Armchair GM: Harvin’s Opportunity Cost

By Max Partlo

If you follow a host of NFL writers on twitter, as I do, you probably read some snarky tweets about how the Seahawks paid over $18 Million for 8 games out of Percy Harvin, or how they traded a first, third, and seventh round pick for a player they then let go of for a conditional sixth round pick. And, yeah, the Seahawks did screw this one up: they traded the opportunity to pick up talented young players on cheap contracts in order to acquire an injury prone receiver who had never accumulated 1000 yards in a season and gave him an expensive long term contract. But keeping Harvin exclusively because of how much he cost to get would have disregarded the simple economic principle of sunk costs. The picks sent out, or the sunk costs, are irrelevant in future decision making. All that matters is what is best in the future. And in order to understand why Seattle thought that Harvin was not in the team’s best interest in the team’s future, we must look at a different principle of economics: opportunity cost. The question that John Schneider, the Seahawks’ GM, had to ask himself was not “was Harvin worth what the Seahawks gave up to get him?” Instead, Schneider had to decide whether Harvin was worth what Seattle would have to give up in order to keep him. The reason that Seattle came to decide that he was not worth it becomes clear when we look at the contracts for some of the key players on Seattle’s roster.

Cap Hit
Year/Player 2013 2014 2015 2016
Z. Miller $11,000,000 $3,887,500 $4,000,000 Unsigned
R. Okung $9,540,000 $11,240,000 $7,280,000 Unsigned
M. Lynch $8,500,000 $8,000,000 $8,500,000 Unsigned
P. Harvin $4,900,000 $6,929,412 $7,200,000 $0
M. Bennett $4,800,000 $4,000,000 $8,000,000 $7,000,000
K. Chancellor $3,878,404 $5,825,000 $5,550,000 $6,100,000
C. Avril $3,750,000 $9,250,000 Unsigned Unsigned
E. Thomas $2,898,215 $7,373,212 $7,400,000 $9,900,000
B. Wagner $979,045 $1,174,854 $1,370,663 Unsigned
R. Wilson $681,085 $817,302 $954,519 Unsigned
R. Sherman $600,606 $3,676,706 $12,200,000 $14,769,000

First off, the portion of Harvin’s contract that is shown in red indicates the dead money that Harvin will count against Seattle’s cap now that he has moved on to the Jets. Second of all, it is easy to see how cheap contracts for mid-round picks Wagner, Wilson, and Sherman allowed the Seahawks to spend a little bit more at other positions, such as defensive end, with talents such as Avril and Bennett, who came in as free agents last summer. Bennett has since resigned to a more lucrative extension, as have Sherman and Thomas, while other key players have expiring contracts coming up. In order to better demonstrate how Harvin’s trade was necessary to pave the way for cap security in the future, let’s take a look at the same data in the form of a graph.

Screen Shot 2014-11-03 at 10.58.40 AM

The lines get a bit jumbled, but the trends are pretty identifiable. Richard Sherman and Earl Thomas’ curves (black and red respectively) make pretty significant jumps, and the two will make an average of around $12.5 Million in the 2016 season. Kam Chancellor and Michael Bennett (green and blue) also have pretty expensive deals, which continue into the 2016 season, while key contributors Russell Okung (orange), Marshawn Lynch (grey), Bobby Wagner, and Russell Wilson (brown and dark grey at the bottom) will need new contracts going into 2016.[1] This, coincidentally, is the season in which Harvin (the yellow curve) will stop counting against the Seahawk’s cap. It’s not a coincidence at all, actually, as this is precisely why the Seahawks decided to move on from Harvin when they did. Harvin is very talented[2], but the Seahawks don’t find his talent worth nearly $10 Million in cap space during an offseason where Russell Wilson alone will likely require $20 Million a year. Even if we assume that the Seahawks don’t bring back Lynch, we can use similar players to Wilson, Wagner, and Okung [3], who have signed recent extensions, to predict cap hits that are probably close to what these three young stars would cost. If we take $20 Million for Wilson, $10 Million for Okung, and $7 Million for Wagner, the three cost a combined $37 Million a year. Added to the four biggest salaries already on the books for 2016, that’s $73 Million for 7 players, or nearly half of the cap[4]. The Seahawks have done well as a result of cap flexibility and great drafting in the later rounds. Harvin, for all of his talent, would have brought this figure closer to $83 Million for 8 players, and that leaves nowhere near enough money to field solid depth at the positions around this core of players. Trading for Percy Harvin added a dynamic young player to a talented young team with Super Bowl aspirations, but it turned out that the team was already pretty dang good, even with Harvin missing almost all of the year, and he wasn’t worth the investment for Seattle, regardless of what they gave up to get him. Parting with Harvin now allows the Seahawks to make sure that they have as much cap space as possible when 2016 rolls around, and resigning Russell Wilson is definitely worth giving up Percy Harvin, even if it is a couple of years down the road.

[1] Wagner and Wilson specifically, will require massive raises over their current, dirt cheap, rookie contracts. One could argue that this could be partially mitigated by the possibility of moving on from Lynch, but resigning your star left tackle, middle linebacker, and quarterback, will always take up a lot of cap space.

[2] He still has the skill set that convinced the Seahawks to make their original investment in him.

[3] Colin Kaepernick at $19 Million, Ryan Clady at $10 Million, and Sean Lee at $7 Million. Wilson’s ring makes him worth a bit more than Kaepernick, but these are pretty solid comparisons in terms of age and talent.

[4] Not including cap hits of more than $5 Million each for Doug Baldwin and Max Unger.

Leave a Reply