A Comprehensive Guide to Extension Decisions

Updated: September 27th 2017

With a ground-breaking extension feature getting rolled out next week (for more details from the league office, take a look here) Reality Sports Online GMs have been scurrying around for inside information like the Duke brothers seeking out the Frozen Concentrated O.J. insider crop harvest report in Trading Places. While this article may not have much about the “secret sauce” that factors into what offer your expiring players are receiving from Weeks 5 to 13 this season, treat this as a comprehensive strategic approach to making contract extension decisions.

These are my opinions and advice based on the information I have about extensions. Just like you, I’m not swimming in insider information. I have, however, put a lot of thought into devising the methodology to approach this decision with. Feel free to use these thoughts, critique them, ignore them and question them on Twitter . Either way, remember that the RSO guys have created something innovative based on the Moneyball mindset that may require a few kinks to be worked out early on. So if you encounter any type of issues, please be kind and patient (and refrain from social media negging) because this platform is infinitely better than what you were playing before and I’m saying that as a customer.

As a disclaimer, I’m not certain I’ll be using my one league voted in-season extension this season as I tend to be a free-market guy who would prefer to see what is going on in the auction. Being somewhat conservative, I haven’t yet been saddled with many “bad contracts” in my leagues that I haven’t been able to get out of, and ultimately that’s the biggest risk an owner faces with these extensions. The biggest risk the RSO guys face with extensions is actually the polar opposite-having the algorithm spit out too kind of a deal for extensions. Remember that when you see your initial offers.

  1. The Airline Ticket Purchase Analogy– When you are looking at taking a trip and booking flights, you don’t keep searching prices after you’ve already purchased the ticket. Likewise, you don’t get on the plane and ask the person sitting next to you how much they paid for their ticket.

So, in similar fashion, if you have extensions enabled in your league and you like the price/years offered for an expiring player the first week it is offered (note that only your team can see the offers your player is getting on your team page) and have the requisite cap space in future years to do it, pull the trigger and don’t look back.

Also, with the “everything is an asset” in an RSO league caveat-if you as an owner are transparent about what your player offers are to other owners, you may be able to work out a favorable trade with them.

  1. What’s Your Benchmark?- Since the only other viable extension opportunity for you is the franchise tag, that is a number you are now forced to know like the back of your hand for every position you have on your roster. If you haven’t calculated the Top 5 positional average for players in your league under contract for 2018 yet, you are already behind. If you are behind, don’t worry, it is not hard to calculate that average by position.

Remember, that the franchise tag for your player by position is the HIGHER of the Top 5 positional average or 120% of your current year salary for that player. The franchise tag does have a term limit of being used twice and obviously has a multiplier effect of 120% if you’ve used it once already.

That said, you should always be comparing your annual average value of your extension offer to your franchise tag cost for the upcoming year. If the extension offer is cheaper for the player of need, that may be an indication that you want to extend that player.

I’ll predict that with potentially high extension price tags and future increases to auction prices (see #3) that the franchise tag will be a more strategically used asset across leagues in the future.

  1. Predicting Future Auction Prices- I’m saying this for those who have been on the RSO platform for a short period of time where the talent in free agency hasn’t turned over much in leagues due to rookie contracts not expiring, etc. Just like you have certain expectations of what someone should cost prior to the auction via your prep, the real auction takes twists and turns and gets more unpredictable as players like Antonio Brown and Rob Gronkowski become free agents for the first time in your leagues. Add that into a dynamic market where several teams are coming into the auction with significant ($100m +) cap space and you get scenarios like my main league where Brown went on a huge contract for 4 years, $243.5m.

Then, when a few players trickle back into the auction and teams have bountiful cap space, you see overpayments being made for players who don’t deserve as much as they are getting. That’s where your perception of where future auction prices are headed can benefit you in looking at extending players. I’ll talk about this more in a bit, but it really is about getting over the initial “sticker shock” of the extension offers.

  1. Sticker Shock and What To Do With It- When you’ve paid a rookie that you sneakily drafted early in Round 2 of your 2014 rookie draft like I did with Devonta Freeman around $1.5m a year for four years, any contract extension offer is going to seem astronomical. Don’t let it be. Of course, Freeman’s rookie contract is well under market value and his extension offer may be more than what you perceive market value to be. Likely, it will fall somewhere in between.

So you’ll likely need to “check down” against what someone like Freeman’s franchise tag # would be in 2018 (of course that’s the summer vs. an in season extension). This is exactly what I’m going to do in Week 5 when the initial offers come out.

Here is an inside look at a spreadsheet I use in my main league to look into future use of franchise tags and extensions. If you don’t have a template like this, you don’t have to be an Excel whiz to set one up. Note that my calculation for Freeman’s tag is based on the Top 5 positional average for running backs. I’ll try to explain more about Allen Robinson later as I’ve already been approached by one owner who is trying to figure out what to do with him this season (NOTE: I have not seen any offers for Robinson and just put these salaries in as a placeholder that may not be realistic).

  1. Players with Small Sample Size (Rookies and Breakouts)

For current rookies or players without much history on their side that have performed well thus far this season, the algorithm has a very small sample size and the offers are likely to be outside of your comfort zone. If you think that someone like Tarik Cohen has league star written all over him, feel free to accept the offer coming his way. I personally would lean on a larger sample size and take my chances in an auction, but one thing you have that the others in your league don’t is current control over that player.

  1. Age Matters

From what I gather, age of player is a definite component of the algorithm that determines extension values and contract lengths being offered. If you’ve seen players like Brandon Marshall fail to separate from DB’s lately, you’ll know that you don’t want to give too many years or dollars to someone on the backside of their career.

At the same time, consider some pivotal ages for your wide receivers and running backs. I typically would view 33 year-old receivers as one year guys with few exceptions (this is when a player like Andre Johnson experienced his decline). In terms of running backs, I’m not giving any running back over the age of 27 more than two years. If you’ve noticed the running back leaders this season in fantasy points, you’ll see that rookie running backs and guys like Todd Gurley and Freeman sit atop the board and they are all 25 and under.

I know there are exceptions to every rule/player, but remember you are in essence via the extension bidding against yourself here and not the market.

  1. I’m All About Value

With likely high prices across the board for extension players, to hit a home run on one, you’re likely to be taking on significant risk or finding value in the marketplace. With that, I think creativity is important and that would include taking a look at players who were already injured this season and are out for the season. Guys like Cam Meredith and the aforementioned Robinson. Let’s dig deeper on Robinson since I’m facing this very decision.

The good: he doesn’t turn 25 until next August, has a monster season under his belt that was two years ago (80-1,400-14), already had surgery a day after his ACL injury with no other structural damage and is a potential real-life NFL free agent this offseason.  He also has no other NFL injury history. His 2017 stats were 1 catch for 17 yards before his unfortunate injury.

The negatives other than the fact that he was injured include his quarterback Blake Bortles not being able to optimize his talents, his 2016 stats being a down year (73-883-6), his Jacksonville Jaguars head coach being uber-focused on the running game, and this injury.

However, from an extension standpoint, there may be an opportunity to arbitrage here as most of Robinson’s negatives can be viewed as positives from an extension standpoint.

Taking into account that Robinson hasn’t produced at an elite level in two years would seem to mean that you could be getting him at an extension number that shows there’s future uncertainty in his outcomes. Yet, Robinson figures to be back playing for the start of the 2018 season and potentially on a new team (or with a new QB other than Bortles). He could be on a “one year prove it deal” with Jacksonville or elsewhere and based on his size, speed and skills, should be able to get back to being a top 20 wide receiver.

So taking into account the likely lack of fluctuation in his weekly offers due to his 2017 being over, his subpar 2016, and some future uncertainty, you may be able to get Robinson for way less than if he was coming off of an all-pro season. Additionally, since you can extend players who occupy your injured reserve space, you can get the benefit of not having to occupy a valuable 2017 roster spot with Robinson.

Not sure what the offers will be for Robinson, but I think anything over $20m a year starts to get me out of my comfort zone based on the fact that much of his uncertainty won’t clear up until the offseason and you have to decide by Week 13 what you are doing with him.

Other than injured players, you may want to look a mid-tier tight ends for potential extension value as well as the position is typically viewed as having less skill.

OK, folks, hopefully this methodology guide on how to approach extension decisions will be helpful to you this season and down the line. Remember, you don’t have to use the extension, so make the decision that best works for your team’s current and future success.


Matt Goodwin is in his fourth season as senior writer for Reality Sports Online and is in year five of his main league. He also contributed for numberFire for several years. He is an avid sports fan from Cleveland, Ohio who would count a Cleveland Indians World Series victory a close second behind getting married to his wife Renee and the births of his children, Jory (7 year old son) and Lainie (3 year old daughter). Matt loves mid 90’s hip-hop, playing pick-up hoops, traveling, Ohio State football and Arizona basketball, watching Glengarry Glen Ross for the millionth time and being outside the few months it doesn’t rain in Seattle where he lives. He can be found on Twitter @mattgoody2 and hopes you continue to read his In the Zone articles and take his side when he’s debating player value with @RobertFCowper.

League Contract Settings

Updated: July 23rd 2017

As we round the final turn heading into training camp, let’s get into the final segment of the League Settings article series.  If case you’ve missed them, the first two articles focused on League Scoring Settings and League Configuration and Settings. As Alec Baldwin emphatically states in my favorite movie, Glengarry Glen Ross in reference to executing contracts, “there’s only one thing that matters: get them to sign on the line that is DOTTED!”.

The Reality Sports Online platform is unlike any other with respect to contracts. The Free Agent Auction Room and the online rookie draft allow for all sorts of both fixed priced contracts (rookie wage scale) and dynamic market-priced deals (free agent auction). Therefore, when a commissioner is creating or tweaking contract settings in their league, there are a myriad of things to consider so let’s dive in head-first.

1) Don’t Go Too Crazy With Long Term Contracts

I know, I know. You joined this platform because you actually wanted to use your brain. All the other keeper leagues feature roster keeper decisions that anyone can make. Keep Mike Evans for another year? Sure, can I have more steak with that? The RSO element of a league or commissioner-elected quantity of multi-year contracts enables maximum strategy on how you prioritize who gets long-term deals and manage yearly salary cap space.

Each year, you get the same allotment of contracts elected by your league (I know this is a question I get from newbies all the time so I wanted to address this). However, post-auction you can make any type of roster moves and trades to acquire whatever long-term or short-term talent you want as long as you have the cap space and roster slots to do it. If you want your team to consist of all four-year contract players, it may be difficult to amass, but it can happen.

When folks join a league like this, the inkling is to keep your studs in perpetuity. Talent and value constantly change, and making a multi-year contract mistake in your first year is crippling. My inaugural year had teams splurge on Trent Richardson and C.J. Spiller. It took a lot to get out from under those deals.

As a result, my recommendation is to start your league with the following contract allotment: 4 year contracts: one, 3 year contracts: two, 2 year contracts: three. The good part of this approach is it focuses your four year deal on someone you really value or the possibility of hitting a developmental home run at a cheaper price.

One year deals can be incredibly value in RSO leagues, assuming you strategize them well. For instance, in last year’s RSO Superflex writers league, I picked up Melvin Gordon on a one year, $8.0 million deal coming off an injury. I loved his talent and figured that his zero touchdowns scored in his rookie season was an anomaly. I was right, and now I have used my franchise tag on Gordon for the upcoming season for one year, $20.3 million.

I personally like using at least one of my two year deals on a quarterback and tend to like wide receivers for long term deals. It is rare for me to give a running back more than two years, based on how frequently that position changes and the short life span of most high-end backs.

2) Have A Two or Three Round Rookie Draft; Have Them Offline

If you’ve read some of our offseason pieces, the rookie draft has been a huge focus. I love the fixed price of rookies, especially at the top of the second round where the contract costs drop precipitously. To keep the rookie pool from getting diluted (like in a five round rookie draft), I recommend having two to three rounds of rookie drafts for most leagues that have 10 to 12 teams. That way there are a few coveted rookies who spill into the auction (think Jay Ajayi two years ago), but enough talent to not have rookies get dropped from rosters for weekly moves.

In terms of having the rookie draft offline, this is a mindset shift for me after having our writers league draft over email this year. I was astonished by how many trades occurred and how efficiently we could still pick rookies. I adhere to the more strategy the better, so I loved all the trade activity that occurred in the rookie draft.

Rookies remain incredibly valuable, especially if you can hit on your draft picks. Those who don’t like rookies can maximize their value by trading these picks for prime assets either at the trade deadline, throughout the offseason, etc.

3) The New Normal: In-season Contract Extensions

In April, Reality Sports Online released details on in-season contract extensions here. In general, I’m a fan of this as it adds another element of strategy to the league. However, I would recommend that owners proceed with caution on banking on in-season extensions or making trades with limited knowledge of how this will work in practice (it is all theory now) this offseason.

For starters, I would recommend that all leagues vote on how many in-season extensions they want to adopt each season (and potentially revisit this decision after the first year of this feature). My main league voted on one extension for transparency purposes with the thought being that we love the auction and want the player pool to be as deep as possible in the auction, but still allowing the opportunity to exercise the in-season extension for one key player per team.

One thing is obvious from all the guidance in Kyle’s release and my interactions with Stephen and Matt on the in-season extension. Players will not be taking pay cuts. So if you franchised tagged a player last season and the breakout season never came, that salary still serves as the base for a potential extension in season. These will be difficult decisions to make.

Further, until you see what the algorithm spits out in Weeks 4 through 13 of the 2017 season, it is a totally crapshoot. Especially with the famed rookie class featuring Odell Beckham Jr., Brandin Cooks, and Sammy Watkins. Those rookies have a low base salary by virtue of the rookie wage scale but figure to jump to what they’d command in the auction if they were free agents on the in-season extension market. For instance, I paid 4 years, $169 million for OBJ in an auction last summer.

Both historic player performance and current year performance will factor into player salaries as well, so you really would be making a decision with imperfect information if you were basing 2017 offseason moves (including franchise tagging a player in hopes of extending them next summer) or trading for a player who could be extended.

4) An Outside-the-Box Thought

As you all know, I’m a huge fan of RSO and it is currently the only league platform I play on. That said, there are inherent limitations of any start-up which has to weigh the costs and benefits of making platform changes. For me, one sticking point is the fact that any player thrown out by an owner in an auction has to be thrown out at a minimum bid. Often towards the end of the auction, there’s a developmental type player I have my eye on and unless someone else throws that player out or I do and ensure that someone else bids on that player, the player I’m targeting may end up on my team as a one-year guy, which wasn’t my intent.

As a result and based on a conversation I had with Stephen this offseason, our league has adopted an off-platform workaround to that issue. Basically, every team in our league has the ability to convert a 1 year, $500k minimum contract to a multi-year contract of the length of their choice (two, three, or four years) within 24 hours of the auction by notifying the commissioner in writing. The commissioner would then have to use the edit contracts feature to alter the contract length. The intent would be for this player to be of the devy type, so ideally defenses and kickers would be excluded but your league could decide on that as you see fit.

By implementing this option, your league would be adding another layer of strategy without impacting the overall contract allotment that you have elected for your auctions.

5) Franchise Tags

The franchise tag is a super-valuable strategic piece that has been in RSO leagues since inception. Basically any expiring player can be extended for the higher of 120% of current year salary or the Top 5 positional average of your league for players under contract.

Since the salary of these players can get fairly high, I recommend that each league allows one franchise tag per team. A player can be franchise tagged and traded if the “Finalize Franchise Tag” button is selected in the offseason.

I personally have used my tag before and it typically pays off if you signed an oft-injured player who produced on his deal. For instance, I turned a two year, $26 million deal for Rob Gronkowski from our inaugural year into to franchise tags at 120% raises. Gronk is now out of franchise tags and will return to the player pool this offseason.

Positionally, depending on your league, there are some leagues where significant value can be found in using the franchise tag for positions like quarterbacks (those late round QB types), tight ends and DSTs. Wide receivers and running backs typically command a prettier penny.

6) Trades/Waivers

I think trades and waivers are fairly standard in RSO leagues. For trades, we let our commissioner review and make the decision. In a format like this, almost every deal has some form of long-term strategy, so something would have to be egregious or somehow demonstrate collusion (which frankly is super rare) for a deal to get rejected. To ensure that teams that are trading draft picks are invested long-term in our league, we make teams trading future year picks kick in at least 50% of next year’s league dues upon trade execution.

In terms of waivers, the FAAB system prevails for one year players. It is fairly standard.

 


Matt Goodwin is entering his fourth season as a writer for Reality Sports Online and is in year five of his main league. He also contributed for numberFire for several years. He is an avid sports fan from Cleveland, Ohio who would count a Cleveland Indians World Series victory a close second behind getting married to his wife Renee and the births of his children, Jory (7 year old son) and Lainie (2 year old daughter). Matt loves mid 90’s hip-hop, playing pick-up hoops, traveling, Ohio State football and Arizona basketball, watching Glengarry Glen Ross for the millionth time and being outside the few months it doesn’t rain in Seattle where he lives. He can be found on Twitter @mattgoody2 and hopes you continue to read his In the Zone articles.