Is there a limit to how much teams can pay the quarterback and win the Super Bowl, or do at least some very good quarterbacks have essentially limitless value? Teams like the Denver Broncos and Cleveland Browns were willing to trade multiple players and draft picks for star quarterbacks and pay unprecedented salaries to obtain their services. The Broncos traded three players and five draft picks including two first-round picks and two second-round picks for Russell Wilson, while the Browns unloaded five draft picks including three first-round picks for Deshaun Watson. Both received record-setting contracts.
Yet the historical record suggests that there is a limit to how much teams can pay a quarterback and win the Super Bowl. No team has ever won the Super Bowl while paying its quarterback more than 13.1% of its cap allowance in the year that they won, according to Adam Thompson of Bookies.com. That would be Steve Young in 1994, the first year the salary cap was instituted. Other whopper salaries include Tom Brady (12.6% in 2020 and 12.4% in 2018 an 11.8% in 2014), Peyton Manning 12.2% in 2015), and Eli Manning (11.8% in 2011). We should probably include the losing Super Bowl quarterback in the discussion, too. It’s easy to say that Matty Ryan at 15.3% of the cap allowance had zero chance to lead the Falcons to victory, but when they were ahead 28-3, it did look quite so obvious. So, let’s say that 15.3% is the highest cap hit for any quarter to make it to the Super Bowl; 13.1% is the highest for anyone who actually won it.
Table 1. Super Bowl Quarterback Salaries Since 2011 (source: Spotrac.com).
All the salaries are quoted as a percentage of salary cap allowance. The salary cap allowance has historically increased by about 5% per year most years, although it dropped sharply in the 2020 Covid year. For 2021 it is $208.2 million and believed to be up trending to about 10% per year due to increased TV, internet and gambling revenue.
In other words, once in 22 years, a QB (Matt Ryan) had a cap hit as high as 15.3% of the cap allowance and made it to the Super Bowl, but he did not win. We don’t have records easily available of the losing QB’s cap bit prior to 2011, so until someone can prove differently, we are going to say that 15.3% the highest cap hit of anyone who ever made it to the Super Bowl in the salary cap era.
We can say flatly with Bookies.com as our source that no quarterback has ever won it all with a cap hit greater than 13.1% since the cap was put into effect in 1994. It doesn’t prove that it is impossible, but it has not happened yet. That makes it a big, fat, hairy, honest-to-goodness trend.
Now let’s be careful. We are not saying that the team falls apart when the team promises to spend money later. Teams get hurt when they actually spend the money on the cap in that year. For example, Patrick Mahomes signed an extension two years ago, and so you might gain the impression that Mahomes has been among the most highly paid players in the NFL. Not so! Remember that bonus money gets paid up front but is charged to future cap years. Prior to 2022, Mahomes’ cap charge has never been higher than Baker Mayfield’s. In 2021, Mahomes’ cap hit was only $7.4 million (4.1%). This season, the big bucks kick in and his cap hit soars to $35.8 million (17.2%). Consequently, the Chiefs found it necessary to part ways with star wide receiver Tyreek Hill among other cost saving moves. So, it may not be a coincidence if they do not win this season. The effect on the team is tangible.
Similarly, Deshaun Watson’s cap charge is only $10 million dollars (even a bit less due to his suspension) this season. The big cap charges start in 2023 at $55 million per year. Russell Wilson’ cap charge is $17 million this year and does not hit $55 million until 2025. Remember, he was already under contract, so he is getting an extension and his bonus money is charged over the length of his contract, not up front.
Teams with a veteran quarterback can often restructure the quarterback’s salary to obtain an immediate discount and pay higher charges later on. For example, the Steelers are paying Ben Roethlisberger $10 million dollars this season even though he is not playing. It felt good last season, though.
Let’s look at the 2022 cap hits for quarterbacks around the NFL. In the chart below, the quarterbacks whose names are in the red region (namely Ryan Tannehill and Patrick Mahomes) are incurring a cap hit expressed as percent of their team’s salary cap higher that is higher than any quarterback who has ever made it to the Super Bowl, win or lose. Also shown are the Super Bowl odds as of Sept 1 as provided by different commercial betting sites. While there are definitely changes in the odds when quarterback trades are announced, it is not the case that an expensive quarterback guarantees a championship in the minds of the greatest prognosticators available.
Table 2. 2022 Quarterback Cap Hits as a Function of Team Salary Cap Allowance (sources: Spotrac.com; Vegasinsder.com, Wynnbet.com).
As mentioned previously, Steve Young’s 13.1% was the highest cap hit of any Super Bowl winning QB. Tannehill, Mahomes, Kirk Cousins, Jared Goff, Aaron Rodgers and Carson Wentz all have cap hits higher than Young’s and thus are trying to set a new record. Good luck guys.
Teams with a low cost star quarterback include the Cincinnati Bengals (Joe Burrow), San Diego Chargers (Justin Herbert), Buffalo Bills (Josh Allen) and even Tampa Bay Bucs (Tom Brady) and Los Angeles Rams (Matt Stafford). In the case of Tampa Bay and the Rams, the low cap hit comes as a result of restructuring the quarterback contract. There will be hell to pay in the future, but they are sitting pretty for 2022.
In 2023, we will see a new dimension of weirdness as Cleveland gets ready to pay Deshaun Watson $55 million per year 24% of an estimated $230 million cap next year). This is almost twice as much as the Steve Young level. But in 2022, Watson and Wilson have very modest cap charges.
So, what does this all mean? There are different schools of thought. One interpretation is that many teams are irrationally in love with quarterbacks and are willing to way overspend (both money as well as draft capital) on quarterbacks. They will lose because they will not have enough money to spend on other players, especially as time goes by and their buy-now, pay-later plans start to catch up with them.
A second school of thought is that quarterbacks are suddenly much more valuable than they were five or ten years ago and it is worth spending a quarter or half the team’s resources on a very good quarterback. People like me who worry about the salary cap are idiots, according to this theory (don’t worry, I’ve been called worse). The quarterbacks with the highest cap charges–Ryan Tannehill and Patrick Mahomes have nearly unlimited value and are much more likely to make it to the Conference Championships over quarterbacks with lower (for 2022 at least) cap charges such as Lamar Jackson, Josh Allen, Justin Herbert, and Joe Burrow and others in the green zone.
One thing to focus on is how much money is actually being charged to the cap this season. Cases in point are Russell Wilson and Deshaun Watson who will become incredibly expensive in a few years, but for 2022 are still charging only modest salaries to their team’s salary cap due to the weird rules of bonus money accounting. Conversely, it appears that 2022 is the year that the Kansas City Chiefs start paying real money to Patrick Mahomes, and we will see if it affects their team.
Reference.
Adam Thompson, NFL QB Contract Trends: What is the Optimal Cap Hit to Win a Super Bowl? Link: https://bookies.com/nfl/picks/nfl-qb-contract-trends-what-is-the-optimal-cap-hit-to-win-a-super-bowl