This time of year I usually write an article warning about the excesses of free agency in the NFL.
Every single year big contracts are given out in the first few days of free agency to familiar names. This contracts usually receive near universal acclaim. General managers receive praise for being aggressive and addressing needs. Many of these contracts are ultimately viewed as major mistakes.
Some of these contracts go out to good players. Merely being a good player isn’t enough to merit a contract, however. The compensation of many contracts is just too much for the legitimate value a player provides. You also are taking a player out of the context that made him successful. He has to adapt to a new locker room with new coaching and a new system. Many players just aren’t as effective in different surrounds. Then some players just lost motivation after receiving a big payday. It might be easier to identify who these players might be if you have had them in your building for years. Importing somebody from another team leaves motivation as pure guesswork.
The NFL is singular among major sports leagues in the inefficiencies of free agency. While superstar level talent hits free agency regularly in baseball and basketball, the genuine franchise players don’t hit the market in the NFL. They are usually either re-signed or traded. The franchise tag allows football teams to prevent their foundational players from entering free agency. The nature of the game also likely plays a role. While athletes in any sport could theoretically suffer a career-altering injury at any time, these injuries happen with far greater frequency in the NFL than they do elsewhere. Simply put, this incentivizes players to take a lucrative extension once it is offered rather than waiting for free agency to test the market.
The scarcity of talent on the market drives up prices. In the absence of great players, good players who enter free agency can expect to be paid like great players. Additionally, in a typical offseason almost every NFL team has at least a little money to spend. A team like the Jets might be able to outbid the competition for the player, but the bids other teams put in might raise the winning price to unpalatable levels.
You don’t need to have an advanced degree in economics to understand that the two primary components of high prices are low supply and high demand. NFL free agency has both of these each year. Almost every team is bidding to fill needs, and the worthwhile players are generally scarce.
There are always good deals to be found, but you have to know where to look for them. The best free agent contracts frequently aren’t recognized in March. They are for the backup who is talented enough to succeed in a starting role. They are for the player who is a better fit in a new role on a new team. They are the player whose price is low because of an injury and/or an unproductive season who is now ready to bounce back. They are for the player whose agent badly overplayed his hand and is left to take a one year contract.
Most of what I said will remain true on some level this year. There undoubtedly will be bad contracts given out at the start of free agency. Many of the deals that will be praised over the next few days will be ill-advised.
That said, this is not my annual warning about free agency. This year is different.
We are entering an offseason where the Jets will be among the league leaders in salary cap space. However, this is the rare offseason where they will not be bidding against virtually the entire league for players.
The NFL salary cap for 2021 will be approximately 8% lower than it was in 2020. This is the first time in a decade we are seeing a decrease in the cap from year to year. It is the result of reduced league revenues from the pandemic.
Many teams find themselves in a tight cap situation. Most of the league’s long term budgets assumed consistent salary cap growth. Now across the league teams are scrambling to get compliant with the cap. (Incidentally last the cap decrease of ten years ago is an underrated factor in the eventual demise of the Mike Tannenbaum/Rex Ryan era.)
With money to spend, the Jets will have less competitors for free agents than you would see in a typical year. This will likely lead to lower prices on the market, but there are other factors at play as well.
I have heard numerous analysts express surprise over the quality of this year’s free agent class. It is no accident. The lower cap means players who typically wouldn’t be available now will be. Teams have to cut players they would keep in a normal year for cap reasons. They might not be able to afford an extension for that pending free agent or to use the franchise tag.
With many teams in a cap crunch, demand is down. The players they are dumping increase the supply.
Of course these are broad parameters. Reckless spending is still reckless spending, and it would be ill-advised. There surely will be poor decisions made, and you will not be able to justify every single move.
That said, this is shaping up to be a once in a decade opportunity for the Jets. There likely will be more of a chance to find value in free agency than we have seen at any time in recent memory. If ever there was a year to be aggressive (but not reckless) in free agency, this is it.
There is one great unknown. Only the people running the team know the extent to which revenue losses from the pandemic have affected the team’s cash flow. If the Jets don’t have ample cash on hand, it could negatively impact their ability to give out signing bonuses and guaranteed money.
Assuming the team is in a reasonable financial position, however, I can say this is the rare time where I believe big activity in free agency is the right course for the team. It might be a long time before the market presents this much opportunity again, and the Jets are poised to take advantage.