Houston Texans Contracts: J.J. Watt Mock Contract Negotiation

As many of you know, the Texans have exercised their fifth year option on J.J. Watt and have him under club control through the 2015 season at a cap hit of $3.75 million in 2014 and $6.96 million in 2015. We also all know how seconds quickly turn into minutes, that turn into hours, which turn into days, that become weeks, which snowball into months, and transform into years. The Texans are two years away from Watt hitting free agency, but that time is approaching quickly and the Texans will look to lock him up before it reaches that point. At the moment, Rick Smith is still the general manager of the Texans and if there is one thing he hates, it's having his top players enter a contract year before receiving a new extension.

Brian Cushing signed a six-year, $55.643 million ($21 mil guaranteed) on 9/3/13 with one year left on his deal and the season began 9/9/13.

Matt Schaub signed a four-year, $62 million ($24.75 mil guaranteed) contract on 9/10/12 with one year left on his deal and the season began 9/9/12.

Duane Brown signed a six-year, $53.4 million ($22.08 mil guaranteed) contract on 8/6/12 with one year left on his deal and the season began 9/9/12

Arian Foster signed a five-year, $43.5 million ($20.75 mil guaranteed) contract on 3/7/12 as an restricted free agent. Foster's situation is different because the Texans wanted the undrafted free agent to prove himself once more before giving him the keys to the vault.

J.J. Watt is going to get all the money, and it is going to happen sooner rather than later. At 25 years old, he is already the best non-quarterback in football and a future Hall of Famer, barring a cataclysmic injury or positive PED test that would rip the universe in half.

The ex-agent and former New York Jets official of National Football Post have recently played house and gave us a glimpse into how a potential J.J. Watt contract negotiation would go.

The rules: Former NFL agent Joel Corry will play the agent and former New York Jets Director of Football Administration, Ari Bissim, will play the role of the Houston Texans. Enter stage right, dim the lights, and action.

CLUB (Ari): Thank you for meeting with us today to discuss J.J. Watt. As you know, we hold J.J. in high regard. We wanted to sit down to speak about extending his contract because J.J. is exactly the type of player, both on and off the field, who embodies the qualities of the Texans organization. From an organizational standpoint, he is someone we want to represent the organization for a long time and be part of bringing a championship to Houston. As winning is the ultimate goal of both J.J. and the Club, we want to work with you to create a win-win solution that will allow us to continually build a competitive team around Watt. So our first question is this: What is important to J.J. when considering an extension that will allow the team to remain competitive?

AGENT (Joel): We appreciate the organization’s interest in signing J.J. to a new deal. He is happy in Houston and would like to spend his entire career with one team. That being said, J.J. has done some things that are unprecedented over the last two years, particularly while primarily playing as a 3-4 defensive end. He has established himself as not only the NFL’s top defensive player, but the best non-quarterback in the game and should be paid accordingly in 2014 and beyond.

CLUB (Ari): We do not disagree that J.J. is a talented defensive player and someone that shows that hard work truly does pay off. However, as you know, he is currently under contract for 2014 at roughly $1.9 million and we have exercised the option year for 2015 which is $6.969 million for a total of $8.876 million for the next two years. Thus, by doing an extension this early, the Club has to receive credit for the years remaining as well as alleviating the financial risk of injury from the player by receiving a deal two years before his current contract is finished. J.J. is a player we have a great deal of respect for, but we cannot consider any one individual above the entirety of the organization; so any deal would have to consider the impact in allowing us to be a consistent Super Bowl contender which is something we know J.J. understands and appreciates. With that in mind, please tell me who are some comparable player contracts you have looked at in determining what you believe the appropriate value for J.J.’s contract should be? In addition, do you have any thoughts on the length of the contract?

AGENT (Joel): We understand that the organization controls J.J.’s rights for the next two years at significantly less than his market value. If the salary cap goes up the same as it did this year (8.13%) in each of the next couple of years, which is a conservative estimate, it will be around $145 million in 2015 and $156 in 2016. Any deal must reflect the impact the growth of the cap will have on salaries for top players. It’s in nobody’s interest for J.J. to be in the same situation Andre Johnson was in after he signed his six-year extension in 2007. He quickly became unhappy with his deal because the wide receiver market changed. The organization addressed the inequity three years later in 2010.

We understand that the organization controls J.J.’s rights for the next two years at significantly less than his market value. If the salary cap goes up the same as it did this year (8.13%) in each of the next couple of years, which is a conservative estimate, it will be around $145 million in 2015 and $156 in 2016. Any deal must reflect the impact the growth of the cap will have on salaries for top players. It’s in nobody’s interest for J.J. to be in the same situation Andre Johnson was in after he signed his six-year extension in 2007. He quickly became unhappy with his deal because the wide receiver market changed. The organization addressed the inequity three years later in 2010.

Conventional statistics don’t do J.J. justice. Football Outsiders has a metric called "Defeats" that measure turnovers (or tipped passes leading to turnovers), tackles for loss, and tackles or passes defensed on third or fourth down. J.J’s 56 Defeats in 2012 were the most since Football Outsiders started the metric in 1996. According to Pro Football Focus (PFF), J.J. batted an unheard of 15 passes in 2012. Nobody else in the last five years has reached double figures in batted passes.

If I was the club, I would immediately call Johnathan Joseph and Chris Myers in my office, sacrifice them, and then give the surplus cash created by removing Joseph and Myers off the cap and give it to Watt.

In some respects, J.J.’s 2013 campaign was better than his 2012 season when he was the near unanimous NFL Defensive Player of the Year. He had 85 total quarterback pressures (combined sacks, quarterback hurries and quarterback hits) in 2013 according to PFF after posting 76 pressures in 2012. J.J. also graded out better in 2013 than 2012 with PFF. His 111.6 grade was 10 points higher than his 2012 grade of 101.6. The next highest grade for a defensive player in the last two years is Geno Atkins in 2012 at 80. J.J. is the modern day equivalent to Reggie White, but without a contemporary who is a modern day Bruce Smith.

J.J. has transcended his position. His dominance as a defensive lineman is on par with Calvin Johnson’s dominance at wide receiver. As you know, Calvin Johnson signed a 7-year, $113.45 million extension in 2012 with $53.25 million in guarantees. Johnson’s deal is two years old while the salary cap has gone up 10.28% since he signed. The equivalent deal with a $133 million salary averages almost $17.875 million with approximately $58.725 million in guarantees.

I appreciate that the Texans can control J.J.’s rights for up to an additional three years by placing franchise tags on him. The defensive end number increased from $11.175 million to reach $13.116 million this year, a 17.37% increase. With comparable increases until J.J. can be franchised in 2016, his tag number will be almost $18.075 million. A second franchise tag in 2017 with a 20% increase would be $21.69 million. Please note that these two additional years for J.J. could cost the Texans close to $40 million.

We are open to a lengthy extension provided it ensures that J.J. isn’t faced with the same problem Andre Johnson encountered after a couple of years with the value of his extension.

CLUB (ARI): We appreciate your insight into the future of the salary cap and can debate the merits of the league salary cap increasing, however, no one truly knows what those numbers will be until they are set. We believe your metrics accounting for the franchise tag increase are a bit off, as the franchise tag is determined by a percentage of the top-five players for that individual position for that year,by summing the amounts for that for the franchise tag at that position for the last five years and divided by the league salary cap for those years to create a percentage that is multiplied by the league salary cap for that year . For example, to predict the 2016 franchise number assuming the $156M cap number as you suggested, Watt’s franchise number would be roughly $15.6 million. A franchise number of $15.6 million would assume a 10% defensive end franchise percentage which is higher than the percentage has been for a defensive end in any of the past three seasons (typically 8.7%-9.9% of that year’s cap). That being said, we believe focusing on the franchise number will only sidetrack us towards our common goal.

What cannot be debated is the fact that any extension for J.J. would move the injury risk from a financial perspective from his shoulders and place that risk on the Club, something we are willing to do because of our respect for his play and passion for the game. We understand your position in regards to what type of player J.J. is and we would expect nothing less from an intelligent and well prepared agent such as yourself. However, you can appreciate that the deals that reset market places typically are deals that are signed either entering the final contract year or when the player in question completes his contract. Our organization is not interested in resetting the market place for defensive ends two years early. If J.J. is looking for the sums you mentioned, we may be better off waiting until next year to revisit this conversation. However, let us propose the following contract below that will make J.J. one of the top-five highest paid defensive players in the league in new money, while still allowing our organization the ability to put players around him so we can all collectively achieve our goal.

AGENT (Joel): I appreciate the offer. I’ll share it with J.J. and will get back to you shortly.

Follow Joel on Twitter: @corryjoel

Follow Ari on Twitter: @AriNissim

Follow NFP on Twitter: @FootballPost

The link to the article is here for those who are interested.