they could face limited to no dead money issues.
In terms of the market value of a McNabb contract; from a guarantee perspective, if Kurt Warner and Jake Delhomme in 2009 can get $15 million and $19 million guaranteed respectively, then McNabb can surely expect a guarantee in that ball park, if not, the $20 million to $22 million range. From an average per year perspective, the going rate for elite veteran quarterbacks not named Brady or Manning (Peyton that is) seems to be in that $12 million to $12.5 million range. Quarterbacks in this range include Favre and McNabb’s current contract, so it would make sense that McNabb could receive an extension in that same range, which over five new years equals a total package of roughly $62.5 million.
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