Q&A: Can the Chiefs afford to pay Jamaal Charles and Justin Houston this year?
07/23/2014 12:17 AM
07/23/2014 12:57 AM
The Chiefs’ veterans are supposed to arrive at Missouri Western on Wednesday for the start of another season, so it probably shouldn’t come as a surprise that there’s been no shortage of contract drama over the past day or so.
After weeks of speculation regarding the state of contract negotiations between the Chiefs and quarterback Alex Smith and Justin Houston, concern about whether star running back Jamaal Charles will show up to camp bubbled over Tuesday.
You can check out our story about it here, but basically the Chiefs have discussed a new deal with Charles and expect him to show up Wednesday, regardless of whether anything gets done.
It remains to be seen if Charles does, in fact, hold out. But given the Chiefs’ well-noted money issues over the past year or so, the situation has led to a number of questions about whether the Chiefs can afford to pay both Charles and Houston, both of whom are criminally underpaid in relation to their value to the team, this year with the $9.4 million they still have under the cap.
So I checked in with salary cap specialist and former agent Joel Corry, whose answer was … yes.
See, Charles has a cap number of $5.2 million this year, which means that if the Chiefs restructured his contract by giving him a healthy signing bonus up front and a small first-year base salary — which is standard practice — they could conceivably keep him at the same $5.2 million cap number this year, which would not cut into the $9.4 million in cap space they currently have (and will need) for a Houston deal.
“Theoretically, you could give him up to a $14.5 million signing bonus and on a three-year extension and he could have the same cap number,” Corry said. “That’s the max you could give him and keep the number the same.”
Corry mentioned that a healthy chunk of the $9.4 million available will be necessary for Houston, and not Smith, because Houston’s cap number is only $1.6 million this season and will rise significantly in the first year of any new deal, specifically if Tamba Hali’s five-year, $56 million deal is regarded as a starting point (and it is).
Smith is seeking a new deal as well, but he already has a cap number of $7.5 million this season so the Chiefs could, like Charles, conceivably give him a large signing bonus and a small first-year base salary and not eat into their remaining cap space this year.
Corry, however, noted that the problem with paying Charles, 27, and/or Smith, 30, before the season is that the bill is going to come due via large cap hits as soon as 2015.
“That’s the problem for Charles, he’s a tough guy to value because of the position and you don’t know how he’s going to perform in a few years,” said Corry, who added that the days of running backs getting big money are over.
“If you ask for Adrian Peterson money, you’re going to be waiting a long time because no one is getting that anymore. That’s an outlier.”
The 29-year-old Peterson, by the way, signed a seven-year, $100 million contract in 2011. And for what it’s worth, while Charles had far more yards from scrimmage (1,980) and touchdowns (19) than Peterson did last season (1,437 and 11), he is only due to receive $3.9 million in cash this year, and that’s if — if — he reports to camp on time.
According to Corry, in addition to a base salary of $2.6 million, Charles was also scheduled to earn a workout bonus of $250,000 for participating in organized team activities (which he should have earned) and, more importantly, a $1 million bonus for reporting to training camp on time, i.e. Wednesday.
“It would be hard for him to earn that thing if he’s not showing up on time,” Corry said. “So if he thinks he’s that underpaid and he’s willing to bypass that million-dollar bonus, he’s probably gonna dig in his heels for a while.
“There’s leverage for him from the standpoint that he’s the player on offense they can least afford to lose.”
On the other hand, Corry said, Charles has two more years on his contract and plays a position that has been devalued.
In the end, Corry said neither side has a leverage advantage, so the decision to hold out will ultimately be in Charles’ hands.
“It’s basically depends on how unhappy he is,” Corry said. “If he’s a guy that feels he’s been getting short end of the stick for a couple years and looks at it like ‘I have to take a stand now because I’m a running back,’ he could dig in his heels.”
But given the history of Chiefs coach Andy Reid from his Philadelphia days, Corry is not entirely sure a holdout will be fruitful.
“Andy comes from Philadelphia, and for the most part, you didn’t want to hold out with them because you weren’t getting every far,” Corry said. “Duce Staley held out and got nothing. You saw what happened with Terrell Owens, (same thing). They were one of the few teams that have ever pulled an unsigned franchise-tag designation to a player — they did it to Jeremiah Trotter and Corey Simon.
“If Andy Reid is bringing the Philly philosophy, this could get really interesting.”