Restricted free-agent wide receiver Chris Hogan will sign a three-year, $12 million offer sheet Friday with the New England Patriots, sources told ESPN NFL Insider Adam Schefter, which will likely result in the Buffalo Bills’ fourth-leading receiver from last season joining an AFC East rival.
What does that mean for the Bills? Here are some thoughts:
It wouldn't be feasible for the Bills to match the offer: The Bills have five days to match the Patriots' offer sheet or they will lose Hogan without compensation. The Patriots engineered the offer so that it would be difficult for the Bills to match, structuring the contract so Hogan would have a $5.5 million cap hit in 2016, a source told Schefter. The Bills have about $4.5 million in cap space -- including Hogan's existing $1.67 million restricted-free-agent tender -- so the resulting $3.83 million additional charge for Hogan would nearly wipe out the Bills' cap space if they matched the offer. Unless the Bills are willing to clear cap space to match New England's offer, expect Hogan to join the Patriots.
Hogan is worth more to the Patriots than the Bills: Beyond the $5.5 million cap charge in 2016, the Patriots' offer is likely worth more than the Bills would be willing to pay Hogan, their No. 3 wide receiver the past two seasons. He has been a reliable role player on offense and a special teams contributor since joining in the team in 2012, yet his production (36 catches, 450 yards last season) can likely be replicated by a less-expensive player, especially in Buffalo's run-first offense. Meanwhile, Hogan brings more value to the Patriots and their system. He might only be worth $2 million per season for the Bills and fledgling quarterback Tyrod Taylor, but his production should rise when he's playing with Tom Brady in a scheme that emphasizes a precise, short-to-mid-range passing game. The Patriots are betting that those key differences will make Hogan worth the $4 million per season they're offering in his new deal.
This isn't the same as the Charles Clay situation: Last offseason, the Bills crafted an offer sheet to sign transition-tagged tight end Charles Clay away from the Miami Dolphins. The Bills included a large cap hit in 2016 (including a $10 million roster bonus) that was designed to deter Miami, which was short on projected 2016 cap space, from matching the offer. The Patriots are using a similar tactic on the Bills -- front-loading the deal to make it tough for Buffalo to match. I believed the Bills lost sight of Clay's value when they designed their offer sheet, and the Patriots risk doing the same with Hogan. The key difference was that the Bills' offer to Clay was much larger -- their deal included $24.5 million in guaranteed money -- while the Patriots are taking a more measured, smaller-money gamble with Hogan.
The Bills would have a wide-open race for No. 3 receiver: General manager Doug Whaley said at the Senior Bowl that the Bills could host a competition for their No. 2 receiver job, but later backed off those comments at the combine when he expressed confidence in Robert Woods. Instead, the Bills' true competition could happen at No. 3 receiver. Unless the Bills re-sign Percy Harvin or pick up another veteran receiver on the free-agent market, they will likely enter the draft with four veterans competing for the No. 3 job: Marquise Goodwin, Greg Salas, Greg Little and Jarrett Boykin. Adding a receiver in the draft is one possibility, although the Bills have more pressing needs at defensive end, outside linebacker and inside linebacker in the 3-4 scheme that Whaley recently said Rex Ryan will use more next season.
The Bills would have about $5.6 million in cap space: Not matching Hogan's offer would take about $1.67 million in cap space off the Bills' books. However, because of the "Top 51" rule, which dictates that only a team's top 51 salaries count against the cap, a player counting $525,000 will replace Hogan among the Top 51 salaries. That means the Bills' true savings against the cap by not matching Hogan's deal would be about $1.15 million, giving the team about $5.6 million in cap space. That might be enough to sign a veteran to a smaller deal, but the Bills still need to be careful to leave enough cap space to sign rookies and to replace injured players during the upcoming season.