Here we go again. For the third time in four years, J.J. Watt unfortunately has a season-ending injury; this time a torn pectoral muscle.
And once again, the speculation begins on how the Texans will handle the future years on their iconic star’s lucrative contract.
I raised a similar question last year — after the three-time NFL Defensive Player of the Year had missed 24 games through 2016 (back surgery) and 2017 (fractured leg) — wondering whether Houston would bring him back in 2018 under his scheduled salary of $11 million or ask him to take a pay cut with incentives as part of a restructured deal. The Texans believed in Watt and kept the contract in place, and he rewarded them while proving me and so many others wrong for doubting whether he could return to his dominant self.
I could be wrong again, but under new circumstances, I think Watt this time will be forced to accept a reduced deal with major incentives if he is to stay in Houston. That's what I would try to negotiate if I were the Texans' general manager.
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“Absolutely gutted that I won’t be able to finish the season with my guys and give the fans what they deserve,” Watt tweeted after his injury Sunday. I guarantee the Texans are similarly gutted that their best defensive lineman is out for the second half of the season, and that they now have to ponder his contract status going forward.
There are so many factors at play, including Watt’s status as an icon in Houston. He is a class act and one of the greatest ambassadors ever for his sport and the NFL.
The Texans appear to be in good enough shape salary cap-wise next season that they could take on Watt's scheduled $15.5 million base salary. From a cap standpoint, they also don’t have to be concerned about paying Jadeveon Clowney close to $20 million per year since he is now in Seattle after the preseason trade. But Houston definitely could use more of a sure thing for Watt’s money with his lack of durability a big concern for their 20th-ranked defense.
Other key elements that were not in play two years ago are Watt’s dead money and quarterback Deshaun Watson’s contract status. There is no dead money hit if the Texans decide to release Watt compared to the large hit of approximately $8 million had he been released two years ago. And Watson will be seeking an extension worth $35 million or more per year following his third season.
As much as I’d like to see Watt beat the odds again and return as a Pro Bowl-caliber player worth the high salary, it’s a tough call to believe he can do it again at such a high level. At 31, he is two years older than he was when he rebounded so well from his broken leg. Not to say it can’t be done at that age, but it’s tougher with the extra wear-and-tear on his body.
Even though Watt’s sacks (4), tackles (24) and forced fumbles were down significantly over the first eight weeks compared to last season, he still was playing well. According to Pro Football Focus, he was among the top defensive ends in combined sacks, quarterback hits and pressures with 52.
After considering those numbers, his amazing work ethic and desire to return to top form that successfully carried him through his last major rehab, I would try to negotiate a deal that can work for both the Texans and Watt.
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I would offer Watt a restructured contract covering the next two years, which are the final seasons under his current deal. I would seek to reduce his scheduled base salaries of $15.5 million and $17.5 million to $8 million in 2020 and $10 million in 2021, giving him the opportunity to recoup the $7 million in cuts each year through a combination of roster bonuses and performance incentives.
I would start the roster bonuses at his ninth game on the active roster so the incentive would not count as likely to be earned under the salary cap (since he was active for eight games this season). I’d offer $500,000 for every game he is active beyond the eighth regular-season game. That would total $4 million if he doesn’t miss a game.
Then I would offer $3,000,000 if he reaches 10 sacks. So if he plays in 16 regular-season games and hits double digits in sacks, he'd be back to his original salary levels.
As an additional inducement to sign a restructured deal, I’d create upside for Watt if he has another amazing comeback. I would give him the opportunity to reach Khalil Mack’s $22.1 million average under his Bears deal that made him the league’s highest-paid defensive player. The incentives could be set up so if Watt had 15 or more sacks and made the Pro Bowl with the team in the playoffs, he could max out his contract with another $6.6 million. And perhaps another million could be tossed in for Defensive Player of the Year.
It would be hard for Watt to turn down such an offer. If he asked to be traded, I’d tell him it's unlikely any other NFL team would take on the risk of inheriting his current contract. And if he refused to accept the restructure and was released, it’s doubtful another team would give him a better offer. He has made over $85 million during his nine seasons, plus a substantial amount through endorsements, so it’s not as if he has to chase the last dollar.
Watt also could decide to retire rather than accept a potential pay cut if he didn’t hit his incentives, but I highly doubt that will happen, as he said in his Sunday tweet, “I truly love this game and can’t stand letting you guys down.”
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As a GM, I had to negotiate many player pay cut deals. I often saw pride get in the way of a player making a wise decision to take less base salary with incentives, but I think Watt would realize he has the best chance to succeed and make the most money by staying in Houston under a revised deal. He knows the system, has worked successfully with his coaches and teammates and has been on a playoff team most of his career. (Which should continue to be the case.) Watt also is invested in the community through his outstanding charity work with the J.J. Watt Foundation. If he stays, he avoids the hassle of relocating.
Another key question is who will be the new Texans GM to inherit this potential Watt drama. Coach Bill O’Brien wields plenty of power and will likely have a big influence on how things unfold, but the new GM will need to be skillful as he enters the fray.
While Watson’s inevitable extension takes top priority for the organization, the future of Watt is a close second, both for the Houston defense and in terms of fan perception for such a popular player.
The new GM will get off to a bad start if he mishandles the greatest player in franchise history.
Jeff Diamond is a former president of the Titans and former vice president/general manager of the Vikings. He was selected NFL Executive of the Year in 1998. Diamond is currently a business and sports consultant who also does broadcast and online media work. He makes speaking appearances to corporate/civic groups and college classes on negotiation and sports business/sports management. He is the former chairman and CEO of The Ingram Group. Follow Jeff on Twitter: @jeffdiamondNFL.
