Dec 29, 2013; Oakland, CA, USA; Oakland Raiders defensive end Lamarr Houston (99) reacts during the game against the Denver Broncos at Coliseum. The Broncos won 34-14. Mandatory Credit: Kirby Lee-USA TODAY Sports

Oakland Raiders: Breaking down the franchise tag drama

On the day after the NFL’s deadline for franchise tags, JBB Podcast cohost (and economics insider) Rory Anderson breaks down the Raiders decision to not use the franchise tag on Lamarr Houston/Jared Veldheer. 

At four p.m. eastern standard time all teams in the NFL had to have their franchise and salary tags submitted to the league in order for their rights to those tagged players to go into effect. There were not as many total tags this year and Raiders General Manager Reggie McKenzie used neither tag. Raider Nation was set ablaze by such inaction and ultimate paranoia began to set in. Many Raiders fan began talking about firing Reggie and trying to explain why he is so stupid and doesn’t deserve to be a general manager. Even outside of Raider Nation the national media took pot shots at Reggie McKenzie culminating in posting in their “Around The League” blog a post by Chris Wesseling, whom in fairness has been very kind to the Raiders in the last year, but which read like the typical inside-the-box rhetoric you always tend to hear.

I pride myself on being an out-of-the-box thinker even to points where I have few or even no backing whatsoever from Raider Nation and I will say before I even approach the main subject manner, many readers are no going to like what I am going to write. You will call me “stupid” and lambaste me in the comment section which is your right and feel free to do so, but I will stick by any words I put out there.

Right now fans and media people are making assumptions that make sense although they may be false, and misunderstanding how negotiations are to function with both sides have dramatically different views on value.

Assumption 1: Tags Lead to Long Term Contracts

This is a common misrepresentation of reality. Franchise tags are a 50-50 proposition where the end result can be a long term deal as frequently as it could be a one year reprieve. Take Jairus Byrd for instance or even Brandon Albert, both players are young and highly talented coming off franchise tag years and now are looking for big pay days on the open market. To add to this, the time frame to sign a player to a long term deal after receiving the franchise tag is June 15th which means that window can close on a team before an agreement is reached. The real harm actually comes from applying the tag because it simply ignores the actual core issue which is both sides disagree on compensation and no team is going to sign a franchised player because it would cost them two first round picks along with a heaping pile of cash. How is that a solution? Yes a team retains control of a player, but if value is disputed and you have no way for a player to seek his value and set the market then what good is delaying the inevitable?

In fact last year eight players received the franchise tag and of those players seven were non special teams players. Only one of the players, Ryan Clady got a long term contract after signing his tender.

Assumption 2: Not Tagging a Player Means He is Free

As you can see this is the exact opposite as the previous assumption. The NFL has designed its free agency period to be an advantage to prudent franchises trying to retain their own players. By allowing players to negotiate with teams beginning March 8th, players in contract negotiations with their home teams where both sides disagree on value can test the market receiving offers from around the league and most importantly allowing the home team to see how the player is valued. This is how the table is set when one side refuses to acknowledge recent contracts or precedence. Ultimately, by receiving contract offers the home team can meet or beat any offers and in the end save money by only outbidding the next team just enough to sign the player to avoid massive overpayment. It is a win-win situation.

Assumption 3: The Players Want to Remain Raiders

The fact is regardless of what is said in the press, we as fans have no idea what the negotiation is like and neither side is going to burn bridges because it is bad for business. I have learned the NFL is about interpersonal relationships and those relationships can make or break both an agent and a general manager. We simply do not see what is actually occurring and we instead assume one side is failing the other.

Assumption 4: The Raiders Want the Players

Why do we assume the team wants either player? Yes they are both young and talented but are they superstars? No neither is even a pro bowler. Veldheer is a mountain of a man that struggles with nimble speed rushers with counter moves while Houston is an end in a 34 defense which is not a highly paid position. Houston only had six sacks this season and neither prospect is even unanimously agreed to be the best in his prospective position group for free agents. Furthermore, Houston has intimated that there is a disagreement between he and the Raiders staff regarding how to use him and if what I have heard from some is true and the team wants more 34 personnel to fit into a hybrid 43 scheme then they can replace his production and role both easily and cheaply. Lastly, if that is the case, he has made it clear he wants to be more of a 43 end in order to get sacks which mean the Raiders scheme may not even be good for him. Again, in the end nobody at this time knows outside of Reggie McKenzie and Dennis Allen.

What Economics Teaches Us

Here is where I get into the meat of my article. There is a principle in economics called “the broken window fallacy” and this principle points out the falsehood behind the premise that simply spending money is a healthy way to get an economy moving. The fallacy sets up a scenario in which the government needs to get the economy moving so they break the window of a store owner in order to get him to pay someone to clean it up and someone else to replace it. They point out that such action creates two jobs. The fallacy arises when you ask a simple question, “What could the shop owner have done with that money had he not been forced to clean up and buy a new window”?

The tangential lesson here is simple: Just because you don’t spend money in one area which creates an issue, doesn’t mean you cannot spend it in other areas fixing other issues. This idea that the Raiders must resign these two players and then add more is a falsehood. The key driver here is value and assumption #4 ties into it. Say the Raiders do not view either player as scheme fits, then of course their values regarding those players will go down. They may see both players as worth seven million dollars whereas other teams may view them as a combined $20 million dollars per year.

Let us take that number of $20 million dollars per year for both players, the breakdown is irrelevant. For that same number the Raiders could sign Jairus Byrd a ball hawking free safety for $8.5 million, Geoff Schwartz a solid starting left guard for 6 million, and Henry Melton a talented 43 defensive tackle who is a sack machine inside with a versatile skill set that could play in 34 gap concepts but is coming off an ACL injury for $5.5 million dollars. Now in this case the Raiders for the same price have in fact solved three positional needs for the price of two. Add in any combination of other players such as Alterraun Verner or Sam Shields, Everson Griffen, Michael Johnson or Michael Bennett, Clinton McDonald or Mike Neal, Arthur Jones and any others you may want and now you can fill in the lost production from the leaving of Lamarr Houston.

At this point we still have not addressed left tackle where Veldheer’s absence would be felt. The Raiders’ brass may instead prefer a free agent left tackle such as Albert or Monroe, but most likely the Raiders would draft a left tackle in round one since there are two fantastic prospects that should be available at five. That may annoy some, but as I said before, if you have filled more positions than you have lost and you have done it more efficiently, have you really lost? From a value standpoint, absolutely not.


I get it, some of you fans simply will not agree with me. That’s fine, I am used to it. However what needs to be given respect is the idea that the players on this roster are not amazing. They are young and talented, but they are in no way irreplaceable. This is not Al’s football team and these are not Reggie’s players and we as fans do not know what is happening behind closed doors. Reggie is not stupid and any person who says he is needs to check their ego at the door, but he does have a plan and he will execute that plan until he no longer is employed by the Raiders. Some of you won’t like that plan, but it doesn’t mean it isn’t a worthy plan. Hopefully this article will get you thinking more about the nuances of things rather than lashing out in all directions and that goes for national media as well as fans.

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Tags: Jared Veldheer Lamarr Houston Oakland Raiders

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