Today we've learned that New Orleans Saints tight end Jimmy Graham and the team came to terms on a contract worth $40 million over 4 years - or $10 million per season - with half that total coming guaranteed.
Graham just set a new benchmark for tight ends and people like Vernon Davis are smiling wide right about now.
Yes, Graham lost his arbitration hearing but he was ultimately rewarded on his production and durability. He's a tight end that puts up wide receiver numbers...he has more TDs than Dez Bryant, Brandon Marshall, and Andre Johnson over the past four years with similar receptions and yardage numbers.
Taken in that light, the contract was fair. But what does it mean for those guys like Vernon Davis and others?
The talking heads seem to think it means Vernon Davis should make more than that when their contracts come up, but I disagree. I'm looking into the room when the owner and the players' agent are negotiating, and can see the power of the argument against inflated TE salaries.
Graham plays in a unique system...and one designed for him to be the primary target, especially in the red zone. That alone inflates his TD numbers. While it's a good thing to make sure you can get that six points when you're in the red zone, Graham had a ton of short-yardage TDs, but he also has the ability to be a game-breaker. Sure, I've seen a lot of him being used down close, but I've also seen him haul in a pass around midfield and outrun defensive backs to take it to the house or he'll get caught at the 10, stiff-arm and struggle while allowing his momentum to carry him into the end zone. Yes, he's a load to take down.
Gronk already has his deal in place, but Davis does not. Davis' production is second-tier with Graham being the lone guy on that top tier. Again, the difference is in the offensive system. Drew Brees has thrown for 5,000 yard in three consecutive seasons. Davis has Colin Kaepernick in a run-first offense.
Someone has to be on the other end of all of that and Graham is number one on the team. Mix in the fact that Sean Payton's offensive system is unique, even to the NFL, and Graham's "beef" that caused him to seek arbitration in the first place - the fact that he spent more time than not split out wide instead of "in tight" - was a losing argument in arbitration. However, the Saints are certainly aware of what he can do and paid him accordingly.
In the end, I think we'll see a lot more holdouts and contract disputes with good, productive tight ends like Vernon Davis vs. the Niners organization. Davis is a guy who can haul in a pass at midfield and take it to the house, but inconsistent QB play helps keep his overall numbers down. Davis also isn't the focus of the offense - Frank Gore is.
I just don't think this is as cut and dry as the talking heads seem to think it is. Oddly enough, owners will be using similar arguments that Jimmy Graham used in his lost arbitration battle - that Graham isn't a "normal" tight end, he's split wide 6 out of 10 times, and if one looked at his numbers without knowing the name, most people would say "that's a wide receiver."
With probably 30 of the remaining NFL teams running offenses that do NOT center on the TE position while tight ends are going to be clamoring for a larger deal than they otherwise would, I see a lot of strife ahead in contract talks as I mentioned.
One thing I can say that is going to be affected is the franchise tag money for tight ends. Without knowing what the other top-five tight end salaries are, I would venture a guess that Graham's new deal would pull up that franchise tag money by about a million dollars, give or take, as that calculation is arrived at by taking the average of the top five salaries at the position the player plays, and that's what he makes that season.
The deal has the David Gettlemans of the world - NFL GMs - shaking their heads and doing their own mental gymnastics trying to project the ripple effects on the salary caps around the league. Thankfully in this situation, the Carolina Panthers do not have a "star" tight end to worry about reimbursing at a high level, but it could make Greg Olsen a bit pricier to keep around when his contract comes due. However, while Olsen is a higher-end TE, he's not a game-breaker and isn't a particularly great red zone target, so he shouldn't command a massive pay increase.
I think what will happen is that we'll also see more tight ends testing the free agent waters in the future, especially if the individual feels he has been under-utilized in the system his team runs. Such should NOT be the case in Carolina with Olsen, but could be the case with some others.
Also, in order to command a $10 million per year salary, a given TE will have to produce big numbers year after year with consistency just like Graham has. Gronk could possibly have done that, but injuries of late have kept his own numbers down.
Still, we're going to see tight ends at least start their own contract negotiations with similar salary numbers to Graham's and ease down from there. This should make for some longer talks in contract negotiations as well as more movement in free agency.
It's really a difficult thing to project because of the unique nature of that Saints' offense. Some teams and GMs will go ahead and overpay for a productive TE but I certainly don't see Vernon Davis making $10 million a year in San Francisco. In fact, I have him at the top of the list to seek either a trade or to test the free agent market due to his unique combination of size and speed.
Julius Thomas of the Broncos might demand Graham-like money, but so far he's a one-year wonder and can't stay healthy so he'll need a couple of "prove it" years to even be in the discussion. Several other young TEs are in the same boat.
Basically, I think team owners will argue that Graham is an "anomaly" and in order for them to pay out contracts like Graham's.....SHOW ME THE NUMBERS!
Graham's production far outpaces other NFL TEs. He was paid accordingly. Other TEs will try to get similar contracts. They will fail, but should command a bit more money than they otherwise would have.
Lastly, a lot more NFL teams are going to two TE sets, which should give the Zack Ertzs and the Coby Fleeners of the league more of a chance to obtain those big numbers but they'll have to do it over several seasons to get that double-digit-millions contract.
In short, TEs will probably get a little more money in new contracts, but not extravagantly so. More holdouts are coming, and probably more free agents. That means more movement among teams for the better TEs in the league, which in turn probably will push the TE position up the NFL draft boards as more and more teams will look for that young kid who can come in and produce for four years under his rookie salary deal.
With the current CBA in place, NFL teams are looking to get younger and younger wherever they can while the better teams will pay those bigger salaries to key free agents if they feel a particular guy is who they need to take them up to the next level.
Graham is a TE who produces like a WR. It will take another TE producing similar numbers over several years to actually get a similar contract. His deal is certainly going to make a little more difficult for the other 31 NFL GMs and will be interesting to track in the future.
Basically the contract means a lot of noise now, but in practice shouldn't really change most future deals that much due to Graham's unique situation.
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