Examining how the Washington Redskins should have handled the Kirk Cousins Contract Situation from a Game Theory Perspective
When the Washington Redskins selected Quarterback Kirk Cousins from Michigan State University in the 4th round of the 2012 NFL Draft, no one ever anticipated Cousins becoming one of the National Football League’s (NFL) highest-paid quarterbacks (as well as one of the best, I would say he is in the lower half of the top 10 quarterbacks in the league). In fact, all eyes were on the Heisman-winning Quarterback Robert Griffin III, who the Redskins chose with the 2nd pick in the draft in exchange for a haul of future draft picks. After a fabulous rookie season in 2012, Robert Griffin III quickly fell off a cliff amid controversies with the coaching staff and the front office. As a result, Kirk Cousins started more games for the team and was declared the full-time starter before the 2015 season.
Cousins would break out in the 2015 season, throwing for 4166 yards, 29 touchdowns, and 11 interceptions with a 101.6 quarterback rating to lead the Redskins to an NFC East division title and a playoff berth. In fact, not only did Cousins have a breakout year, but he was beginning to make a name for himself among the NFL’s top quarterbacks. Since Cousins was a free agent after the season, the Redskins began to enter complicated contract talks with Cousins. Despite his numbers, the Redskins front office was not fully convinced that Cousins could serve as the Redskins long-term franchise quarterback, as Cousins had only one convincing season at that time. The Redskins had another option: apply a one-year non-exclusive franchise tag on Cousins for $19.953 million.
Entering contract talks after the 2015 season, Cousins’s camp wanted a contract with $19 million per year and $44 million in guaranteed money. However, the Redskins front office only offered him $16 million per year and $24 million in guaranteed money, which was a lowball offer for Cousins; the franchise tag was already worth more per year than the contract the Redskins offered. The Redskins ended up using the franchise tag on Cousins.
Viewing this as a 2-person game between the Redskins front office and Kirk Cousins’s camp, the Redskins F.O. has three strategies: 1) Offer Cousins less than the amount per year on a franchise tag 2) Offer Cousins a long-term deal (i.e. 3-5 years) worth at least $20 million per year 3) Offer Cousins the franchise tag. Kirk Cousins’s camp has three strategies: 1) Offer a deal worth $19 million per year with $44 million in guaranteed money 2) Take the franchise tag offer 3) Take the lowball offer. If Cousins takes the lowball offer of $16 million per year, then the Redskins front office has a high payoff because they have more salary cap space to work with, while Cousins has a low payoff because he could have earned $3 million more with the other two strategies. If the two sides agree on the franchise tag, this results in equal payoffs for both sides because Cousins gets the money he wants per year and the Redskins don’t overpay, but the tag is only for one year, so this lowers the payoff. If both parties agree to a long-term contract worth at least $20 million per year (and at least $45 million in guaranteed money), then Cousins receives a high payoff while the Redskins have less salary cap space so the payoff is lower for them (Furthermore, Cousins had only one convincing season at that time so if the long-term contract is signed and Cousins regresses then this further hampers the Redskins). Looking back at this, applying the franchise tag after the 2015 season may have been the correct decision for both sides. Cousins wants to build on his 2015 season and seek a higher payoff during contract talks the following offseason. The Redskins front office commitment to Cousins is for one year, so if Cousins doesn’t meet expectations they could receive a higher payoff (in their minds) by letting him walk in free agency but if Cousins continues to improve they can sign Cousins to a long-term deal that both sides are happy about, increasing the payoff.
The 2016 season passes by and Cousins has a solid season, throwing for 4917 yards, 24 touchdowns, and 12 interceptions with a 97.2 quarterback rating. Now the two parties enter contract talks once again. Cousins’s camp now wants at least $25 million per year, but the Redskins offer him a deal within the low-$20 million per year range (i.e.$20-22 million per year) with $53 million in guaranteed money. The franchise tag is now worth $24 million in one year. We review the scenarios:
- If Cousins takes the lowball offer again (worth $20 million per year), the Redskins payoff is high but not as high as last season (when they offered $16 million per year) since they have less salary cap space. Cousins’s payoff is low once again, and arguably lower than last time since he believes he is worth at least $5 million more per year (if he accepted the lowball offer last time he would have earned $3 million less than what he believes he was worth at that time).
- If the two sides agree on the franchise tag, the payoffs for both sides are not necessarily equal: Cousins earns $24 million per year, which is around what he wants, but it is only for one year. Still, he earns around what he believes he is worth. Meanwhile, the Redskins front office has to pay $4 million more than their original asking price ($20 million), and they have less leverage in contract negotiations since offering anything less than $24 million a year increases the likelihood of driving away Cousins (i.e. tensions between the two sides increase).
- If the two sides agree on a long-term deal worth at least $25 million per year with over $60 million in guaranteed money, then Cousins’s payoff is very high since he earns want he believes he’s worth. The Redskins payoff is lower but not necessarily as low as the payoff if they applied the franchise tag on Cousins because while Cousins is making a few million more per year than what the Redskins wanted, they are now more confident that Cousins is a long-term solution since they now have two seasons of solid evidence (it also helps that Cousins was statistically the best Redskins quarterback in over two decades).
Observing the payoffs, it would make the most sense for both sides to agree on a long-term deal. Cousins is satisfied with the deal and although the Redskins pay more per year than they want, the payoff is higher than it was during the contract talks at the end of the previous season). However, the Redskins ended up applying the franchise tag on Cousins for the second straight year and the sides could not come to terms on a long-term deal before the start of the season. Furthermore, signs of tension between both sides only increased, and it started to become apparent that Cousins would not be on the Redskins after the 2017 season.
After the 2017 season, in which Cousins had another 4000 yards season despite a depleted supporting cast, the Redskins decided to move on from Cousins and traded for an older, slightly lesser quarterback (Alex Smith). Cousins went on to sign a 3-year, $84 million deal with the Minnesota Vikings.
Overall, I believe the Redskins did make the correct decision applying the franchise tag to Kirk Cousins after the 2015 season. They had only seen one convincing season from Cousins and agreeing to an expensive long-term deal would have carried some significant risks. However, after the 2016 season, I firmly believe that the Redskins should have signed Cousins to a long-term deal worth at least $25 million per year because of the potential payoffs relative to the other strategies and the fact that Cousins “proved” that his 2015 season was not a fluke.
Time will tell if the Redskins made the right decision not signing Cousins to a long-term deal earlier and letting him walk in free agency after the 2017 season. In my personal opinion, Cousins was the best quarterback the Redskins franchise had since the last time they won the super bowl (over two decades ago). Ever since the last super bowl win, the Redskins have gone through years of turmoil and controversy (personally, being a fan of this team comes with a few ups but many downs). Signing Cousins to a long-term deal would finally give the franchise stability and a shot at championship contention for the first time in two decades. Unfortunately, the sides could not come to a long-term agreement.
Source: https://www.washingtonpost.com/news/dc-sports-bog/wp/2018/03/13/kirk-cousins-in-washington-a-timeline-from-awkward-start-to-lucrative-departure/?utm_term=.11c84076d82d