Breaking down Derrick Henry’s contract

July 15th, 2020, shall officially be known as Derrick Henry Day amongst Tennessee Titans fans. Titans’ General Manager Jon Robinson had everyone fooled into thinking that a deal was not going to happen with their face-of-the-franchise running back, Derrick Henry. However in the final hour leading up to the deadline a Schefter-Bomb was dropped:

What ensued was Twitter losing its mind over this last minute news. On one hand, Titans fans were rejoicing, but also wondering about the contract numbers. On the other hand, analytics twitter is saying this will not end well for the Titans, because paying a running back never works out. Our own Mike Herndon has written an article that says why paying this running back is different.

Contracts are tricky. What does it all mean? How does this affect the salary cap for this year? What about all the pending Titans free agents when you look at 2021?

Well, have no fear, I am going to break this down and we are going to look at it from all angles.

The Basics

Unlike Patrick Mahomes, the Derrick Henry contract is really simple to wrap your head around. This is a great example to really improve your knowledge of NFL contracts. First, let’s start with some simple definitions:

  • AAV (Average Annual Value): The average a player is paid per year over the full term of the contract. AAV does not necessarily equal the cap hit per year.
  • Cap Hit: This is the amount that actually affects a team’s working salary cap.
  • Working Salary Cap: Every NFL team works off a Top 51 salary cap. This means that only the 51 most expensive contracts for a team count against the salary cap. When a new player is added at a high contract amount, the lowest salaried player is correspondingly dropped off the working cap.
  • Guaranteed Money: This is the amount of the contract that the player is owed no matter when he is cut or traded. Typically this includes portions of the base salary, signing bonus, and other versions of bonuses.
  • Signing Bonus: This is what the player is paid at signing. He is paid this upfront but a team can prorate it over the course of the contract. These amounts play into dead cap hits when a team decides to terminate a contract.
  • Dead Cap: The amount of money a team is left with on their salary cap if they decide to trade or cut a player before the fully guaranteed money is paid.

There are a lot more definitions surrounding a contract, but that will get us started for the purposes of breaking down Derrick Henry’s new deal.

Derrick Henry’s contract

On March 16, 2020, the Tennessee Titans decided to franchise tag Derrick Henry, resulting in paying him a guaranteed salary of $10.278 million for the upcoming season.

Derrick Henry signed his franchise tag on April 2, 2020, and on July 15, he reached an agreement for a four-year deal worth $50 million, and $25.5 million of that is guaranteed.

Complete breakdown of the contract courtesy of Spotrac.com

This is a fantastic contract for a lot of reasons. First, as you can see, this is not an extension of the tag, but a completely new deal that replaces the tag numbers.

This is great because it lowers Derrick Henry’s 2020 salary cap hit from $10.278 million to $6 million. This increases the salary cap for the Tennessee Titans this year by $4.278 million.

Another good thing about this deal is the easy out after two years. After the 2021 season, the team can get out from under Henry’s contract with a dead cap hit of just $6 million (that $6 million is the leftover amount of the prorated signing bonus). This means instead of Derrick Henry hitting the Titans salary cap at $15 million for 2022, he would only count $6 million against the cap (if he was cut or traded prior to the 2022 season).

A lot of the “don’t pay running backs” crowd were all about tagging Henry twice. This contract is a great compromise to that. Tagging Derrick Henry twice would result in a combined total of $22 million guaranteed.

Instead of potentially angering Henry next year, and even creating some tension in the locker room, Jon Robinson decided to pay him $3.5 million more in guaranteed money to prove that if you’re loyal to us, we will be loyal to you.

Jon Robinson did a masterful job with this contract. He signed Henry under Spotrac.com’s Projected Market Value. The market value was projected to be $13.8 million per year in the form of a 4-year, $55.4 million contract.

He also got great value considering past running back contracts, especially past Tennessee Titans running backs. Roughly nine years ago, the Tennessee Titans extended Chris Johnson to a four-year, $53.5 million contract extension with $30 million guaranteed. I repeat: Nine. Years. Ago.

This is an excellent contract for a running back who only has one and a half years of starting running back tread on the tires, and we have all seen by now the workout/training videos he’s posted. He is of a different breed.

The contract also keeps him with the Tennessee Titans through the prime of his career. We all know that, outside of a few exceptions, once a running back hits that 30-year-old (and older) mark, they start to fall off, performance wise. That’s why this deal is genius, the running back gets paid, but when he’s older someone else can overpay him, or the Titans can retain him on a team-friendly deal.

Finally, I love that the contract coincides with the end of Ryan Tannehill’s contract. You guys can argue all day on Twitter who is responsible for the success the Titans had in 2019, but I fall firmly on the “both guys are responsible” side. It was very much a symbiotic relationship, and both mutually benefited from the other, while the team and its fans had a helluva ride watching an amazing offense.

What does this mean for 2020?

This new contract has a tremendous impact on the 2020 season for the Tennessee Titans. As I said above, the team increases their salary cap by $4.278 million with this signing.

Those Spotrac.com numbers are correct, and the Tennessee Titans have plenty of room to maneuver for the 2020 season. This obviously leads to, as Justin Graver pointed out, Jadeveon Clowney.

I’ve had zero doubt since the offseason started that Jadeveon Clowney was going to end up in two-tone blue. This contract absolutely solidifies that he is coming to Nashville in my mind.

Here is what Derrick Henry recently said on the matter of Clowney:

Jon Robinson definitely wanted to get the Derrick Henry deal done to lower that 2020 cap hit, for the impending signing of Clowney, because that deal will more than likely be a one-year contract with a lot of money guaranteed.

However, this $4.278 million is not to increase an offer to Clowney, but to give the team money leftover to sign free agents for camp and injury purposes.

Jon Robinson likes to have a little spending money during the season, and this gives him some breathing room in the regard.

This is also great for continuity on offense. The offense is returning 10 of 11 starters in 2020, and the same offensive coordinator. That is tremendous continuity.

Derrick was never going to sit out in 2020, but this also bodes well for also returning all the starters in 2021, which again is great for the Tennessee Titans.

This also impacts the locker room. It sends a clear message that loyalty is rewarded, and that we are dedicated to keeping the same momentum on offense as we had since Ryan Tannehill took over. We are dedicated to a winning formula.

You saw all the players on the team who said Derrick should get paid. Once he got paid, they were all happy for him. He is a leader on this team, and well liked and respected. Again, Jon Robinson knows that this sends a clear message and will make future negotiations a little easier.

What does this mean for 2021?

No one right now knows how the salary cap will be affected by the current situation with COVID-19. So we are all just speculating at this point, but for the purpose of this article, we will assume that the NFL salary cap stays the same.

If that is the case, then heading into 2021 the Tennessee Titans will have a working cap of $20.3 million, which ranks them 21st in the NFL.

The Titans have five free agents of note:

  • Jayon Brown
  • Jonnu Smith
  • DaQuan Jones
  • Corey Davis
  • Vic Beasley

I think we can all agree that the first three are by far the most important, and resigning them and getting notable free agents to fill the roster is going to be a little tight at the $20.3 million.

The impact of the Derrick Henry contract is not really felt in 2021 from a numbers standpoint, but it is felt when talking to those first three guys above.

Jon Robinson drafted both Jayon Brown and Jonnu Smith, and both have turned into important pieces for this team. I think seeing how Robinson handled the Derrick Henry situation will go a long way.

I think what will happen with these two will be similar to the way he handled the Ryan Tannehill-Derrick Henry situation earlier this year, by working to try to sign both before free agency opens but maybe only getting one done and tagging the other.

Who would he tag? Jonnu would be the likely candidate over Jayon. A tight end franchise tag should be around $10.6 million next year, while it would cost roughly $5 million more to tag a linebacker.

If you want to trust Mike Herndon, he thinks a Jonnu extension will be done soon, but I think it’s more likely after the regular season is over with.

DaQuan Jones is an interesting case. DaQuan is absolutely the most underappreciated Titans player on this roster. I think this is starting to change, but fans do not recognize just how good he has been.

He was drafted in 2014, but Robinson gave him a three-year, $21 million contract in 2018. A lot of people thought he may end up either getting cut or restructured heading into the offseason, but in reality Jurrell Casey took that role.

I think the Titans really like DaQuan, he has also become a true leader on this team and was even recognized by the team with an offseason award for being a leader. This is who I think will end up getting an extension before the year is up. He is turning 29 in December, and I think we could see a three-year extension to help bring the cap down for 2021.

This all goes back to Derrick Henry. I think these players will end up agreeing to contracts with the Titans that are reasonable for both the front office and for the player. Jon Robinson has proven this time and again, and the impact of this Derrick Henry extension will be felt for years to come.

Side note: Something will be done about Malcolm Butler’s contract situation for sure, because as things stand now, he will have the second-highest cap hit among all Titans players for 2021. They could attempt to restructure his contract or even end up cutting him and saving $10.2 million next offseason.

Pay attention to the man behind the curtain

Jon Robinson is the best general manager the Tennessee Titans have ever had, and he is a top-five general manager in the league.

He is constantly getting players on value contracts and has way more hits than misses when it comes to the draft. So why do people still doubt him?

I think it is just some battered fan/analyst syndrome. On Football & Other F Words, we were shaken to our core at one point during the 2019 season. It took us a while to come out from our PTSD-riddled comas, but through it all, I’ve never doubted the job Jon Robinson has done.

It is time to understand how Jon Robinson works, and I think we have enough evidence to do that now. Here are a few things to expect from Jon Robinson:

  • The guys that are important to this team’s success will stay here.
  • They will stay here at a reasonable price.
  • Typically contracts will have a lower cap hit in year one.
  • Usually an “easy out” on either year two or year three of the deal.
  • While he is smart with the money, he isn’t cheap or refusing to spend.
  • He is pretty candid on how he is conducting business.
  • Adam Schefter is his guy.
  • Not afraid to let a guy walk that is not living up to expectations.
  • Not afraid to let another team overpay for a player he can replace in the draft.

I’ve talked a lot about loyalty in this post, and I know a lot of people out there are still in their feels about trading away Jurrell Casey for a 7th-round pick. It is time to let that go. Don’t you think Jon Robinson wanted more in return for Casey? I do. Except, that is not how trades work.

Trades require two parties. No one else wanted to give anything more for Casey. That should tell you about the views from the other 31 teams on Casey. His contract and his on-field play were not aligning anymore. It was time to move on, and the team took the best trade proposal they received.

I think in the end if you’re doubting both paying Derrick Henry this amount, and the job of Jon Robinson, you may never find true happiness as a Titans fan, but me? I’m riding this wave of pure happiness all the way to a Titans Super Bowl this year.

What do you think of the Derrick Henry contract and the job Jon Robinson has done? Leave comments below, and let’s discuss!

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