Browns fans should separate Odell Beckham from Odell Beckham’s contract

Valuing Odell Beckham and why John Dorsey fails the sanity test

This writer will defend John Dorsey as a brilliant talent evaluator, and especially a great judge of quarterbacks. He was behind Aaron Rodgers when everyone else thought he was a fruitcake. He traded for Alex Smith, who went to the Pro Bowl three times for Kansas City. He signed Nick Foles as a free agent, and later saw him win a Super Bowl over Tom Brady. He traded up for Patrick Mahomes. He also drafted Baker Mayfield.

But many NFL talent evaluators are totally cuckoo at salary cap management. The number one stupid concept is adding value to a player just because you trade him. For example, let’s talk about “fair value” for a moment before turning to OBJ’s specific situation.

“Fair value” means that, in a free market, the employer would refuse to pay any more and wave bye-bye, believing that he’s not worth the money. Any less money, and the player would go take a deal with another team as a free agent. Anything that has traded has some “fair value” that allows the marketplace to function. This is economics 101.

Okay, so suppose a GM signs a player as a free agent, at fair value. Everybody knows exactly what his salary and bonus are because it’s in the public domain. A few months later, however, the GM decides to trade that player because some kid who plays the same position is looking really good in workouts, say.

If everyone has done their homework, the player at fair value should be available for almost nothing. Just pick up the contract, and he’s yours. Or, if league rules require that I have to be charged for his bonus, just reimburse me for his bonus money and it’s all good. That’s what fair value means.

This is like buying a new sports car for 60 months and $1,000 per month or $60,000. Then you find out that a baby is on the way and you’d rather have a minivan. So you try to sell the sports car. But instead of asking for someone to just take over the payments, you want the $60,000 but you also want the new buyer to throw in a Chevrolet Malibu worth $30,000 as part of the deal.

Why is the sports car suddenly worth $90,000? That sounds crazy. But an NFL general manager might actually give you your asking price because they seem to be that nuts.

We have seen this in the Deshaun Watson case. Watson signed an extension worth $156 million over four years. Then he decided he would rather not play for the Houston Texans, and meanwhile, allegations of embarrassing or possibly even criminal behavior have appeared in the press.

So, assuming they can restructure his contract, the Texans are rumored to be asking for four first-round draft picks in addition to having someone taking over his salary. What made Watson gain additional value so quickly?

The answer is that no one with a background in business can understand these insane football general managers. They are literally insane according to accepted free-market business standards. If the marketplace agrees on what fair value is for a certain player, they cannot be traded for assets with positive value.

The 2017 Brock Osweiler deal was one of the few trades that a free-market businessperson can make sense of. In this case, the Houston Texans realized that they had made a mistake and overvalued Osweiler.

“Oops, we gave Osweiler too much guaranteed money and we need to get some back. He is a toxic asset with a negative value. How about we trade him to the Browns, and you guys pay his salary of $16 million, and we will also give you a fourth-round pick and next year’s number two pick in exchange?”

The Osweiler deal is understandable. What is not understandable is the automatic addition of value when a player is traded. In the case of Watson, it is apparent that the Texans should be offering other teams major incentives to accept a $156 million-dollar toxic contract, not the other way around.

But back to the OBJ story. There’s no possible way that the Browns should have paid the bulk of OBJ’s salary and given up two first-round talents. Instead, they should have given up assets to cover the $16 million of bonus money charged to the 2019 Giants salary cap; i.e., something on the order of a second-round draft pick. That would be a reasonable deal, given that OBJ didn’t fit the Giants’ roster, given that they had no realistic hope to contend in 2019 and thus were not a good match for him.

Draft picks are the one true bargain in the NFL, since their salaries are locked in by the NFL Collective Bargaining Agreement (CBA). In 2010 and earlier, draft picks were allowed to hold out for whatever salary they wanted, and they tended to get two to four times what they got under the CBA of 2011.

Thus, Jabrill Peppers and Dexter Lawrence (or other decent picks at 17th overall) had a combined true fair value of at least ten million per year. Four years of Lawrence and two years of Lawrence is probably worth about $40 million or more.

In 2019, the Giants were scheduled to be charged $20.2 million against their cap for OBJ. Upon completing the trade, the 2019 Browns were charged $19.8 million, or virtually the same amount, because they paid most of OBJ’s salary plus the bonus portion of Peppers’ salary.

But they gave up their first-round draft pick that year as well as Peppers. Does that seem crazy? In other words, they paid about 150% of what the Giants were paying for Odell if you include the cash as well as the value of the players. It’s very much like paying $90,000 for the sports car that was just purchased for $60,000 a few weeks ago. Well, it makes sense if you are an NFL general manager.

None of this is the fault of Odell. He has given 100% for the Cleveland Browns and played hurt. Recall that he needed surgery from the time he arrived in Cleveland. The fact that he had 1,000 receiving yards while needing surgery is astonishing.

But the question remains, what was Dorsey hoping to accomplish in 2019? The answer is that he thought the time was ready to take the next step.

Many of us thought so too, although it seems ridiculous in retrospect. But Dorsey was very serious about making a run for the Super Bowl in 2019, and that is why the moves were made for OBJ, Sheldon Richardson, and other big-ticket players.