RSO Decision: Extensions
The decision of whether to extend a player or not is one of the crucial points for Reality Sports Online managers. This article focuses on the decision-making process for RSO managers which utilize the extension option in their leagues. We examine many of the key factors in determining whether to extend a player and choosing between different options. In particular, this piece utilizes a real-life example from my RSO Writer’s League team in which I have narrowed my extension contract choices to Josh Allen and Tyreek Hill.
Projected Player Values
The extension decision-process starts with a comparison of player values versus contract costs. Allen was the 2020 overall QB1 last season in fantasy scoring for our league and currently the 2021 QB4 while Hill was the WR2 in 2020 and 2021. I calculated each of the players with similar production value at over $50 million per year for the 2020 and 2021 seasons so far. Allen’s offered extension contract is 4 years at $108 million for an average value of $27 million per season while Hill’s is 4 years at $176 million for an average value of $44 million per season placing each among the top-5 priced contract at their respective positions. That makes each player’s extension a below-market value if they continue at their recent production profile into the future but Allen’s extension contract offers a lot more possible surplus value. This extra value surplus on Allen’s contract also necessarily reduces the risk due to injuries or underperformance in future years and adds more roster flexibility.
Projected Franchise Tag Alternative
Many leagues utilize RSO’s franchise tag option which allows your team to keep an expiring contract. The cost is the average of the top-5 players at a position in the first season with options of 20% and 44% increases in years 2 and 3 over the previous year’s contract cost, subject to certain conditions. Allen’s extension price projects at $24 million the first season while Hill is expected at about $39 million. The franchise tag currently calculates to $25 million in 2022 for quarterbacks and about $36 million for wide receivers. These prices are particularly noteworthy for Hill. Hill’s first two years of his extension offer project at about the same cost as two franchise tags. Hill will be 30 after the 2023 season which is an age where fantasy players generally start to devalue wide receivers. This makes the franchise tag a particularly appealing option for Hill in this case. Allen, on the other hand, will have just started his prime years as a quarterback which makes the extension offer more attractive.
Free Agent Alternatives and Salary Cap
The projected free agent pool also bears some thought as possible future replacements for players. Keep in mind other teams may also franchise tag or extend players so the free agent pool will typically be shallower than the pool currently projected as free agents. Brady, Rodgers, Cousins, Ryan, and Tannehill are the only realistic possibilities at quarterback in this league while Cooks, Woods, Julio Jones, D.J. Moore, and Kenny Golladay are among the top options at wide receiver.
The player pool has little meaning without looking at what the projected costs of free agents will be. The projected cap space in this league is over $700 million which presents a huge amount available to spend on the top free agents potentially pushing prices above market values. This factor adds weight to using extensions or franchise tags on players at or below market prices in my case. One must also look at the impact of extensions on your own team’s salary cap. Teams up against the salary cap ceiling in future years may have trouble fitting in large extension contracts.
Extension Value Changes
RSO extension offers may change throughout the season taking into account weekly performance. This might lead an RSO GM to consider waiting on possible better contract offers throughout the season or jumping on one perceived as below-value. The extension offers for Hill and Allen did not change the first two weeks despite Hill coming off a huge week four performance and Allen, conversely, producing a big week five outing. This leads me to expect that the extension offers, which are near the top of market, likely remain similar throughout the year unless something catastrophic happens.
Final Decision
The article displays a number of key factors in deciding between alternative RSO contract extensions. The combination of extension length and price strongly points toward an Allen extension in this particular example while the franchise tag presents an attractive alternative for Hill.
Bio: Bernard Faller has degrees in engineering and economics. He currently lives in Las Vegas and enjoys athletics, poker, and fantasy football in his free time. Send your questions and comments (both good and bad) on Twitter @BernardFaller1.
