Rams Bench Nick Foles and Look at his Contract

Rams Bench Nick Foles and Look at his Contract
Posted on November 17, 2015 by Jason Fitzgerald

Almost three months to the date of signing quarterback Nick Foles to a two year contract extension that contained over $13 million guaranteed the Rams have pulled the plug after a sluggish start in which he is completing less than 57% of his passes and has made critical mistakes to help put the Rams at 4-5 despite a strong defense and running game. There have been a few conflicting opinions on the guarantees in his contract, but Field Yates had the same info I had on the contract so I am working under the assumption that this info is accurate as I look at what may lie ahead for the Rams with Foles.

Foles carries a moderate $8.75 million cap charge next year of which $7.75 million will be paid in cash. Most of that salary is already fully guaranteed. Foles will earn a $6 million roster bonus next March regardless of whether or not he is on the Rams roster. The roster bonus is already fully guaranteed and contains no offsets meaning if released he collects that money plus whatever other money he earns from another team if released. So in terms of releasing Foles that bonus is a sunk cost. His $1.75 million base salary is currently guaranteed for injury only and becomes fully guaranteed on the 5th day of the league year. That salary does contain offsets so the Rams don’t really have to rush to make a decision on Foles because of that guarantee since the salary is low.

The reason the guarantees contain no offset is because the Rams opted to not use a big signing bonus when they signed Foles to an extension. The impact is virtually the same either way on the salary cap if released, but the fact that it hasnt been paid yet and Foles has been benched makes it look much worse than it really is. Generally when teams operate on more of a cash basis than cap basis (essentially reducing or not using signing bonuses) to make a player whole in a contract negotiation guaranteed salaries with no offset clauses have to be used to get the player to sign the contract on the terms the team desires.

If the Rams have decided that getting Foles off the roster is needed then they have a few options to try to avoid the $6 million roster bonus. One way is to release Foles in the next week or two hoping a QB hungry team is willing to claim his contract. At this point in the season all players, including veterans, are subject to waivers so a QB thin team that may see themselves as a contender would be willing to pick up his salary for this year (which is only a few hundred thousand left to pay) and next.

The risk in this strategy is if he goes unclaimed the $6 million guarantee from next year immeditely accelerates onto the Rams salary cap. The Rams do not currently have the cap space to do that, so they would need to modify another contract on the team to create anther $3-4 million in space to make it work.

The Rams could simply hold on to Foles through the offseason and attempt to trade him prior to the date his roster bonus is paid, which is the 3rd day of the League Year. While I dont believe a team would pick up the full roster bonus the Rams would simply restructure the contract to probably eat between $3 and $4 million of the bonus to facilitate the trade. That would put Foles salary in line with his market value and its better to eat $4 million than $6 million for a player you do not want.

All things considered his salary is not incredibly high and slots much closer to “open competition starter”(think Brian Hoyer) than low level starter (think Andy Dalton) on the contract scale. This is where annual values of contracts can be misleading. Because Foles contract was so low prior to the extension, the Rams virtually split up the first years “new money” salary in two equal parts across two seasons. So for a team acquiring him (or even for the Rams) we are really looking at a contract worth around $8 million, not $12 million.

Given his salary is not high I dont think it is a given the Rams move him unless they just see no purpose in having him on the roster. The cost of a reasonable backup quarterback would likely cost the team $2-3 million and the cost of a higher level backup/open competition starter is around $5 million. If they were to release him their spend at the QB position would be anywhere from $8 million to $11 million in cash and likely more on the cap if they brought in a replacement who likely would be no better or worse than Foles.

The contract will come under a lot of scrutiny because Foles went from earning $1.54 million to nearly $14 million without taking a snap for the Rams. As I said when the contract was signed this was the risk of the contract, but if Foles had a pulse there was a reward for the Rams in the relative low cost of the contract. They could have made things much more complicated by signing a long term contract such as the 49ers did with Colin Kaepernick. It was a proactive approach to a position that does not look like it will pay off.

http://overthecap.com/rams-bench-nick-foles-and-look-at-his-contract/

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Thoughts on Rams $24.5 Million Extension with Nick Foles
Posted on August 12, 2015 by Jason Fitzgerald

Late last week the Rams announced that they had extended the contract of quarterback Nick Foles and today we finally have more details on the contract. Per Jason La Canfora, Foles will get a bump in salary to about $6 million this year and contains nearly $14 million in guaranteed salaries plus additional incentives. Foles’ contract can potentially void in 2017 based on playing time and his and/or the team’s performance. With an average annual value of just $12.25 million per year, the Rams have carved out a nice little niche in the QB market in which they will have a potential bargain at the position over a two year period without the added risk of monster contract for an unknown player while Foles will maintain his earning potential if he builds on his career. So let’s examine the ways in which this contract works for both sides.

Doing any kind of contract for a player like Foles I think is difficult. Foles has a relatively small sample size to draw from with just 24 starts in three seasons and under 900 total pass attempts. He also plays at the most expensive position in the NFL and at times all it takes is one good season to reach the upper echelon contract level. So to get a deal done now really requires a bit of give and take on both sides.

Foles had three outcomes that could have come from this season. One is the flame out in which he struggles to play well outside the Eagles offense and the spin will need to begin from his side about the negatives of playing with the Rams. At that point his upside value is likely in the ballpark of a Brian Hoyer type at just over $5 million a season. The second outcome is that he does well enough to keep next season but there are still questions which would lead to a franchise tag which would probably pay him in the realm of $20 million for one year. Finally having a good season on a very good team would likely result in the Andy Dalton or Colin Kaepernick style contract with upside escalators and a value between $16 and $18 million and a $24-25 million payout next season.

The current contract more or less splits the first two options with the base value of over $12 million with both sides taking on some of the risk. If Foles fails then the Rams end up paying a $5 million QB, $12.25 million. If he plays well there is a good chance that Foles loses out on the $8 million he would have received on the franchise tag. I don’t worry about the third year of the deal because odds are it will likely void or be removed from the contract entirely.

The Rams, in my opinion, made two concessions in the deal, both mainly related to upside value. These were probably needed in order to get Foles to give up the chance of an extension following the season. The Rams inluded $9 million in incentives over the first two years of the contract. If earned those would allow Foles to essentially earn what he would get on the franchise tag. The second is that the team put in what looks to be a relatively easily reachable void year in 2017 that allows Foles to hit free agency if he was great in 2015 and 2016. Basiclally the contract works nearly identical to the franchise tag.

By avoiding the long term contract the Rams avoid the big outlay of cash up front on the contract. Even if they accepted him as a Dalton type player that would have required cash payments this year in the ballpark of $16 million rather than $6 million this year and $25 million over these next two years, rather than $13 million and change. Even if the incentives are reached that provides a discount on that value and allows the team to hold off on $4.5 million in payments until the end of each season

By taking advantage of the very low cap charges Foles had this season as part of his rookie contract the Rams will mitigate the cap charges over these first two seasons. In 2016 he will likely have a cap charge of just $8.075 million and $12.5 million if he hits all his incentives. The Rams mainly used roster bonuses and base guarantees to fund the contract, which contains about $13.8 million guaranteed. The guarantee is basically one years salary plus his original $1.52 million salary.

The team only used $3 million in signing bonus money, which will leave them little to account for on their cap if his contract does void, is terminated or modified in 2017. That also reduces the leverage he could have in looking for a new deal in 2017 and is much more team friendly than say the Matt Stafford or Carson Palmer type of contract with huge prorated bonuses putting the teams in a negative position. On a longer term deal this would have been difficult to avoid.

I think this is important for the Rams who have just commited large sums of money to a player in Sam Bradford who was rarely healthy and not very effective when he was healthy. Teams need to be aware of players like a Kevin Kolb or Derek Anderson who landed nice size longer term deals off small samples and left teams in the same position the Rams were in for years with Bradford where it becomes difficult to justify moving on. Long term that can put a team in a difficult spot and any longer term deal here probably would have put the Rams in the same spot. Now they get a moderate cost two year audition for a long term job.

I don’t consider the lack of a long term deal a negative for the Rams by any stretch the way some might if Foles plays incredibly well. The fact that Russell Wilson failed, off two Super Bowl appearances, to advance the QB market makes me pretty certain that it will not dramatically change over the next two seasons. While Andrew Luck will set the market, the fact is he is the only young player capable of doing that. The Ryan Tannehill’s of the world will still be playing at $19 million a season. All the Rams did was delay what would likely be the same complete contract by a year or two. That works out as a benefit to the Rams.

So in the end both sides take on some risk and should both be happy with the deal. Here is how I believe the contract shakes out over the next three seasons:

http://overthecap.com/thoughts-on-rams-24-5-million-extension-with-nick-foles/