Why a JJ Watt Extension Prior to Season Is Highly Unlikely in Houston

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Why a JJ Watt Extension Prior to Season Is Highly Unlikely in Houston
Bob Levey/Getty Images

It's been a long time coming. Those were my first thoughts on hearing that J.J. Watt finally vocalized to the media his desire to sign a new contract with the Houston Texans

Watt told Houston media, including John McClain, that he'd outplayed his contract. 

Watt actually first outplayed his rookie contract in 2012, the year he burst on to the scene as the most uniquely disruptive defensive lineman in the NFL. He obliterated the record for Defeats, which is a Football Outsiders stat that counts tackles for a loss, tackles that prevent a third- or fourth-down conversion, turnovers, or tipped passes that lead to turnovers or prevent a third- or fourth-down conversion.

Regression was never going to let a season like that happen again, but Watt continued to be one of the best players in the NFL. According to Football Outsiders Almanac 2014, he finished in the top five in Defeats, hurries and tipped passes. He also led the league in quarterback hits (sacks plus knockdowns)...by 15.

Watt did this all while playing 3-4 defensive end or being an interior rusher on passing downs and finished highly in all these categories despite playing for a 2-14 team that was only rarely in a "pin your ears back" situation where they were protecting a lead. 

Depending on how much you value a shutdown cornerback's ability to cover one receiver all on his own, Watt is either the best defensive player in the NFL, or up there with Richard Sherman, Patrick Peterson, and Darrelle Revis. He's certainly the most unique defensive player in the NFL—a player that teams have to game-plan for. 

J.J. Watt's Advanced Statistical Rankings, 2012-2013
Year Defeats (Rk) Hurries (Rk) Tipped Passes (Rk) QB Hits (Rk)
2012 56 (1) 29.5 (5) 18 (1) 25 (1)
2013 35 (3) 38.5 (4) 7 (3) 36 (1)

Football Outsiders

Because 2011 draft picks were barred from signing extensions prior to their fourth season—an NFL collective bargaining agreement change that has kept draft picks super cheap—this hasn't been an issue for Houston until now. But, according to Charles Robinson of Yahoo Sports, the two sides reportedly aren't close to a deal just yet. Let's break down where each side is coming from.

 

Houston's side

The Texans come into the year with a little over $7 million in cap space, per Over The Cap, which is more than enough to absorb the typical contract extension structure: The player gets a humongous bonus in lieu of a big base salary in the first season, and his cap number stays relatively low for that first season.

Houston's Cap Space (Projected)
Year Top-51 Salaries Projected Cap Room
2014 ~$125 million ~$7 million
2015 ~$116 million ~$23 million
2016 ~$70 million ~$79 million

Over The Cap

There are two things gumming up the works and providing disincentives for Houston to get a deal done at market value. 

One is that Houston's recent history of handing out long-term contracts to front-seven players has been brutal. DeMeco Ryans and Brian Cushing both received big deals over the last three seasons. Ryans probably would have been released if the Texans hadn't found an Eagles team desperate for a middle linebacker. Ryans' game hasn't been the same since a torn Achilles ended his season in 2010.

Brian Cushing, a linebacker with a history of missing games through injury and suspension, signed a long-term deal prior to last season. Cushing played seven games, then broke his fibula on a Jamaal Charles block. Given the recent history of these contracts going poorly for Houston, you can understand why it may be a little skittish.

Secondly, Watt is such a dominant player that he is the top of the market. What that means for the purposes of these negotiations is that a vintage Watt season is currently more than worth the price of the defensive end franchise tag—even a second franchise tag. Texans owner Bob McNair has publicly acknowledged, to Tania Ganguli of ESPN.com, that the tag is a viable negotiating tool. If you consider the tag number is less than Watt's true value, the Texans essentially have four years of team control left. 

J.J. Watt's Remaining Contract Years
Year Salary Bonus
2014 ~$1.9 million ~$1.6 million
2015 ~$6.9 million none
2016 Franchise Tag none
2017 Franchise Tag none

Over The Cap

Because the Texans have so much leverage here, there's little incentive to rush a deal from their perspective. Watt is certainly one of the most valuable assets in the NFL, but there is no reason to make him a commodity unless Houston is getting enough of a discount to make it worth its time.

 

J.J. Watt's side

We've already been over how great Watt has played on the field. While it often doesn't work out this way because of the confidence and self-belief necessary to be an excellent athlete, Watt's representatives should be looking to negotiate now. Time is on Houston's side, and should Watt slip into being just a very good defensive end rather than the best in the league, he will have lost most of the leverage he currently has.

Watt has expressed some interest in the extensions his classmates have signed. While Patrick Peterson and Tyron Smith have their huge new deals, ultimately each of them sacrificed something to get them done. Colin Kaepernick and Andy Dalton got deals with huge theoretical price tags but little in guaranteed money beyond the first couple of seasons. 

Extensions for Other 2011 Picks
Player Years Amount Guaranteed
Patrick Peterson 5 $70.05 million $16.25 million
Tyron Smith 8 $97 million $22.18 million
Andy Dalton 6 $96 million $17 million
Colin Kaepernick 6 $114 million $12.9 million

Over The Cap

So Watt, too, will be asked to sacrifice. Putting yourself in the psyche of an athlete who has already sacrificed true market value for the past three seasons, it's tough to fault Watt if he decides to aim for the real prize of free agency. But this is the current NFL system—teams have the most control over a player in his prime years. 

Perhaps the only thing helping Watt out is that the salary cap rose last season, and it's projected to grow much higher over the next couple of years. Theoretically, that could let the Texans sign Watt to an extension that will grow into a smaller percentage of their cap over the coming years.

It's a turd in the cap of the NFLPA. Watt is one of the greatest players of his generation. And still, Watt has little negotiating power here. 

 

The deal

Former agent Joel Corry and Ari Nissim wrote a huge treatise—a five-part series—conducting a mock negotiation between the Texans and Watt at the National Football Post. They couldn't come to an agreement on an extension for Watt at this time. Ultimately, the Texans have little reason to negotiate anywhere close to market value right now because they own Watt for at least four more years.

Barring Watt holding out—something completely out of line with his demonstrated personality—his only current leverage is to keep putting up the same dominant numbers he has over the last two seasons. It's a shame, because Watt clearly wants to get something done now. 

Ultimately it's hard to see a deal coming down that will offer less than $40-45 million in guarantees. But the Texans don't really need to go to the negotiating table until 2015. Unless Watt wants to change that by taking less than he's worth, expect negotiations to die down and come back to life next season.

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