In 1996, then Federal Reserve Board Chairman Alan Greenspan warned of “irrational exuberance” in financial markets. Simply put, this term describes how overvalued assets can distort the economy.
If Greenspan was asked to comment on NFL free agency in 2013, he would notice a similar exuberance in many of the agreements concluded over the last few days. What better description to be used for some of the contracts awarded since the start of the signing period on March 12?
The fortunate recipients of these lapses in good judgment are led by WR Mike Wallace and his 5-year, $60 million windfall from the Miami Dolphins. He could be worth every penny if the player from 2010-11 suits up for the 'Phins. If he turns out to be the one who admitted to poor concentration in his 2012 contract year with the Pittsburgh Steelers, he will be on his way to becoming the “Randy Moss” of this new generation of receivers.
Wallace has plenty of friends living in the land of exorbitant compensation. Nothing can exceed the renown that accompanies a Super Bowl win. How else to explain SB XLVII MVP Joe Flacco of the Baltimore Ravens being transformed from a middle-of-the-road quarterback into the highest-paid player in football?
At least Flacco had five years as a starter and nine playoff wins to his credit. His former Ravens teammates Paul Kruger and Dannell Ellerbe parlayed a combined 20 starts in their careers into deals of $41 million and $34.75 million, respectively. What they say about life is true after all: timing is everything.
Does this irrational exuberance also extend to the fans? If so, then thousands of Denver Broncos followers must be running to Priceline to book their trips to Super Bowl XLVIII.
The Broncos franchised their highly rated LT Ryan Clady and re-signed starting DT Kevin Vickerson. They still had enough cap space to land RG Louis Vasquez, CB Dominique Rodgers-Cromartie, DT Terrance Knighton and the best slot receiver available in Wes Welker.
Not everything went according to plan. DE Elvis Dumervil was set to return to the team, but an 11th-hour error resulted in a missed filing deadline. Dumervil had to be cut, yet the upside for Denver is his release now frees up over $8 million in cap room.
Before anyone gets a mile high as a result of all these events, consider some recent history. The last Super bowl winner to sign an impact starter as an unrestricted free agent was the 2009 New Orleans Saints.
The player was Darren Sharper. Anyone who remembers that season will recall his nine interceptions and the three he returned for scores. To find a similar situation, you have to go all the way back to the 2003 New England Patriots and their acquisition of Rodney Harrison.
Harrison did not compile the stats of Sharper, but did solidify a secondary that went from mediocre to the top pass defense in the NFL. Only finding two such players in 10 seasons illustrates that winning teams are not built overnight.
Those seeking further confirmation should check out the Washington Redskins during the reign of owner Daniel Snyder. Does Albert Haynesworth, the worst free-agent signing of the last decade, ring any bells?
The converse of irrational exuberance might be called “understandable disappointment.” The leader in the clubhouse is the Houston Texans, who have lost three starters in SS Glover Quin, OLB Connor Barwin and FB James Casey. The Texans have yet to corral any players to offset these losses, their courting of aging FS Ed Reed from the Baltimore Ravens notwithstanding.
There may be a strategy behind all this inactivity from organizations such as Houston, the Dallas Cowboys and Green Bay Packers. Each has signed but a single player, none of which can be considered significant.
The management of these teams may be waiting for all the free-spending suckers to blow their wads. This would convince all the talent still out there the big money has dried up. Then they could be signed for something more befitting reality.
Top-flight UFAs still on the market range from offensive tackles Jake Long and Andre Smith, defensive ends Dwight Freeney and John Abraham, and cornerbacks Nnamdi Asomugha and Aqib Talib. Clubs will continue to overpay if they believe all that stands between them and the promised land is the right man at the right position.
Whatever player movement occurs between now and the final cutdown to the 53-man roster, let the buyer beware. Better put, it would read like the disclaimer in every investment prospectus: “Past performance is not indicative of future results.”
All salary details are courtesy of Spotrac.com.