Analysis

Rookie Quarterback Contracts Create a Competitive Advantage

Justin Herbert

In 2011, the NFL introduced a new rookie wage scale changing the way rookie salaries are constructed. Prior to the CBA in 2011, teams used to allot a certain amount of their salary for draft picks allowing teams to give monstrous salaries to rookies. Now, each draft pick has a mostly predetermined amount based on the NFL salary cap for that year. Rookie salaries typically change from year to year based on the growth of the salary cap. 

Newly drafted players sign four-year contracts with teams having the ability to exercise a fifth-year option for first-round selections. For reference, the first quarterback selected in the 2022 NFL Draft, Kenny Pickett, was drafted by the Pittsburgh Steelers as the 20th pick in the first round. Pickett will have a cap hit of $2,557,801 in his rookie year, and his four-year contract is set to pay out $14,067,905 in total. 

Historically, Teams Have Succeeded With QBs on Rookie Deals

Here is a list of each team to appear in the Super Bowl since the 2011-2012 season. Teams with a quarterback playing on a rookie salary are highlighted:

Year AFC NFC
2012 Patriots Giants
2013 Ravens 49ers
2014 Broncos Seahawks
2015 Patriots Seahawks
2016 Broncos Panthers
2017 Patriots Falcons
2018 Patriots Eagles
2019 Patriots Rams
2020 Chiefs 49ers
2021 Chiefs Buccaneers
2022 Bengals Rams

There is a noticeable advantage to having a quarterback on a rookie deal. In nine of the last 11 Super Bowls, a team with a quarterback on a rookie salary has played in the game. 

Russell Wilson and Patrick Mahomes are two of the notable recent young quarterbacks who paved the way for their respective teams to enjoy dynasties while they played on their rookie contracts. Both the Seahawks and Chiefs brought in elite players at other positions to support their young quarterbacks, which became key to their remarkable success. 

The main takeaway from looking at the history of recent Super Bowl teams is that if you do not have Tom Brady or Peyton Manning, having a quarterback on a rookie deal is the way to go. 

It’s Now the Chargers’ Turn With Justin Herbert

The Los Angeles Chargers have been one of the most active teams during the 2022 offseason. That can be attributed to having Justin Herbert on his rookie deal

When you look at the cap hits of all the quarterbacks in the AFC West, it’s clear the Chargers are benefiting from Herbert’s contract.

How the Chargers Benefit

Herbert’s cap hit in 2022 will be only $7,248,751 (25th among quarterbacks), and it goes up to just $8,456,877 in 2023. 

Why is this an immediate benefit for the Los Angeles Chargers? The Chiefs, Raiders and Broncos have to be more cautious with how they allocate their resources, but the Chargers can continue to be aggressive in acquiring talent to surround Herbert. 

“When you look at the AFC West, Justin Herbert is the only QB on a rookie deal,” said Mike Tannenbaum, former NFL executive and co-founder of The 33rd Team. “This has allowed them (the Chargers) to get J.C. Jackson, Khalil Mack and sign Derwin James to an extension. Currently, it’s a material advantage for them.”

In terms of average annual salary, the Los Angeles Chargers have handed out plenty of big contracts. They have the second-highest paid edge rusher in the league (Joey Bosa), the tenth-highest paid cornerback (Jackson), the highest paid safety (James), and the eleventh and twelfth-highest paid wide receivers (Keenan Allen and Mike Williams). 

It May Be More Complicated Than Just the Quarterback Position

Despite the Chargers’ current quarterback cap hit, that does not mean the other AFC West teams have weak rosters due to spending big at the quarterback position.

I think if you look at the acquisitions made by all the teams in this division both through trades and free agency, it’s actually hard to make the case that Los Angeles could only sign those guys because of a rookie QB contract,” said Joe Banner, former NFL executive and co-found of The 33rd Team. “It’s massively more complex. This actually is more about underspending and underinvesting for years than it is about QB cost. Make a chart of all the key additions this offseason by teams in this division and I think you will see my point.”

Let’s look at the key additions for each team in the AFC West and see what we can take away from how their respective quarterback salaries affect the way that they spent this offseason.

KC LAC DEN LV
WR JuJu Smith-Schuster CB J.C. Jackson QB Russell Wilson (trade) WR Davante Adams (trade)
WR Marquez Valdes-Scantling OLB Khalil Mack (trade) DT D.J. Jones WR Demarcus Robinson
C Austin Reiter TE Gerald Everett EDGE Randy Gregory EDGE Chandler Jones
S Justin Reid DT Sebastian Joseph-Day CB K’Waun Williams CB Anthony Averett
DT Austin Johnson LB Alex Singleton LB Jayon Brown
CB Rock Ya-Sin (trade)
RB Brandon Bolden

How the Other AFC West Teams Built Their Rosters

For Kansas City, Mahomes’ massive 10-year extension will be in full effect in 2022, as his cap hit will be $35,793,381. Mahomes is the highest-paid quarterback in the division, which means the Chiefs have to sacrifice and underspend at other positions to make it work. That is exactly what they have done by bypassing a Tyreek Hill extension. The Chiefs will not have to take on the four-year, $120 million extension Hill received with the Miami Dolphins, and they received draft capital in the process via the trade. 

The Chiefs took on cheaper alternatives by signing JuJu Smith-Schuster and Marquez Valdes-Scantling, along with drafting Skyy Moore (WR, Western Michigan). Additionally, the Chiefs moved on from Tyrann Mathieu and brought in Justin Reid, who is only 25 years old.

As has been discussed, the Chargers are the lone team in this division to benefit from operating with a quarterback still on their rookie deal. Adding Jackson and Mack, along with extending Williams and James is possible because only 4.77% of their cap is allocated to quarterbacks, which ranks 24th in the NFL. 

The Denver Broncos have finally found their successor to Peyton Manning (several years later) in Russell Wilson. The Broncos will pay the 8th-highest percentage of their cap to the quarterback position of any team in 2022, but their underspending at the position in the past has allowed them to build this strong team for Wilson. From 2020-2021, the Broncos ranked 30th and 29th in quarterback spending. So, despite paying up right now for Wilson, the Broncos’ past savings has put them in the position they are in now.

Does everyone remember when Derek Carr once reset the quarterback market? Back in 2017, Carr signed a five-year, $125 million extension, and his average annual salary of $25 million made him the highest-paid quarterback in the league at the time. 

This April, Carr signed another extension with the Raiders, a three-year, $121.5 million deal. Despite this spending on the quarterback position, the Raiders rank 25th in offensive spending and 30th in defensive spending for the 2022 season. This explains why the Raiders could bring in Davante Adams and Chandler Jones, and re-sign Maxx Crosby.

If you do not have a quarterback on a rookie contract, you have to make more thoughtful decisions about who you can afford to sign.

Know You Have Your Guy Before Breaking the Bank

Ultimately, you have to pay up once you identify your franchise quarterback. Just because you have had success with a quarterback on a rookie deal does not mean you let an elite player go at such a premium position. 

“Financially, the investment level for a franchise QB is so high, that you have to gather as much information as possible before you make that decision,” said Tom Lewand, former team president for the Detroit Lions. “Obviously, before then, you have the ability to put higher paid players around the QB, which is also critical to his development.”

The Chargers have surrounded Herbert with as much talent as possible to bring the best out of him. In turn, he has had a historic first two seasons. Herbert ranks first in completions (839), touchdown passes (69) and yards passing (9,350) among quarterbacks in their first two NFL seasons. 

Based on everything we have seen, Herbert looks to be the franchise quarterback for the Los Angeles Chargers. They can enjoy the elite production they are getting from a $7 million quarterback in 2022, however, a very large pay-day is likely in the future plans for the Chargers and Herbert. 

David Brown contributed to this report. 

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