When Mike Tannenbaum hands you lemons, make lemonade.
As most Jets fans know, Mark Sanchez' contract is a salary cap nightmare for the 2013 NY Jets roster. Mike Tannenbaum's ill advised contract extension last year guaranteed Sanchez an $8.25 million base salary for 2013, and combined with guaranteed bonus money prorated out all the way to 2015, Sanchez' cap hit for the 2013 Jets roster will be a whopping $12.85 Million, with an additional $4.3 Million hit if Sanchez is cut or traded. With a fully guaranteed base salary of 8.25 Million, all of which would count against any trading partner's salary cap, Sanchez is virtually untradeable unless the Jets agree to restructure his contract so that all but $2-3 Million of his base salary counts against the Jets cap in 2013. That $2-3 Million figure is the approximate value of a backup QB of roughly Mark's ability and resume, based on what current veteran NFL backups are making.
So, Sanchez can't be cut in 2013 without triggering an instant $4.3 Million cap hit, in addition to nearly $13 Million in dead money being used on a player no longer on the Jets roster. Even if the Jets structure a trade so as to pay all but $2-3 million of his base salary, Sanchez can't be traded without triggering an instant $1.3 - 2.3 Million cap hit, in addition to nearly $13 Million in dead money being used on a player no longer on the Jets roster. That's a whole lotta Sanchez lemons handed to us by Mike Tannenbaum, right? So what do we do when handed a giant heaping pile of lemons? Why, make a giant vat of Mark Sanchez Lemonade, of course.
Mark is a backup QB now, and would likely be treated as such by any other team picking him up. As a starter, Sanchez is very bad, but as a backup, he is pretty good, better than all but a handful of current NFL backup QBs, with the very unlikely but still possible opportunity to develop into a quality starter.
I propose to restructure the Sanchez contract as follows. Spread out this year's cap hit, taking $6 Million of this year's guaranteed salary and converting it into bonus money, thus prorating it over a contract extension ending in 2018. Make the contract voidable by Sanchez after 2015, provided he hits certain performance targets (starts, comp %, yards, TDs, turnovers, QB rating, wins as a starter, playoff wins, whatever is deemed appropriate). By accelerating Sanchez's payout in the conversion of base salary to bonus money, throwing in some modest incentive bonuses reachable only if he performs like a quality starter, and allowing Sanchez to void his contract early if he improves, you give him major incentive to 1. accept the restructuring and the likely demotion to backup QB, and 2. work hard to improve his game and compete for the starting position.
To give further incentive, drop broad hints to Sanchez in closed door meetings that if he does not agree to restructure his contract he will go into the 2013 season as the backup QB with no chance to compete for the starting position, and he will be cut in 2014 when the cap hit is no longer such a problem. He would then be an out of work free agent QB with little chance to latch on anywhere else for anything other than a non guaranteed backup QB deal. But if he agrees to restructure, he goes into the 2013 season in an open competition with whomever the Jets bring in as 1A and Sanchez as 1B, with an opportunity to win the starting position in 2013 and beyond, provided he actually performs like a quality starter.
Reduce his base salary in 2013 to $2.25 Million, with a cap # of $6.85 Million. Reduce his base salary in 2014 from $9 Million to $1 Million (non guaranteed), and reduce his cap # from $13.1 Million to $5.3 Million. Reduce his base salary in 2015 from $12.5 Million to $1 Million (non guaranteed), and reduce his cap # from $15.6 Million to $4.8 Million. Give him a base salary of $3 Million, non guaranteed, in each of 2016, 2017 and 2018, with roster and incentive bonuses tied to earning the starting job of an additional $3 Million each year. This structure allows Sanchez to save face, claiming the overall package has been increased, and actually accelerating the payout of guaranteed money, when in fact the amount guaranteed has not changed at all, and the cap #s are far more favorable for the Jets. From Sanchez's point of view, this is a win.
From the Jets point of view, this is more of a mixed bag, but I think it would also likely be a win.
First, the downside. There are 2 obvious drawbacks to this plan. First and foremost, it once again kicks the salary cap issues down the road. Since that has been a recurring problem for this team, no doubt many would be opposed on principle alone. However, it only kicks a manageable $6 Million into the future, and the cap figures are much less problematic once you get into 2014 and beyond. All in all, this is a drawback, but I think it is more than compensated for by the breathing room created in 2013 and the trade value potentially created for Sanchez.
A second drawback would be Sanchez's probable status as a backup QB. It could be argued that Sanchez will never accept a demotion in NY, and any long term future with the Jets would only create a cancerous and potentially ruinous locker room split and QB controversy. It is possible this could happen. But were it to become a problem, Sanchez will be cuttable after 2013. At worst it is a one year situation, in a year in which, without the cap relief provided by this restructuring, the Jets are probably headed toward keeping Sanchez because he is untradeable. All in all, this is a potential risk I can live with.
With his base salary in 2013 (the only part picked up by a trade partner), reduced to $2.25 million, his cap number for a trade partner in 2013 is also reduced to $2.25 million, making a trade at least an outside possibility. His cap number in 2014 and 2015 for any trade partner would be only $1 million, making him potentially an attractive acquisition target for a team looking for a quality backup who has proven playoff experience and success in big games. By 2014 Sanchez might actually have some legitimate trade value.
Assuming Sanchez is not traded, what this restructuring does for the Jets is free up $6 million in desperately needed cap space for 2013. That could mean the ability to sign one quality free agent, such as Landry or Keller or somebody outside the organization. With creative contract structuring it might even create enough cap space to bring back both the FA safeties for 2013 (Landry would require a backloaded multiyear deal). It could mean the difference between 2013 being a potential return to playoff contender and being an almost certain also ran. In essence, it gives the Jets breathing room for 2013.
Finally, a not completely trivial benefit to this proposed restructuring is that the Jets tie up, on terms reasonably favorable to them, a long term competent backup in Sanchez for 6 years. As a starter, Sanchez is incompetent. As a backup, he instantly becomes the backup with one of the best, if not the best resume in the NFL. To tie such an asset up for the long term would be to the Jets' benefit. Should he continue to deteriorate, you can cut him without too severe cap repercussions starting in 2014. However, should the benching actually do him some good and he just regains his 2010 form, he becomes perhaps the most valuable backup QB in the NFL. And in the improbable, but not impossible, event that Sanchez actually takes the pressure-relieving benching as an opportunity to grow and develop outside the glare of the NY spotlight, and he develops into a pretty good starting QB, this contract instantly becomes a huge bargain for the Jets.
In summary, a restructuring of the Sanchez contract along the lines proposed gives Mark ample incentive to accept it. It gives Sanchez legitimate trade value starting in 2014. It creates much needed cap space for 2013, possibly allowing the Jets to remain competitive for a 2013 payoff spot. It ties up a potentially valuable backup QB at reasonable rates through 2018, and creates a huge bargain in the unlikely event Sanchez ever develops into a quality starting QB. It provides financial incentives for Sanchez to work hard to regain his starting job, while allowing the Jets to cut him after 1 more year without crippling cap consequences. This should not be underestimated in terms of benefits to the Jets, as the current structure of the contract provides little incentive for Sanchez to buckle down and improve - he will be paid the same amount whether he starts or is cut.
The Sanchez contract is a mess, a heaping pile of sour lemons which destroys the Jets' 2013 plans. The proposed restructuring is one way to possibly take those lemons and turn them into Sanchez Lemonade. It turns a terrible liability into a potential asset, albeit with some attendant risk. As the offseason wears into summer heat, that lemonade may come to look like a refreshing respite from the Jets cap problems.