This is the second part of a series on the Steelers' salary cap issues, and the moves we can expect them to either contemplate or make before March 13 - the start of the league's 2012 year - and after it. Previously, we explored candidates whom will be asked to take a pay cut, which players will have their salaries restructured and what we can expect in Restricted Free Agency.
Poison Pills
In relation to NFL contracts, the term "Poison Pill" means a clause in a qualifying offer from another team that would make it extremely difficult for the original team to match. For example, let's say the Minnesota Vikings offer Wallace a 5-year, $50 million contract, but 100 percent of contract is guaranteed if Wallace is on the roster for five games in which the team plays at Heinz Field in 2012.
If Wallace is agreeable to that deal, he signs what's called an offer sheet. That means if the Steelers do not match the offer the Vikings made him, word-for-word and dollar-for-dollar, the offer sheet becomes a valid contract. It's nothing until Wallace signs the offer sheet, but after he signs it, the Steelers would be forced to match it exactly. Another offer cannot be made.
Since no other team (except the University of Pittsburgh) will play five games at Heinz Field this year, in order for the Steelers to match that offer, they would have to guarantee Wallace $50 million over five years. There's no chance the Steelers would do that, and while they would receive a first-round draft pick in return (the likely tender level Wallace will receive), using such tactics isn't in the spirit of good faith negotiations, and it undermines the collectively bargained restricted free agency process.
There's been a lot of pushback on agents for using that tactic, but there's no concrete rule prohibiting it. In the end, it doesn't seem likely Wallace or any of the Steelers RFAs would permit such tactics due to the unethical nature of it.
An Extension for Wallace
The possibility of Wallace being offered elsewhere, though, exists, albeit unlikely. The team will look to lessen some of the blow of the likely $2.7 million hit they'll have to guarantee Wallace this season if he plays through his RFA contract by signing him to a long-term deal.
In three seasons, Wallace leads active receivers with 18.7 yards per catch, and while that figure is positive, it won't help as much in his contract negotiations as it may seem, considering second and third on that list are Devery Henderson (4 years, $12 million in 2009) and Malcolm Floyd (2 years, $5 million in 2011). He fits in comparably with Green Bay's Greg Jennings (4 years $26 million), but has 100 less receiving yards in three more games during the years of Jennings' contract. Wallace has increased his catches per year in each of the last two years, and still remains one of the best - if not the best - big play receiver in the NFL.
A rough estimate of $7 million per season isn't a bad guess. Spacing signing and roster bonuses out over the life of the contract, and keeping it off the first year of the deal, could save the Steelers some cash as well.
Franchise and Transition Tag
The odds of any Steeler getting the franchise tag this year are very low. There isn't an unrestricted free agent who's worthy of the average salary of the top five (Franchise Tag) or top 10 (Transition Tag) players at his position.
This is likely the last season they'll avoid using it for a while, though. In the coming years, the slew of young talent they have will hit unrestricted free agency, and keeping all of them will require the use of one or both tags.
Wallace, if not given an extension, will be a very likely candidate in 2013. RB Rashard Mendenhall also faces the possibility of getting it next year. WR Antonio Brown will play the last year of his three-year rookie contract in 2012, will hit restricted free agency in 2013 and will be tag-eligible in 2014. Maurkice Pouncey is a free agent in 2015.
The business of the game is such that teams need to keep talented and inexpensive players coming through their system at all times. The ability to recognize which players to keep among your "core" group (i.e. the guys who will earn extensions) is the difference between consistent success and repeated failure.
The best teams in the salary cap era (Pittsburgh, New England, Indianapolis) have held true to this philosophy, and have kept their core group between 11 and 13 guys. The bulk of their cap space is used on these players, and the rest of the money is spent on young, emerging talent or low-price free agents to fill roles in all three phases of the game.
The real axiom in the salary cap era is "what goes up, must come down." Getting a slew of highly talented players now means you're more likely to face a down season in the future. Those players will eventually hit free agency and it will be difficult to keep them. This is why the league has the franchise tag. It plays the player a significant amount of money, but only in the event a team cannot come to agreement on a long-term deal.
The fact the dollar amount is so high, and the fact it's fully guaranteed, deters teams from using it as standard operating procedure. It's going to really hurt any team's cap situation to continuously use the franchise tag, and the Steelers' infrequent use of it (OT Max Starks in 2009 was the last one to get it) in comparison to the amount of long-term extensions they've given (LaMarr Woodley, Ike Taylor, Troy Polamalu, James Harrison, Lawrence Timmons) is evidence to that.
But with all those defensive players signed, the offense will be in a similar position starting next year, and if Wallace, Brown, Mendenhall and Pouncey wish to avoid being tagged (One year for $7 million is obviously worse than five years for $20 million) they're going to have to fight hard for that big extension.
It'll be very difficult to get all of them to long-term deals within that time frame, but the Steelers have managed to keep their core group intact for several years. It stands to reason they can do it again.
Part III is a comprehensive look into the Steelers' players currently set for unrestricted free agency, which begins March 13.