Before today, J.J. Watt was under contract to the Texans—the last year of his rookie contract, followed by a team option—at remarkable value. The rookie contract system as part of the new CBA put Watt, already a two-time All-Pro and the 2012 defensive player of the year, at a particular disadvantage.
With a scheduled $1.9 million this year and approximately $6.9 million next year, Watt would have made $8.8 million over the next two years, and the Texans would have had continuing leverage with the franchise tag weapon. Owner Robert McNair had even indicated that the team could have squeezed Watt for those three years, perhaps even beyond that with another tag.
Rather than hold their defensive star to those terms, however, the Texans chose to correct this obvious imbalance, extending Watt at a top-of-market rate.
The Texans added $100 million on top of the $8.8 million scheduled, bringing the remaining compensation due to Watt to approximately $109 million over eight years. While the overall average of the eight years and $109 million is $13.6 million, the “new money” average is $16.6 million—$600,000 more than the $16 million standard set for defensive players by the still-active contract of Mario Williams with the Bills and the now-terminated contract of Darrelle Revis with the Bucs. Comparing the contract to that of Williams, while Williams has all “new money,” he had the advantage of being a free agent, while the Texans still had two years of contract control over Watt.
Upon signing, Watt is fully guaranteed at an impressive $30.9 million, incorporating the first two years compensation. This is a good bit more than initial guarantees in recent quarterback extensions for Colin Kaepernick ($13 million) and Andy Dalton ($18 million).
On the third day of the 2016 League Year (in March ’16) another $19 million becomes guaranteed, bringing the full guarantee to $51 million. In terms of cash, Watt will earn $41.9 million over the first three years, with the approximately $10 million in remaining guarantee spilling into the fourth year, a rarity with NFL contracts. The total guarantee of $51 million eclipses the highest number for a defensive player, that also of Williams, for $50 million.
While the Texans secured the advantage of having Watt under contract for the next eight years, this is a strong deal for the player given where he was coming from. The initial guarantee of more than $30 million is very much like that of top quarterback deals, and the overall guarantee of $51 million is just below that of elite quarterbacks. With the encumbrance of two years of contract control by the Texans upon him, agent Tom Condon did a nice job of maximizing value.
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The Texans could have used the contract leverage that they had, but this was not the player to stonewall. Without a franchise quarterback and with a new coaching staff, the team looks to Watt for leadership in the locker room, the weight room, the field and the community. As many who live there have told me, he is beloved in Houston.
This is a deal, for the signature player of the franchise, that had to happen.