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Opinion: Dawson Knox’s contract extension is smart risk management by Bills

Let’s dive into the metrics of front-office cap management

Former Green Bay Packers executive Andrew Brandt has a history of summing up NFL player contracts by saying “it’s actually X years and then ‘we’ll see.’” How many years comes before the “we’ll see” is usually a result of the dead-cap hits that would be incurred by a team if they moved on from the contracted player. With the Buffalo Bills signing tight end Dawson Knox to a (at face value) four-year, $53.6 million extension that puts him under team control through 2026, the matter of value (and specifically, the value at the tight end position) has come up again in the NFL. And for the first time in a LONG time, the conversation about a tight end involves the Buffalo Bills.

When someone says an NFL contract was (in hindsight) a “bad” contract, they typically mean that the return on investment (ROI) was negative. As such, when evaluating a contract at the time of its signing, I’m looking at the probability of a positive ROI versus the probability of a negative ROI and the ranges of possible outcomes within both the positive and negative ROI spaces. Essentially, what is the likelihood of a good or a bad outcome, and how reasonably good or bad could it get?

When I look at the Dawson Knox contract through that lens, I struggle to come up with a compelling and passionate argument against it. The tight end position is so monetarily undervalued relative to other positions that the monetary risk associated with signing a young player like Knox and having them plateau or regress is minimal. The current top tight end contract in terms of average annual value (AAV) belongs to George Kittle at $15 million. The new Knox contract places the Buffalo Bills in sixth place at $13.4 million AAV. Compare that to the sixth-highest-paid players by AAV at other positions:

QB - Josh Allen, $43 million

RB - Nick Chubb, $12.2 million

WR - Stefon Diggs, $24 million

OT - Brian O’Neill, $18.5 million

G - Laken Tomlinson, $13.33 million

C - Chase Roullier, $10.125 million

EDGE - Leonard Williams, $21 million

DT - Kenny Clark, $17.5 million

LB - Deon Jones - $14.25 million

CB - Xavien Howard, $18 million

S - Budda Baker, $14.75 million

Eight of the 11 position groups outlined have their sixth-highest-paid player making more than Dawson Knox in AAV. The tight end market might be the next to explode after the receiver market did so in 2021, but it hasn’t happened yet. So, until it does, tight ends will continue to be important pieces that a team can get under contract for less money from a market standpoint relative to other positions. Getting the QB position right from a contractual standpoint is important. The dead-cap hits for Kyler Murray’s new contract in the first three years are $110 million, $97.5 million, and $81 million. Having Murray struggle would seriously impact the Arizona Cardinals’ ability to maneuver if they wanted to move on. That contract, as Andrew Brandt would put it, is a “three years and we’ll see” contract. Likewise, the A.J. Brown deal with Philadelphia carries dead-cap hits in the first three years of $40 million, $34 million, and $26 million. Another “three years and we’ll see” deal. But even without knowing the exact specifics of Knox’s contract, we can look at the most recent tight end deal before Knox. That is of course David Njoku, whose dead-cap hits are $25 million, $13.6 million, and $6.8 million in years 1-3. Reviewing Njoku’s deal, we can see that the financial ramifications of a player becoming a player you’d like to part ways with early in the deal aren’t nearly as taxing when that player is a tight end.

But what about the upside? What if the tight end market does take off? Dalton Schultz, Mike Gesicki, Darren Waller, and T.J. Hockenson could all sign new contracts in the new calendar year. Plus, if Darren Waller starts the ball rolling by setting a new market high (which he did as this piece was being edited), Dawson Knox could be the ninth-highest-paid tight end in football before his extension even kicks in. He doesn’t have to be the most productive tight end in football to live up to that contract. What could become the ninth-highest-paid tight end is going to end up at Laken Tomlinson-levels of pay: not a restrictive contract if it goes sub optimally and a plus value contract if it goes well.

And it absolutely can go well. Tight end has historically been a slow-developing position in the NFL and there would be a reasonable explanation as to why it would go particularly slowly for Dawson Knox. A converted quarterback who was asked to do so little at Ole Miss in terms of receiving but possesses all the ability in the world? Dawson Knox, from a developmental and tools standpoint, is the Josh Allen of tight ends. He has less of a development curve than a basketball player brought in to play the position solely for his gifts as we’ve seen happen before in the NFL, but not by much. The idea that Knox could develop further based upon where he started vs where he is currently is not a far-fetched idea and some might even say further development is probable.

The bad isn’t that bad, and the good could be great. Sounds like a pretty solid risk to take.

...and that’s way the cookie crumbles. I’m Bruce Nolan with Buffalo Rumblings. You can find me on Twitter @BruceExclusive and look for new episodes of “The Bruce Exclusive” every Thursday on the Buffalo Rumblings podcast network!