The myth of the rookie QB contract

John Schneider made the most momentous NFL draft pick of the 2010s surrounded by telephones, swiveling chairs and people who questioned him. Schneider, the then-40-year-old general manager of the Seattle Seahawks, knew precisely what he wanted to do in the third round of the 2012 draft. Months earlier, he’d called head coach Pete Carroll and raved about Russell Wilson. Come April, Schneider was “hell-bent” on drafting him. But the coaching staff, according to a source who was in the room that day, wasn’t so sure.

“Well, you know, he’s short,” the source recalled Carroll saying. “He doesn’t fit our system.”

The decision they ultimately made, and the results it helped produce, have influenced NFL roster building since. The Seahawks took Wilson and rode him to a Super Bowl in his second season. They nearly won another the following year while spending just over $2 million on quarterbacks, the smallest sum of any team over the past decade. Their success, to some, became a model. The capable QB on an affordable rookie contract became the most prized asset in football, and teams began building around that four-year window.

As some paid tens of millions to veteran QBs, the theory went, the NFL’s rookie scale allowed others to get similar performance on the cheap — and construct a more complete roster with the leftover cash. The past four Super Bowls have featured a team that fit this mold. The Eagles won with (an injured) Carson Wentz in 2018. The Jared Goff-led Rams came close a year later. The Chiefs reached the pinnacle twice with 5% and 4% of their salary-cap space allotted to football’s most important position.

Other teams, according to NFL execs, have tried to replicate that success. The proportion who start inexperienced QBs has risen. The proportion who hesitate to give second contracts to sub-elite signal-callers has grown. “You’re starting to hear the chatter now that it might be better to, every four or five years, get another quarterback on a rookie deal,” says former Bills GM Doug Whaley.

But the early 2010s Seahawks, according to the source, never verbalized any of this as a strategy. It wasn’t the lesson they extracted from their own success. It is, instead, misguided.

Yahoo Sports compiled and analyzed 10 years of data on quarterback salaries, experience, performance and team success. Using numbers from Spotrac and Football Outsiders, we designed a metric to compare a given quarterback's performance to a salary-based expected performance. We hypothesized that we’d find a strong correlation between that metric — performance relative to salary — and winning.

Instead, we found a relatively weak correlation (R2 = 0.17), and a stronger one (R2 = 0.44) between QB performance alone and team success.

The takeaway, in short, is that the rookie-contract QB craze is overblown. “It's a theory,” says longtime NFL GM Bill Polian, “that works in practice if you happen to have a very good [young] quarterback. If you don't have a very good [young] quarterback, it doesn't work so well.”

EAST RUTHERFORD, NJ - FEBRUARY 02:  Quarterback Russell Wilson #3 of the Seattle Seahawks celebrates with the Vince Lombardi Trophy alongside head coach Pete Carroll after their 43-8 victory over the Denver Broncos during Super Bowl XLVIII at MetLife Stadium on February 2, 2014 in East Rutherford, New Jersey.  (Photo by Kevin C. Cox/Getty Images)

The advent of the rookie wage scale

Ten years ago, as top draft pick salaries ballooned without restriction, the NFL decided to restrict them. The league implemented a rookie wage scale that established a hard ceiling for rookie contracts and rigid financial guidelines for each draft slot.

In 2010, the final year before the scale went into effect, No. 1 overall pick Sam Bradford signed a six-year, $78 million contract containing a then-league-record $50 million in guaranteed money. It was comparable to second and third contracts signed by the likes of Tom Brady, Ben Roethlisberger and Drew Brees.

One year later, top pick Cam Newton netted a four-year, $22 million deal. Instantly, he became one of the NFL’s biggest bargains.

While the rookie pay scale limited the amount top draft picks could earn, the going rate for established quarterbacks swelled. In July 2012, Brees signed a five-year, $100 million contract, the first in NFL history that paid $20 million per season. Six years later, Matt Ryan signed the first deal worth $30 million per season. More recently, Dak Prescott, Josh Allen and Patrick Mahomes have secured new contracts worth $40 million-$50 million annually. The salary cap boom, from $120 million in 2011 to $198 million last season, boosted that trend. But even relative to the cap, QB spending has risen, from 8.6% of all cap money in 2011 and 2012 to 11.4% in 2018 and 2019.

The increase was driven entirely by veterans. The rookie wage scale, meanwhile, kept young QB salaries flat, creating a massive gulf between newbies and quality vets. That gulf is why NFL executives say there is value in starting quarterbacks on rookie deals. A team that has one faces less pressure to unearth potential starters or key contributors with late-round draft picks. It typically has surplus cap space to surround its quarterback with quality depth, and to splurge on high-priced veterans at other key positions.

“It’s stupid to say there’s not an advantage," says former Packers executive Andrew Brandt. "Because a quarterback on a rookie contract might be the most undervalued player in all of sports."

And so, executives say, some teams began chasing that player. They began reaching for QBs higher in the draft — on average, four have gone in the first round since 2017, up from 2.65 over the previous 17 years — and turning over franchise keys sooner. “There are no more days of sitting and learning,” Brandt says.

The problem, however, is that these teams have been chasing an advantage that is minimal and difficult to obtain.

You can’t hide bad QB play

The craze has been fueled by anecdotal evidence. The empirical trends tell a truer story: For every Wilson, there are several Sam Darnolds; for every championship won by an underpaid Wilson or Mahomes, there are multiple won by handsomely paid veterans.

A comprehensive study of the rookie wage scale’s first decade revealed that the optimal NFL roster structure does not exist. There is no one way to build a contender, no best way to build a Super Bowl champ. Of the NFL’s last 10 title winners, six paid their quarterbacks above the league average; four paid below it. The 40 teams that reached conference championship games over that span paid their quarterbacks anywhere from $2 million to $30 million. On average, they paid smack dab in the league’s 50th percentile.

(Michael Wagstaffe/Yahoo Sports illustration)
(Michael Wagstaffe/Yahoo Sports illustration)

Success, in reality, has been fueled not by cheap QBs, but by good QBs.

“The key,” Polian says, and “the whole point” of any roster-building strategy, is to get a “top-flight” QB, no matter how, and no matter how much you have to pay. The idea that you can’t build around an expensive one, Brandt argues, is a “copout,” and simply “wrong.”

In fact, the value of the extra cap space opened up by a cheap QB barely shows up in data. Among teams who got top-tier quarterback play over the past decade — the top 20% by Football Outsiders’ DYAR metric — there was virtually zero correlation between QB salary and winning. The 2019 Cowboys spent just 1% of their cap space on Dak Prescott’s 4,902 yards and 30 touchdowns — and missed the playoffs. The 2020 Colts, on the other hand, spent a record sum that yielded only mediocre QB play — and won 11 games.

In theory, overpaying at quarterback would create deficiencies elsewhere on the field. But, executives say, it’s easier to find cheap talent at many of those other positions. It’s also easier to mask those deficiencies. “You can hide a left tackle by putting a tight end over there or having a back in the backfield,” Whaley explains. “A linebacker, you can hide schematically. It’s hard to hide deficiencies in the quarterback position.”

It’s also easy to manipulate the salary cap to make room for a pricey veteran. Teams can creatively structure new contracts or restructure existing ones to stay under the cap, even as they exceed it by tens of millions in cash spent. This past June, the Titans restructured Ryan Tannehill’s four-year, $118 million contract to create cap space to acquire Julio Jones. They converted guaranteed money into a prorated signing bonus, decreasing Tannehill’s cap hit to $11.1 million this year but increasing it to $38.6 million in 2022, $36.6 million in 2023 and $4.6 million in each of the first two years after the contract expires.

Too many go-for-broke moves like that can land a team in cap distress, but the savviest front offices know how to pick their spots. Polian surrounded Peyton Manning with talent in Indianapolis, and never once felt hindered by Manning’s hefty contracts. Brandt managed the Packers’ cap around Brett Favre without mortgaging the franchise’s future under Aaron Rodgers.

“Listen,” Brandt says, “You can have a $30 [million]-$40 million quarterback on a $200 million cap. That’s OK.” You can still fit plenty into the leftover $160 million.

Which is why, in quarterback contract decisions, “it’s always going to be performance that matters most,” Whaley says. “The only time the financial aspect matters is if you bet on the wrong guy.”

The Rams and Eagles offer cautionary tales. They hitched themselves to Goff and Wentz, respectively, with proratable signing bonuses and guaranteed options. A year later, they realized they’d made mistakes, and are now stuck with two of the largest “dead money” charges in NFL history. Goff will take up $24.7 million of the Rams’ 2021 cap room while playing for the Lions. Wentz will account for $33.8 million of the Eagles’ space while playing for the Colts.

“Teams get in cap trouble not because of paying a lot of salary,” Brandt says. “They get in trouble because of dead money.”

They get in trouble not because of a dollar number, but rather because they chose a quarterback who forced them to eat it.

GREEN BAY, WISCONSIN - JANUARY 16: Jared Goff #16 of the Los Angeles Rams prepares to take the field before the NFC Divisional Playoff game against the Green Bay Packers at Lambeau Field on January 16, 2021 in Green Bay, Wisconsin. (Photo by Stacy Revere/Getty Images)
Jared Goff will take up $24.7 million of the Rams' salary cap this season despite not playing for the team. (Stacy Revere/Getty Images)

Contract mistakes are never about the dollars

Every team enters contract negotiations with a number in mind. The mid-2000s Colts were no different. As they prepared to offer Manning an extension, Polian, his staff and owner Jim Irsay sat around a room in Indianapolis. They evaluated their All-Pro QB, and comparables around the league. Salary cap gurus gave their input. Together, they came up with a valuation, a dollar figure they hoped Manning’s agent, Tom Condon, would agree to.

Then Irsay asked the most relevant question of all: Bill, if Peyton were out on the open market, how many teams would he have chasing him?

Polian began listing teams — one, then a second, then a third. When he got to four, Irsay cut him off.

Stop. Hold it. I get it, Irsay said. Do the best you can, let's try and bring it in on our number … but we need to sign him.

And that, in a nutshell, is how most discussions about coveted quarterbacks go. Agents and their clients have overwhelming leverage in an increasingly pass-happy sport. Quarterback is unquestionably its most important position. It’s also the hardest to find. The draft is a crapshoot. Upper-echelon QBs rarely hit free agency. For any team that has one, extending him is almost always preferable to the alternative.

So, Polian says with a laugh, “whatever your number is,” the number you end up paying is “going to be higher.”

The data, though, suggests that isn’t a problem. Established quarterbacks like Manning and Mahomes aren’t overpaid. Teams should go beyond internal valuations to sign them. “It’s not tough to decide with the Patrick Mahomes of the world,” Whaley says.

“It’s the Baker Mayfields, the Lamar Jacksons,” he continues. “That’s when you get into a dilemma of, ‘What should we do?’”

The Browns and Ravens, respectively, haven’t yet decided. They entered 2021 with starting QBs on the fourth year of rookie deals, with negotiations over extensions either ongoing or on hold — and perhaps influenced by those aforementioned cautionary tales. The Rams and Eagles didn’t wait for a fourth year to be absolutely sure that Goff and Wentz were franchise QBs. They paid a price.

The Browns and Ravens will also pay for waiting. The market for second-contract QBs is constantly on the rise. The Rams and Eagles tried to get out in front of it and save money. If Mayfield or Jackson starts strong in 2021, “then you’re going to pay him an extra $5 million a season,” an NFL GM recently told Yahoo Sports.

Executives and data alike suggest it’s a price worth paying. The Browns and Ravens, essentially, are buying clarity, more firm answers to questions such as: Is Jackson an accurate enough passer to carry a team through the playoffs? Can he continue to gash opposing defenses with his legs while avoiding injury? Can Mayfield build off a prolific 2020 stretch run? Or will he regress the way that Goff, Wentz, Marcus Mariota and Mitch Trubisky all did? Might the Ravens or Browns ultimately be better off moving on and dipping back into the draft?

And therein lies the true value of the rookie scale. It allows teams to swing, miss, and swing again a few years later, unburdened by a draft mistake. It allowed the Bears to take Trubisky second overall in 2017, anoint him their franchise QB without paying him like one, then move on and start anew with Justin Fields in 2021.

The value, though, isn’t in winning during that four-year job interview. It isn’t in riding that four-year cycle perpetually. The goal isn’t to avoid paying top dollar for a quarterback. It’s to find one worth paying.