2023 Free Agent Return Value

Free agency is a crap shoot for NFL teams...but how much of a crap shoot is it?

Hi everyone, TC here,

If you are a new subscriber to the Cap & Trade Newsletter, welcome! This newsletter covers the NFL salary cap and news across the league with additional coverage of the Houston Texans. I have been covering the Houston Texans since 2012 and 2017 as credentialed media and have been working at OverTheCap.com for the past 8 years. I hope you find this newsletter informative and digestible. I do subscribe to many paywall-type websites for data sourcing and aggregation, but I'm always looking for more sources. While this newsletter remains free, you can activate a paid subscription to assist in making this newsletter even better:

It’s officially official. The NFL offseason has officially begun with the completion of Super Bowl 58. Congratulations to the Kansas City Chiefs!

The offseason is when this newsletter expands to cover the entire league. Additionally, we will be extremely busy at OverTheCap dot com ensuring all the data is made available as quickly and accurately as possible.

This week I wanted to look at free agency and return on value. Last offseason I completed a similar exercise on the 2022 free agency group. You can read that here:

---

This year I was able to get more granular with the filters to give a more accurate representation at the team and position level.

Free agency is difficult for NFL teams. The team is paying market value (or above) for a player who may already have four or more seasons of service and was not re-signed by their previous team. In most cases, teams do not let quality productive players hit the open market.

Last week’s newsletter on Under the Radar Free Agents had a theme that would co-exist with the results discovered here.

Simply put…spending big money on free agents rarely yields a positive outcome for NFL teams.

Data

As always, the contract and valuation data are provided by OverTheCap. I pulled in all contracts signed in 2023 that were classified as Unrestricted Free Agent and Street Free Agent contracts, signed during the February through August time frame. I removed franchise tags, extensions, drafted, and undrafted contracts.

The result was 417 player contracts under those filters, an average of 14.7 contracts per team.

The average value of those 417 contracts was $3,717,139. Of the 417 contracts, 196 contracts generated a positive surplus value.

Two teams were tied for the highest quantity of contracts signed, the Atlanta Falcons and Arizona Cardinals, both at 19 contracts. With no surprise, the Los Angeles Rams were the lowest team with four contracts.

Outcome

The Miami Dolphins were the top team in terms of surplus value. Surplus value is defined as the Sum of Player Valuation - Sum of Player Contract Value.

View Interactive Chart Here

The biggest takeaway for me here was the number of teams coming out on the positive side of the surplus value as compared to the 2022 results. This year the filters were different from my look at the 2022 free agency class.

My opinion for that outcome was due to the lackluster free agent class for the 2023 offseason. Most of the big-ticket players were held under the franchise tag or extended before free agency.

The Indianapolis Colts and Tampa Buccaneers’ placement at the top of the board was primarily due to the value return with Gardner Minshew and Baker Mayfield.

Position Value Outcome

This result blew me away. Teams were able to find a significant amount of surplus value at the linebacker position for the 2023 season.

View Interactive Chart Here

Players that contributed to this big surplus value were Robert Spillane, Bobby Wagner, Azeez Al-Shaair, Quincy Williams, Kaden Elliss, Bobby Okereke, and T.J. Edwards.

The average contract APY for this group of players was $6,238,095 with an average surplus value of $7,633,761. That is an amazing output, clearly defining this position group as the best value from the 2023 free agency period. Could the linebacker group see the big next market adjustment?

It should come as no surprise for the Defensive Tackle group to be at the bottom of the table. That position group experienced a serious market adjustment during the 2023 free agency period with big player extensions completed. This in turn raised the floor value for the remaining free agent players in the position.

The Wide Receiver group also experienced market adjustments over the past two league years with big APY contracts.

Player Outcomes

Below are the Top 30 free agent player outcomes for the 2023 free agency period based on value surplus. Only one player in the Top 30 list signed a contract with an APY of $10.0 million dollars or more.

View Interactive Chart Here

For an in-depth understanding of the OverTheCap Player Valuation metric, you can read it here on the OTC website.

Final Thoughts

Free agency is a wildcard at the end of the day with a more likely outcome of coming out on the negative side. Looking at the team table both the Kansas City Chiefs and Philadelphia Eagles overcame a big negative value return on their free-agent signings.

The two teams that played in the Super Bowl both had a negative return on value.

Free agency is just another piece of the puzzle in building an NFL roster.

Free agency is important for roster building. Free agency should be used to supplement the team roster. Signing big market free agents may not always be the best approach, but it is a path results in negative value return more than teams would like to admit.

This overarching thought is one reason I get concerned when teams start the offseason with copious amounts of cap space.

For some teams, like the Houston Texans with their 1- & 2-year contract structures, this is a function of the contract management style.

Other examples of teams with large-cap space availability are usually the result of a roster turnover/rebuild/retool situation.

The 2024 free agency class should have more fireworks as compared to 2023. Teams are getting better with salary cap management and contract structure.

Teams are getting better with their internal player evaluations and sticking to those evaluations during the signing process.

March 13th can’t get here soon enough!

Thanks,

-TC