In my breakdown of Tony Romo's worth to the Cowboys, I calculated that Romo's value, based solely on his 2012 play, is in the range of quarterbacks who have received contracts worth up to $14 million per season. The concept of value changes quickly in the NFL, however, especially since there are different ways to judge it. As I mentioned in last week's Star Magazine "On Air" podcast, we can talk about Romo's inherent "worth" all day, but all that really matters is his perceived value – the money other teams have established he's worth based on contracts for "Romo-like" quarterbacks.
And one "Romo-like" quarterback, the Ravens' Joe Flacco, just signed a contract that made him the highest-paid player in NFL history. Flacco's deal is worth a total of $120.6 million over six years, an average of $20.1 million per season. More important, Flacco received a $29 million signing bonus and $52 million in guaranteed money, the real "meat" of the contract from his perspective.
Now there are obvious differences between Flacco and Romo, and I'll address those in a bit. But let's look solely at on-field play in 2012. If you recall from my assessment of Romo's value, there's a really strong correlation between contract value and a nerdy advanced stat called "expected points."
In a nutshell, an offense can be expected to score a certain number of points on any given drive based on various game situations, such as down-and-distance and field position. A first-and-10 at your own 20-yard line has historically been worth an average gain of 0.34 expected points, for example. By tracking the change in expected points that a quarterback generates on a per-play basis (EPA/play), you can get a really good idea of how well he's performing.
Joe Flacco: The Most Overpaid Player in Football?
Below, I charted the EPA/play for some of the top-paid quarterbacks in recent years. The Flacco deal is in red.
For the most part, teams have paid quarterbacks in a manner consistent with their EPA/play, whether they know it or not. Most of the blue dots in the graph fall near the black line, the "true" worth of quarterbacks based on their market value.
However, you can see that the Flacco contract is listed way above the line. Players listed above the black line are "overpaid" based on their EPA/play and past quarterback contracts. Flacco's location on the graph isn't a good thing for the Cowboys or anyone else trying to sign a quarterback since those deals will use Flacco's as a framework. In effect, Flacco has reset the value for quarterbacks.
But guess what? Flacco's EPA/play wasn't even close to being worthy of $20.1 million per year. Actually, Flacco's 2012 efficiency (0.15 EPA/play) was just one-hundredth of a point better than Romo's. The obvious rebuttal would be that Flacco won the Super Bowl, and rightfully so, but I included Flacco's postseason numbers. Flacco certainly ramped up his level of play in January, but that fact is accounted for in the data. In the regular season alone, Flacco's EPA/play was just 0.10.
Differences Between Flacco and Romo
As I mentioned, there are obvious differences between Flacco and Romo in regards to their market value. The first is that Flacco is coming off of a Super Bowl victory and Romo has experienced little postseason success over his career. If we deemed Flacco and Romo as possessing the exact same level of talent, Flacco would still be worth more money because championships obviously hold a lot of weight in contract negotiations.
Second, Flacco will enter the 2013 season at age 28, while Romo will be 33. Based on historic quarterback production, there's still good reason to think that Romo will be able to sustain a high level of play for a few more seasons. Quarterback efficiency typically peaks around age 29, but it doesn't drop substantially until a player enters his late-30s.
There's a difference between maintaining a certain level of play and improving it, however. While Romo could very well improve upon his lackluster 2012 season, it isn't probable that the next four years will be better than the past four seasons. For Flacco, the opposite is true; there are really strong indicators that his future efficiency and overall production will increase, especially over the first few years of his contract.
It seems as though the best organizations tend to pay for future production – they accurately determine a player's future value and pay him accordingly – whereas less successful teams often pay too much for past production. The Flacco deal was an outlier, and Romo will undoubtedly use it as a foundation in his contract negotiations (as he should). For the Cowboys to overcome the market value set by Flacco, they must convince Romo that the Flacco deal was constructed for a player on the rise, a 28-year-old quarterback coming off of a Super Bowl victory, not a 33-year-old passer (albeit a very talented one) who struggled in 2012. There's no doubt that signing Romo should still be a priority for the 'Boys, but the team that could have some future cap struggles needs to make sure the deal works financially for both parties.