Report: Chiefs Likely To Franchise Justin Houston

A report from Jason LaCanfora suggests the Kansas City Chiefs will likely give all-Pro linebacker Justin Houston the franchise tag before the start of the new league year in March.

Here’s part of what he wrote:

"[T]he Chiefs will franchise him, according to league sources, all the while knowing their cap situation is tight. The sides got nowhere close on a long-term deal and this could be the rare case where Houston is franchised two years in a row at a premium."

A few things to unpack here so let’s get to it.

Giving Houston the franchise tag was expected. LaCanfora projects the tag number to about $13.08 million for a linebacker, assuming a $142 million salary cap. We discussed a few days ago that Houston was likely going to get a tag before maybe agreeing to a new contract by the July 15 cutoff date. Tagging Houston seemed to be the most guaranteed thing to happen this offseason besides letting Mike McGlynn walk.

One thing LaCanfora mentions is the prospect of the Chiefs using the franchise tag on Houston again in 2016. This seems more like a negotiation tactic than anything else. Projections suggestion Houston in line for a five-year, $90-plus million contract if he were to sign a new deal this offseason. At $13.08 million franchise tag, that’s about $5 million in savings for the Chiefs against the cap. In other words it makes more sense for the Chiefs to just tag him the next year as opposed to paying Houston while he’s at his highest value.

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All of the weight is on Houston to get a deal done. Players want security and the promise of guaranteed money. Two years under the franchise tag means 32 more games of risk to injury while trying to maintain a near historic level of pass pressure. Now is the time to cash in for Houston, and it may be a while before he realizes his negotiating power isn’t has high as he thinks it is.

One would imagine Houston agrees to a deal sometime this summer. If he doesn’t that’s a massive risk for Houston to take heading into 2015.

The other thing to note here is the projected tag number for quarterbacks. LaCanfora estimates that number to be at $18.38 million for the 2015 season. Alex Smith is scheduled to cost $15.6 million and $17.8 million against the cap over the next two seasons.

There was an argument last offseason that the Chiefs would be better off franchising Smith each of the next two seasons and give Houston the money designated for Smith. What we know now is the Chiefs likely saved several million in cap space by doing the opposite.

Houston’s asking price has reportedly been very high since the Chiefs started negotiations around this time last year. That number has only gone up since Houston’s 22-sack season and earned stature as one of the game’s best pass rushers. Had the Chiefs saved the tag for Smith then Kansas City would have had to give Houston the $90 million deal it is thought he is asking for in negotiations. That would put Houston and Smith at a combined $36.83 million in salary cap space.

By giving Smith his deal – a deal the Chiefs can easily get out of after the 2016 season – the Chiefs are likely to pay Smith and Houston a combined $33.6 million in cap space for 2015. That $3.23 million in cap savings is probably the difference in the Chiefs keeping Rodney Hudson as opposed to letting him walk.

One last thing: The Chiefs are in very good shape with their salary cap beyond the 2015 season. Over The Cap projects the Chiefs to have about $64 million in cap space for 2016. A franchise tag for Houston plus new deals for Dontari Poe (has a cheap 2016 option the Chiefs can exercise) and Eric Berry (who may not be re-signed) will eat into some of that as well as this year’s draft class, but there’s also the high likelihood Dwayne Bowe and Anthony Fasano’s contracts will be off the board heading into 2016, too.

That projected cap space is also under the assumption of an extremely conservative $150 million salary cap. Some think that cap number may be much closer to $160 million than $150 million. Kansas City is about to have a ton of cap space plus a youthful roster very soon. Cap space isn’t the issue for the Chiefs so much as making sure they don’t saddle themselves with an overvalued contract to cut into the future salary cap advantage.

When you zoom out a bit, John Dorsey’s plan makes a ton of sense. It’s just a matter of executing it at this point.

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