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Contract Forecast: J.J. Watt

Contract Forecast: J.J. Watt
Untitled Document

Contract Forecast: J.J. Watt

With three seasons now in the books, Houston Texans' defensive end J.J. Watt has risen to the top of his position in dominating fashion. A great rookie season in 2011 (7 sacks, 42 tackles, 40 stops) has been nearly doubled in back to back seasons. Watt led all Pro Football Focus ratings in 2012 with a 101.6 (Cameron Wake was 2nd with 54.3). Not to be outdone in 2013, Watt raised the bar finishing with an even higher 111.6 rating (Robert Quinn was 2nd with a 77.2). He's not just the best defensive end in football, he's the best by a WIDE margin. Combine this with three straight healthy seasons and the sky is the limit for Watt both on the field and in terms of financial gain going forward.

Please Keep in Mind...
As we begin our assessment of a potential extesion for J.J. Watt it is important to keep in mind that are results are based purely on mathematical equations. Our expectations in terms of these forecasts are to compare a player to his like-colleagues in terms of the money they make, and their statistical production. Because Watt is producing statistically at such a high level, we expect a VERY large number to come forward at the bottom of this projection. While it may seem outrageous to assume the Texans or any team might actually make an offer this high - we're simply determining the true value of Watt at this moment in time - as outrageous as it may result in.
Comparable Defensive Ends
Watt will turn 25 in March, the start of the 2014 league year. We'll assume this age for our projections. To determine a more likely starting point for our numbers, we'll perform a linear regression of each contract breakdown listed below.
Player Length Value Avg. Salary Age When Signed
Calais Campbell 5 $55,000,000 $11,000,000 25
Mario Williams 6 $96,000,000 $16,000,000 27
Charles Johnson 6 $76,000,000 $12,666,667 25
Chris Long 5 $60,310,000 $12,062,000 27
Averages 5.75 $68,077,500 $11,848,833 25.3

Note: A linear regression is a formula that plots the provided points of data for Length and Value of the contracts, and then generates the best-fit line for those points, resulting in a "slope" value that translates to an average annual salary.

View the list of Top Average Paid Defensive Ends in the NFL

Because Watt (25) will be younger than some of our variable linemen were at the times of their signings, we'll adjust the above contracts down to his age by adding to their overall years to make each variable player 25 years old. Once a linear regression is performed on these new numbers we're given the following terms to begin with:

Length Value Avg. Salary (slope)
6 $79,473,132 $13,245,522
Statistical Analyzations, Prime Percentage
Now let's analyze these players statistically in the year prior to signing their second contract by showing Games Played, Sacks, Tackles, Solo Stops, and Penalites.
Player Games SAcks Tackles Solo Stops Penalties
Calais Campbell (2010-11, ARI) 16 7 49 42.5 2
MarIo Williams (2009-10, HOU) 14.5 10.5 19.5 28 3.5
Charles Johnson (2009-10, CAR) 14.5 7.75 34 30.5 5
Chris Long (2010-11, STL) 16 10.5 19 25 3.5
Averages 15.25 8.9 30.375 31.5 3.5
J.J. Watt (2012-13, HOU) 16 16 67 69.5 5
% Difference 4.92% 79.02% 120.58% 120.63% -42.86%
To no surprise, Watt is way above the fold in nearly all categories - being deducted only because of his rate of penalties the past two seasons. He's a multi-faceted defensive linemen who has found a way to increase production each of his three seasons, and stay healthy. We'll factor his incredible Prime Percentage of 79.02%, into our previously determined base numbers.
Guaranteed Money
Watt has shown the 3 major keys to earning himself a highly guaranteed contract: Production, Improvement, and Durability. A linear regression on the variable contracts used in this analyzation provides us with the percent of money Greg should receive as true guaranteed with this new extension.
Player Value True Guarantees % Guaranteed
Calais Campbell $55,000,000 $17,000,000 30.9%
Mario Williams $96,000,000 $24,900,000 25.9%
Charles Jonson $76,000,000 $32,000,000 42.1%
Chris Long $60,310,000 23,610,000 39.1%
Adjusted Regression 39%

Length of the Contract
A 6 year contract extension will allow the Texans the ability to spread out both a signing bonus and an option bonus without allocating too much pro-rated money in any given year (similar to Mario Williams' structure).

Value of the Contract
As we mentioned above, Watt's production is so far ahead of any other pass rusher in the game right now, that even comparing him to the best of the best isn't enough to "de-value" him in terms of overall dollars. He scored an average of 79% better than the top-paid defensive ends in football, a figure that when factored into our base contract numbers turn into:

Spotrac's Prediction: 6 years, $142,272,798
  •  Average annual salary: $23,712,133
  •  Guaranteed: $55,486,392 (39%)