DeAndre Hopkins Extension Revisited

March 24, 2017

On multiple occasions this offseason the Texans have stated that a long term contract for wide receiver DeAndre Hopkins is a priority.  Back in December of 2015 we created some examples of a contract extension using different contract models, which you can read here.  In my opinion that offer was a fairly strong offer at the time based on the current wide receiver market.  The Texans decided not to offer Hopkins an extension last offseason, opting to wait until his rookie contract had one year remaining.  The wide receiver market has not changed dramatically in that time, however some adjustments are in order from our previous projection.  In the past I’ve tended to side with the team in creating these projections, causing them to come in very conservative.  This time I will attempt to work from the player perspective to match the current market values.  As Seth Payne mentioned this morning, I believe Hopkins’ representative will request to toss out the 2016 season stats; especially given the team admitted their mistake with Brock Osweiler.  From a team stand point the goal is to retain Hopkins while maintaining the cap percentage of ~8.5% in the first three years.

Hopkins current 2017 salary cap charge:  $7,915,000

Contract Goals:

  • $14.5 million average per year (APY).
  • $30.0 million practical guarantee at signing.
  • $45.0 million in vesting guarantee’s.
  • $50.0 million cash flow in first 3 years of the contract.
  • $65.0 million cash flow in first 4 years of the contract.

Player Comparisons (via OverTheCap.com Premium section *highly recommend subscribing*):

  • Demaryius Thomas
  • A.J. Green
  • Vincent Jackson
  • T.Y. Hilton
  • Dez Bryant
  • DeSean Jackson
  • Julio Jones
  • Doug Baldwin
  • Antonio Brown
  • Keenan Allen

First let’s review the contract offer created in December 2015

5 year contract worth $73,945,000

  • $14.79 million APY
  • $27.45 million GTD at signing
  • $44.0 million in vesting guaranttee’s
  • $44.75 million in 3 year cash flow
  • $59.45 million in 4 year cash flow

 

This offer would have exceeded the APY metric but comes up short in all over metrics.  This contract offered a $12 million dollar signing bonus, first two years base salary fully guaranteed, $4 million roster bonus 5 days after the contract signing.  In 2017 the contract offers a $8 million roster bonus, which would have become guaranteed in November 2016.  The 2018 base salary is guaranteed for injury only at signing.  $500,000 per year in additional roster bonus paid on a per game basis.

Revised contract based on new wide receiver market

5 year contract worth $79,500,000

  • $15.9 million APY
  • $28.0 million GTD at signing
  • $48.0 million in vesting guarantee’s
  • $49.5 million in 3 year cash flow
  • $63.0 million in 4 year cash flow

 

This offer exceeds the APY metric which the agent could boast Hopkins as the “highest paid wide receiver”; and exceeds or comes very close in the other metrics. This contract offers a $12 million dollar signing bonus, first two years base salary fully guaranteed, $4 million roster bonus 5 days after the contract signing.  In 2018 the contract offers a $8 million roster bonus, which would have become guaranteed in November 2017, paid in April 2018 league year.  The 2019 base salary is guaranteed for injury only at signing.  $500,000 per year in additional roster bonus paid on a per game basis.  This structure models J.J. Watt’s contract.

The cap % per year is very low except for 2018.  The Texans’ salary cap situation in 2018 is favorable to use this structure to limit back end cap liability in 2020 & 2021.

The contract would include the provision for the team to convert the 2018 roster bonus to a signing bonus to free up $6 million in salary cap should the team need it.  Such a conversion would look like this:

 

This would give the team some short term savings at the expense of long term liability.  Given the 2018 salary cap situation for the Texans such a conversion should not be necessary.

My expectation is to see a contract extension agreement between the Houston Texans and DeAndre Hopkins to be completed in May or June.

Troy

 

 

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