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Why is a Zach Ertz deal hard for the Eagles to get done?

The Eagles tight end is clearly upset that his extension talks have halted. But what makes Ertz’s deal so tricky to accomplish?

NFL: Seattle Seahawks at Philadelphia Eagles Bill Streicher-USA TODAY Sports

There were no secrets kept during the Eagles’ meetings with TE Zach Ertz this past offseason. We knew that they were meeting to discuss an extension, we knew that those discussions went south quickly, and now we know exactly how Ertz feels about it.

That last line is the interesting one for the 29-year-old tight end and Eagles staple since his selection in 2013. Extending your high-quality tight end should not be difficult, especially when he’s your primary receiving threat, as Ertz has been in each of the last two seasons. But Ertz and the Eagles are clearly far and acrimoniously apart on an extension, which begs the question: what is the difficulty?

Well, there’s a lot going on right now, not only with the Eagles’ cap space in general, but Ertz’s deal in particular. We’ll go through the extenuating circumstances of Ertz’s contract here, as well as the options the Eagles have for a long-term commitment or short-term divorce with their stud TE.

What’s Happened So Far

Ertz has technically only played under two contracts for the Eagles — his rookie deal, and then the five-year, $42.5M extension he had signed in 2016, on the final year of his rookie contract. At the time, that $8.5M APY deal made Ertz the fourth-highest paid tight end in the NFL. The general structure of the extension looked like this (2016 not depicted).

As Eagles fans know, Ertz’s contract would not remain untouched for the next four seasons. Ertz has restructured his deal in each of the last three seasons, in each iteration converting base salary (non-guaranteed money) into bonus money (guaranteed money). This conversion is to Ertz’s benefit, as that guaranteed money immediately goes into his pocket as cash; it’s also beneficial to the Eagles, as they can prorate that guaranteed money across multiple years, which lowers the single-year cap hit of an otherwise large chunk of base salary.

You can see the progressive changes in same-year cap hits when Ertz restructured his deal before the 2017 season...

...before the 2018 season...

...and before the 2019 season that was just played last year.

Unique to that 2019 restructure are the “dummy” years at the end: 2022 and 2023. Because salary proration can only be spread across a maximum of five years, the dummy years exist to spread the 2019 base salary that was converted to signing bonus ($7.195M) over as many years as possible, making the yearly cap hits as small as possible.

When projecting to the future, it seemed likely that Ertz would negotiate an extension with the Eagles. By prorating bonus money into void years, a team incentivizes itself to extend the player beyond the end of his actual deal. By signing Ertz to an extension beyond 2021, the actual final year of his contract, the Eagles could keep the prorated $1.774M on the 2023 cap — if Ertz walks in 2021, that money will accelerate onto the 2022 books, putting a $3.548M dead cap hit on the 2022 salary cap. That’s not terrible, but it is avoidable, especially if Ertz is still playing well in 2022 (his age 31 season) and beyond.

So What Changed?

A couple of things changed. COVID-19 is a big one.

With revenue streams likely to slow in the COVID-affected 2020 season, the 2021 cap is expected to take a fairly big hit, with 2022 and beyond also in jeopardy. The collectively bargained cap floor for 2021 is $175M, which the Eagles currently exceed by a mere $70M. Only the Saints are in a worse spot.

Without an ever-ballooning cap ceiling, Howie Roseman’s machinations have put the team in a tricky spot. In Ertz’s restructures, Roseman was pushing base salary from 2017 into 2020, from 2019 into 2023, where the money wouldn’t eat up the same percentage of the cap because the future years’ cap ceilings would be higher. Now, they’re going to be lower, or at best, around the same.

Staring down the barrel of COVID-19, the best avenue for lowering cap figures looks to be opening the throttle and leaning into the restructures. Ertz is carrying big base salary figures in both 2020 and in 2021, as well as the prorated money already placed on 2022 and 2023. By signing him to a new deal with smaller base salary figures in current years, guaranteed bonus money prorating onto future years, and fat salary figures in 2023 and beyond, the Eagles could kick the can down the road, lowering Ertz’s immediate cap hits to create more room to breathe under the 2021 ceiling.

That could have worked. Such a move would have secured Ertz’s place on the roster long into his mid-30s — a place that is certainly in jeopardy given the draft pick of Dallas Goedert in 2018 — and continued to deliver him cash in the form of guaranteed money. Having long restructured his deal without adding years onto the contract, Ertz was going to add another four years on his contract and be an Eagle for life.

But then something else changed: Travis Kelce and George Kittle’s contracts.

Ertz is not the best tight end in the league. That designation likely belongs to Kelce or Kittle, depending on your flavor. Kittle was the first to sign his deal, grabbing $75M over 5 years ($15M APY) at a whopping $40M guaranteed; Kelce signed his extension days later, with $57M over 4 years ($14.25M APY) tagged on his deal, with $27M guaranteed. It is worth noting that Kelce is 31, two years older than Ertz is now.

Even though Ertz is not the best tight end in the league, Ertz believes that he is at least in the same tier as Kelce and Kittle, and should be paid in that $14M/$15M arena. This argument is not tough to make when predicated on volume: over the last three seasons, league-leader Kelce (283) only has five more catches than Ertz (278) among tight ends, and Kittle is third on the list at 216. Ertz is also second in touchdowns, once again trailing Kelce, and third in receiving yards. This is another area in which the Eagles’ poor WR play has come back to bite them: in that they have relied so heavily on Ertz in the last few years, they’ve given him a foundation to rightfully argue for more money.

But beyond volume, Ertz’s argument begins to fall apart. Both Kittle and Kelce are positive players in YAC over expectation as measured by NFL’s Next Gen Stats, while Ertz is a below average player in creating after the catch. Kittle dominates in yards/route run and yards/target, where Kelce is also a top player, and Ertz is closer to the middle of the pack. On top of being a less dangerous receiver, Ertz is the worst blocker of the three, even though Kelce is even more of a quasi-receiver for the Chiefs than Ertz is for Philadelphia.

Ertz’s camp is trying to calibrate his value to the Kittle and Kelce deals; the Eagles are taking a more team-friendly approach in comparing Ertz’s value to that of Austin Hooper, who is closer to him in efficiency stats and YAC ability, an equivalent blocker, and notably younger. The 25-year-old Hooper just signed a 4-year, $42M deal with the Browns with $23M guaranteed. In terms of APY ($10.5M), it’s the fourth-biggest TE deal — the same as Ertz’s was when he signed his first extension back in 2016.

A Philadelphia offer with low guarantees and backloaded cash indicates low base salaries to alleviate 2021 and 2022 cap hits, which is the Eagles’ goal here. But Ertz has them under the gun with huge cap figures in the next two years, as well as the prorated money sitting on future years, ready to accelerate forward. That’s why Ertz gets to be aggressive in the media when talking about his contract situation — the Eagles are in a dangerous spot, and if they want to either alleviate cap stress with Ertz’s deal, or extend Ertz, they need to work with him.

What Could Happen Next?

Barring a significant shift in either camp, Ertz will play the 2020 season on his current deal, eating $12.5M in cap space. The 2021 season is where things get interesting. As Ertz said during his availability, he’s looking at 2020 as if it’s the final season of his deal, implying that he will not play under the 2021 contract as it’s currently written.

Assuming that stance holds, the Eagles have three options entering 2021: cut, trade, or negotiate.

If the Eagles cut Ertz before the 2021 season, they’ll be swallowing a significant pill: $7.769M-sized pill, which is the amount of dead money that would accelerate onto the 2021 cap. In that the Eagles are currently slated to pay Ertz $12.47M, they would still save about $4.7M with an Ertz cut — but they would lose an excellent player and focal point of their offense, and be out $7.769M without anything to show for it. A post-June 1st designation can mitigate this hit over two years’ worth of cap space instead of one, but it hurts nonetheless.

If the Eagles find a trade partner for Ertz, much the same occurs. Because teams only trade base salaries and retain any salary proration on their cap, the Eagles would only shuck Ertz’s $8.25M salary in 2019, and still suffer the $7.769M in a cap hit on the 2021 salary books, with a post-June 1st designation again offering an alleviating effect here.

In short, the Eagles can only create $4.7M in space in 2021 by cutting or trading Ertz. With a $70M mountain to climb, that’s only a drop in the bucket. Unfortunately, an extension and accompanying restructure only offer a little bit more space.

Ertz’s restructures in 2017 and 2019, both of which repackaged over $7M in base salary, created about $5.5M in space in each year, when the calculus was done — with more than $7M available to restructure out of his 2021 base salary, we can assume the Eagles would open up roughly $5.5M, maybe $6M in 2021. It’s not much, but it’s more — and, critically, Zach Ertz stays on the roster. That’s always good, especially when you want to win football games.

But because Ertz is digging his heels in on his value, and the Eagles need to keep 2021 (and, hopefully, 2022) costs down, Roseman will have to give a lot on the back end of an Ertz deal. That means tons of money in later salary to get his APY competitive with Kelce and Kittle, and tons of guaranteed money in the form of roster or option bonuses, to put guaranteed money in his deal without slapping a huge signing bonus figure on 2021. The Eagles would be tying themselves, better or worse, to Ertz for several years — realistically, through 2025 and into 2026 (age 35 season).

What Actually Happens Next?

The elephant in the room, as Jeff McLane called him in these discussions, is Ertz’s potential successor: Dallas Goedert.

If the Eagles want to argue that Ertz is not on the tier of Kelce or Kittle in terms of talent, just in terms of volume, Goedert is their proof of concept. On a lower volume than Ertz, Goedert is a better YAC player with an equivalent yards/target and yards/route run efficacy despite having a significantly lower depth of target (5.8 vs. 8.7) given his heavy usage on screens.

Goedert is not definitely as good of a receiver as Ertz is, especially when you consider the attention Ertz draws and volume he’s shouldered, but there is a case to be made. However, Goedert is certainly a better blocker, as the Eagles themselves evidence by how they use each player.

Goedert is also a free agent after 2021, so he will also cost the Eagles money in future years. But in the event that Ertz does hold out, his presence mitigates the concern of losing Ertz, and at the negotiating table, Goedert will not demand the Kelce/Kittle figures that Ertz is.

Goedert’s presence in 2021 and potential price tag after 2021 (I’d guess ~$8-9M APY) cut Ertz’s negotiation power off at its knees, so long as Roseman, Pederson, and Wentz are in alignment that Ertz is expendable. That may be an area of friction for the head coach and the quarterback who have come to rely on him so much, but from an accounting perspective, the Eagles have the screws on them, and need to make some hard decisions.

I’m not surprised a deal didn’t get done given how far apart the parties are, and I’d be surprised if this year makes either budge closer toward the other. Ertz has chosen dire times to make his demands, and is forcing the Eagles between the rock of future cap suffering and the hard place of an Ertz-less offense.

What happens to Ertz depends on future development to the Eagles’ cap projection in 2021 as the final figure is eventually defined, and how much relief they need in years to come. If things get truly desperate, expect a renegotiation on the current deal to create as much immediate cap relief as possible; if longer projections are favorable, the Eagles will likely stay with Goedert and swallow the pill on Ertz with a cut or a trade, depending on interest from teams around the league. Ertz will get his payday elsewhere, and we will all be sad to see him go.