Tuesday, April 2, 2013

Matt Flynn, 90% off original price!

... or is he?

Let's look at the basic facts:
The Seahawks brought in Flynn as a free agent, signing him to a 3 year deal worth a max of about 26 million dollars. The Raiders acquired Flynn from the Seahawks for a 2014 5th rounder and a conditional pick in 2015. The details of the latter are undisclosed, but let's assume it's a mid- or late-round pick.

On the surface, the net result is that the Seahawks bought two minor future picks for about $10m that they have already paid Flynn. But, is it fair to assess the outcome like this?

At the time, Seattle was signing a guy they were pretty sure would be their starter. As starters go, the original deal worked in Seattle's favor (consider the Cardinals made twice the financial commitment to an equally unproven Kolb, one who had never, say, passed for 480 yards in a game). Let's assume (and this is a big assumption), that Seattle's full plan was always to both buy Flynn and draft Wilson. Wilson is on a tiny rookie deal paying him less than a million per year. He ended up beating out Flynn and the team now appears set at quarterback for the next decade. Net investment over 3 years is the $10m paid to Flynn and the couple million paid to Wilson before he gets an extension for real starter money. This is an incredible outcome. Basically, the team gave themselves two shots at guys with upsides, with a low combined cost. Critics can nitpick that "well, if only they had just drafted Wilson and never signed Flynn ... ", but no one could know which (if either) player would blossom. It's possible that Wilson succeeded because Flynn was also there as competition. We'll never know. Bottom line is that they got a franchise guy, amortized to around $4m per year over 3 years. Brilliant.

The Seahawks are already winners, even if they simply leave Flynn at a gas station after stopping for snacks. To understand trade value, we have to look at both the seller and the buyer. The seller is motivated by what they'd need to spend to replace the asset they are giving away. The buyer is motivated by what they'd need to spend elsewhere to get someone of similar quality.

Seattle's replacement value is the going rate for a backup quarterback. It doesn't matter of Flynn turns out to be a starter in the league, he's of basically zero value in Seattle because he'll ideally impact zero plays in 2013. To boot, he's an $8m cap hit this year and the next. A typical roster backup should be making less than half that. In other words, Seattle would benefit by simply dumping him and signing someone else for way less, or drafting a guy in the middle rounds to develop behind Wilson. The catch is that Flynn's cap hit is bigger if he's cut (and he may even impact the 2014 cap, though I'm not sure). If Seattle can trade him, his cap hit for 2013 is reduced to $4m, and his 2014 hit goes away. Thus, trading him for _anything_ saves the team $12m over 2 years, and gives them flexibility to address the backup spot in the draft or via free agency or trade. Right here, right now, Seattle should be happier with a 7th round pick than with Flynn.

The Raiders need a quarterback because Carson Palmer doesn't want to be there anymore. Flynn is probably as attractive as the top 2 quarterbacks in the draft, which would peg his value as high as a late 1st rounder, but realistically a high 2nd. However, Flynn is already 28 and therefore hitting on him has less long-term value than hitting on Smith or Barkley or one of the other college prospects. Additionally, having the flexibility to either take a quarterback in the 2nd or a player of great value filling a need who happens to be there is worth something to the Raiders as well. Thus, I don't see them inherently valuing Flynn higher than about a 3rd round pick. Add in that Flynn will make much more than rookie money, and that offer has to keep going down.

In principle, we've established that there's common benefit to the trade, and we've pegged the value between "less than a 3rd" and "at least a 7th". The Raiders maintain the leverage here because they can just as easily draft a prospect with upside. Thus, they can squeeze the Seahawks close to their acceptable selling point. The final deal seems like a compromise: a future 6th is about equal to this year's 7th (minimum selling point), and the conditional 2015 pick is there for "fairness", in case Flynn really pans out. If that 2015 is, say, a 3rd rounder (equals a 5th rounder today), then the Seahawks are getting pretty close to about the max the Raiders would have been willing to pay.


No comments:

Post a Comment

Contributors

Followers