A Quick look at the Percy Harvin Trade, a Few Coaching hire Decisions, and Some Analysis on the New York Jets Excess Salary Cap Space and Rollover

Several days ago, this blog published a piece entitled “Why the Percy Harvin Trade May have been Good for the Jets and Seahawks,” that also contended that the trade may have been extremely good for the Jets.

It’s premature, but so far at least, Harvin is genuinely embracing, and seems embraced by the team. If this continues, it bodes extremely well for the acquisitionm given the team’s pressing needs along with Harvin’s near remarkable abilities.

One of the reasons this blog was started is because it is the opinion here that being a General Manager for an NFL football team requires a unique skill set of broad logical strategic integration and judgment across a broad range of various parameters – many of which are under appreciated, and often not exhibited. .

In part this has to do with properly assessing team impact, cohesion and improvement per salary cap dollar and how such impact is best maximized; general player acquisition, and objective assessment of true capability and performance likelihood without being misled or beguiled by stats – or underestimating how critical the team component to most individual performance measures are – and thus how to properly evaluate, measure, and assess; and, in particular, many types of decisions relating to the NFL draft – the ultimate core of building a football team.

(Occasionally a point related to the draft will be covered in this blog. But many won’t be: The assessment of draft pick value, trades, and other draft related moves may represent the area for greatest team improvement for almost all teams in the NFL; and at least one team, with specific inside knowledge, should be benefiting from the great room for improvement in this area. And it won’t remain fully inside knowledge if it’s all published in advance. But plenty of interesting things will be.)

A piece last week examined the exchange of 3 year first time head coach Mike Munchak for former Arizona Cardinals head coach Ken Whisenhunt this past year – where the Tennessee Titans may have overestimated the differential between the two head coaches based upon information available at the time of the decision.  \

The Titans move may or may not have been a “mistake”: but in comparison to either providing Munchak another year to see what he was possibly building, or replace him with a different candidate, it was somewhat questionable.

A similar example was the retention of the Oakland Raiders Dennis Allen after last season given the actual performance and direction of the team under the two year first time head coach.

Excuses about being “saddled” with massive contracts, “dead” and “excessive” money (players that are no longer with the team but count against the cap, and players being over paid relative to actual team worth, but who will result in dead money if cut or released) were perhaps sufficiently secondary to the evaluation of Allen given that these are still NFL players capable of playing, several teams were below the salary cap and still competed, and given how the team actually played under Allen as well as, if secondarily, his explication and somewhat pollyannaish (as opposed to simply optimistic and positive) expressions on the matter.

Yet keeping Allen was followed by releasing him just four games into this season. Which on its own was probably a good move; but the point is that the games this season were not needed for the move. But the Raiders had not yet realized this, and harmed their season as a result.

In the piece linked at the outset on the Percy Harvin trade, the Titans coaching change assessment piece was linked to and referenced, and a generalized critique of NFL GM decisions and evaluations suggested. This was used as support for the idea that the Jets also probably erred by leaving themselves excessive salary cap space this year, with the strong hint that it may not have been optimally thought through:

Fourth, in kind of a bizarre move for a team that really needed better players (but then I believe there is significant room for improvement in the strategic thinking of many NFL General Managers), the Jets also had plenty of excess salary cap space they had been saving – over $20 million.

Bill Barnwell of Grantland, who writes prolifically on football ideas – if on occassion scathingly – in this piece offers a strong rebuttal to the idea that retaining so much salary cap space was ill thought out.  And while I disagree with some of the piece, it is worth considering, as he makes several good points.

By far the most important is the fact that unused salary cap space can be rolled over to the following year – that is, added to the next year’s total available cap space. Aside from the actual dollar savings realized from simply spending less than the cap allows, this rollover prevents the lack of salary cap use from otherwise being a complete waste in any given season in terms of making a team as good as it can be. But while there are a few advantages of rolling over cap space, there are significant disadvantages as well. Particularly when it is a large amount being rolled over.

While leaving some funds for mid season pick ups is sensible, most midseason pick ups involve solid players, often later in careers, filling a position of evolved need. They don’t normally involve players of Harvin’s caliber, and salary. (Although earlier season acquisitions may.) But even with this rather large unexpected amount – $6.47 million, reflecting the remainder of Harvin’s salary for this year, and which will be charged against the Jets cap for this year – the Jets will still roll nearly another $18 million extra in cap space over to next.

In a related but also very informative piece, Barnwell also seems to suggest that Harvin having a big altercation with one of his teammates (Golden Tate, now in Detroit) is a little “suspicious” sounding, seems to question whether Harvin was really that problematic to the team in the Seahawks view, and that lauding the Seahawks for “cutting their losses” might be hypocritical when teams with much poorer records are lambasted for cutting mid round draft picks, for example.

It seems likely that in part the Seahawks weren’t able to use Harvin in the manner they had anticipated; and, although just a guess, they were particularly unsettled (as has been suggested by others) by Harvin’s propensity to simply take himself out of games in apparent frustration – as he did in the loss to Dallas in the week before the trade. But it seems simple speculation to conclude there was no significant altercation just because the Seahawks would have had difficulty keeping it quite, or Tate difficulty hiding a bruise near his eye.

Regarding the Seahawks’ trade of Harvin, the point is well taken that the Seattle team has not received much criticism for the move, even though they traded him for much less than they initially gave up. But it’s not necessarily hypocritical.

This is in large part because criticism of even followup moves of teams that seem to be replete with moves that don’t work out often implicitly refer to the original move as well.

In the Seahawks case –  a team that continually improved, absolutely crushed opponents at the end of the 2012 season and probably came within seconds of making it to the NFC Championship game that year, then went 13-3 the following year and crushed a record setting Peyton Manning led Denver Broncos team in the Super Bowl -the issue of a history of recent mistakes is far less relevant.

A team that continues to flounder may have its “mistake acknowledgement” moves – such as the cutting of mid round draft picks that Barnwell points out – a bit more heavily scrutinized: Was it an awful original mistake; is the team compounding it now by how they are handling it now? OR are they otherwise making a mistake now by cutting ties or, by the manner in which they are doing so?

All are legitimate questions regarding the Seahawks move. As the Jets picked up Harvin with essentially only six and a half million or so in guaranteed money, while the Seahawks had to guarantee essentially close to 24 or so million (all of which, but for the remaining six and a half, they’ve already paid). And for a 6th,  or 4th round draft pick next spring conditional, according to Jason La Canfora, on whether Harvin stays with the Jets beyond this season. (La Canfora is currently with CBS, and formerly of the NFL network and Washington Post, and is usually pretty accurate with his reporting.)

In contrast, and much more notably, the Seahawks gave up a 1st and 7th round pick the same spring of the trade (2013) and a 4th round pick for following spring (2014). While the Jets have more relevant negative knowledge than Seattle did – i.e., two separate teams have now willingly traded Harvin away based upon ostensible team cohesion and compatibility issues, and one was willing to take a large loss – this draft pick differential, on top of the salary savings, is an enormous difference.

So questioning the Seahawk’s original move, either by directly calling it out, or now criticizing their move to suddenly dump Harvin, is reasoned.

However, given the Seahawks recent track record of success, along with the pretty clear if implicit acknowledgement that they made what they probably believe to have been a mistake and are now addressing it, heavily questioning the team for the mistake (then, now, or both) seems less relevant than perhaps questioning the early or unexpected release of players by other teams with consistently poor records and a series of what more popularly (right or wrong) appear to be sub par moves.

In regard to defending the Jets salary cap moves, again, Barnwell does make a good point.  Unused cap money can be rolled to the following year.  And he may be right in arguing that the Jets were sound in doing this.

Yet unless the expenditures are simply forced by over-payment or unwarranted acquisitions per dollar spent – I still believe that a full $24 million in unused cap space, generally, is usually less productive than not – aka, a “bad” move. And more so in the Jets case.

In part this is for the same reasons that teams, even overdoing it, give up far higher future draft choices (say for the following season or two), just to get what is a lower, and thus”less valuable” draft pick, but one that is this year.  That is, the future is discounted, and the present is more valuable. (Teams even often overdo this – even sometimes simply because decision makers may be on the proverbial “hot seat,” but if it’s against the teams’ interests, it’s stil against the hot seater’s long term interests with the team as well, so maninly it’s an evaluatio decision, or mistake.)

Barnwell also cites what is essentially the opposite idea – the “opportunity” cost of not saving the funds. But in reality this is a “flexibility cost.” There is less opportunity for the following season if the funds are currently spent and not “rolled over.” But in terms of opportunity cost – since future value is discounted – more opportunity cost is lost in the season the money is not utilized. (In theory; as again circumstances can arise, at least with some amount of salary space, where that opportunity cost is lowered by a unique combination of team needs or lack thereof, the lack of relevant player availability or trade opportunity, and excessive over valuation by other teams, and thus cost to acquire – relative to other seasons – of players available on the market.)

But what is probably the real underlying point is still well taken, and important. The value of flexibility, and ability to maximize the following year if opportunity does come along, is genuine. But the best approach to maximizing salary cap usage likely combines both high usage and flexibility, depending upon that team’s current needs, its projected growth and later needs (and salary growth), and who is available and at what cost relative to that team’s needs.

Of course – though this takes a special skill in terms of logical mathematical strategic analysis integrated on top of player assessment and specific upside and downside risk range – there are ways to maximize flexibility while simultaneously building a stronger roster.

All that being said, free agents are often overpaid – since up to 32 teams (including the original one) can vie for them. And if there simply wasn’t free agent value relative to the effective price necessary to acquire them, then saving some cap money, even though there is some loss in real value by rolling it over into “the future,” isn’t necessarily a bad move. Thus a definitive assessment probably can’t be arrived at without knowing exactly what the Jets faced in terms of dollar numbers; and we’ll see what they do this offseason.

But pending how they handle it, in theory at least I disagree somewhat with Barnwell here: $24 million is a very large amount to “save,” in combination with what seems to be a less than stellar roster. And there should be a way to creatively use some of those funds to strengthen the team both currently (when it definitely needed it) and longer term, while retaining some for rollover in anticipation of far more opportunity and perhaps re signing need the following season.

Additionally, the retention of such a high amount of extra space might also easily lead to over pricing – and thus over paying – a subsequent year desired acquisition or acquisitions (or even renegotiation or retention of players already on the roster).

Such “over paying” makes little rational sense but is common.

Consider for example that when teams acquire an extra draft pick or two through a trade, they (and even many analysts), often treat that pick as a “extra” – as kind of a “bonus.” And as a result, they sometimes trade it away to get a desired draft choice far more aggressively than perhaps the true worth of that pick being traded away should suggest.

But since it is a “bonus,” teams and others will often suggest how, “it was an extra pick we had gotten so it really didn’t much cost us”: even though the value of that pick is exactly the same as any other pick of that number would be for that round – regardless of how a team acquired it. And it did cost the team that actual value, not less just because it was an “extra” pick, even though this seems to often go unrecognized.

(Or at least acknowledged – though teams often, again, trade away the pick as if it had a little less real value to them. Also, technically, if a team has a monster number of high draft picks, the value of each additional one would be slightly denigrated, simply because the team’s needs lessen as it becomes increasingly superior to all of the other teams in the league and has so many incredibly good rookies it won’t be able to keep or use them all even for the sake of long term building and cost value maximization. This wouldn’t happen in reality unless a team is already near dominant, and wound up with an absolutely excessive number of high round draft picks anyway. Watch out for that team by the way, if it ever happens.)

It might seem easier to avoid making this same mistake with money, rather than draft picks, since money is so measurable, and a constant we’re  used to valuing. But think of an extra $20.00 (or $100.00) that you find. We all tend to treat that $20.00 a little different, since we didn’t “expect” it.

While every dollar is worth a dollar, regardless, this still might make some rational sense for small scale budgeting, as well as realizing some of the mild “excitement” of the unexpected or “gift,” funds. (And for large dollar amounts, in a more conceptual sense every dollar is not the same – hence the theory of diminishing marginal utility or value for both excess dollars, or material goods – which as a side note we never seem to integrate into our presumptions of positive health protecting societal or environmental change when making massive assumptions about macroeconomic growth and future “value.”)

But in a sheer salary cap situation, every dollar has relevant value which is not diminished merely because it has been rolled over, particularly since salary caps put a natural limiting constraint (which many teams normally reach) upon valuation, and keep all dollars essentially equal in both real and conceptual terms.

Simplified, having a lot “extra” for high salaries does’t diminish the potential of those cap dollars in terms of maximum team building utilization.  But to some extent, as with both extra draft picks, as well as simply finding or “having” a little more money, the same phenomenon nevertheless often naturally applies, particularly in the NFL.  For example the idea that, “well, it might have been a little much to pay, but we had plenty of money” – even if somewhat subconscious, is commonplace, and sometimes pronounced.

Common or not, it is never rational in NFL team building. This is because in terms of the salary side of player acquisition, it is always about value acquired per dollar spent. Value both in terms of the player’s ability, and their exact fit with your team’s needs:

For example, adding a fantastic center to a team okay at the position and powerful on the offensive line is not as valuable as adding that same fantastic center to a team extremely weak at the position, and weaker on the offensive line in general) per dollar spent, since the shift in improvement, in terms of line play (a little) and Center position play (a lot) will be greater for the latter, weaker team.

Although in the latter case, if the opportunity is there or can be created, that same team is also better served than the stronger team to forego the fantastic center, and instead, get a good one, and simultaneously upgrade the other weakest links on the line – thereby bringing the greatest net level of improvement to the team’s overall capability, per dollar spent.

Solid players can often represent a large upgrade from struggling ones in terms of total team impact on the field; yet the differential in salary may not always be as great as the differential in salary from a solid to a great player. (This is important across the board, but perhaps particularly on the offensive line, where the five traditional players typically act as more of key unit – with a weaker link or two harming the entire unit a little more than a weak leak elsewhere on the team.)

And if anything, the room for improvement per dollar, when the dollars are also of maximum value for the Jets if used because they are not being discounted by sitting under utilized into the future, may have been higher for the Jets this season since the team seemed to have positional weaknesses. (If in fact that’s not the case, because the Jets are going to be poorer next year, then that’s an even worse team building strategy, since it is reliant up a reduction in quality from a level that instead needs to go up.)

That may or may not be a minor point, but is part of why a team with so many needs may not be best suited to simply sit on a lot of cap cash.  But it’s also not a stretch to say that the Jets also either face the risk of over extending in some contract negotiations, simply because they “have the ‘extra’ cash” (even though – the point of the above analysis – it is really not extra but as significant as any other cap money, particularly when not used the year before), or, not using a lot of the money next year either.

And if the team doesn’t use their cap space next year, and thus at least a significant portion of the rolled over funds, that is additionally wasteful.  That is, by continuously rolling over significant amounts, all the team is doing is further discounting (wasting) the actual value of that cap space.

In other words, as a workable if not perfect analogy, if $20 million is rolled over for 3 years, it would like trading the 22nd pick in the draft this year for the 22nd pick in the draft 3 years from now. (Although with multiple players, not just the one pick.)

The main point here is that for multiple reasons, $24 million is a lot of money to have sitting there unused. And it is even more so, and far more questionable, in combination with the fact that the Jets personnel entering this season, as with last season, seemed to have had significant room for improvement relative to many other teams in the league.

And the Jets, perhaps in part as a result, have not done as well as they should be doing under a good head coach. (Though it’s easy to shift gears and blame the coach – as some fans very angrily do. But given Ryan’s history with the teams he has actually had, this seems less warranted.)

Bottom line: It could work out well if a swarm of well priced key players become available next year, and the Jets smartly spend and build long term with the extra funds, while retaining a little extra for flexibility and creating little future cap pressures through smart salaries.

But in terms of opportunity cost, barring a unique situation where despite the Jets needs there was somehow simply nothing that fit (which would likely indicate questionable planning from the year before) hoarding cap money for a team that is not well laden with across the board talent is not exactly like the far seeing squirrel putting away acorns for the winter.

It can work out fortuitously, but it’s otherwise not necessarily like that when it comes to maximum team building and salary cap utilization.

 

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5 thoughts on “A Quick look at the Percy Harvin Trade, a Few Coaching hire Decisions, and Some Analysis on the New York Jets Excess Salary Cap Space and Rollover

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