Should the Colts Extend Eric Ebron’s Contract?

In 2018, Eric Ebron was one of the top tight ends in the NFL. He finished with 66 catches for 750 yards and a whopping 13 touchdowns. He added 8 catches for 77 yards and a touchdown in two playoff games. His 66 catches and 750 yards rank him in the top 6 tight ends in the NFL and his 13 touchdowns ranked 2nd.

Ebron has one year remaining on his contract, and has a cap hit of $6,750,000. The Colts have been signing impending free agents well before they hit the market (Glowinski and Vinatieri), but will they bite on an extension for someone who has one year left on the contract? Before we break down what an extension might look like for Ebron, let’s consider the team’s options with regard to timing.

Scenario 1: Extend Him Now

If the Colts believe that Ebron will put up a similar or better season in terms of production, extending him now is best. Two strong seasons of production will warrant a higher contract/salary than just one, making it more cost-effective to sign him now. Also, regardless of production, contract sizes grow every year as the salary cap increases — meaning he’ll be a better long-term value in future seasons by locking in current values.

Scenario 2: Re-Sign Before He Hits the Market Next Season

If the Colts believe that Ebron will put up a less productive season, re-signing him next offseason might make the most sense. A drop in production would likely result in a drop in expected value in contract negotiations and give the Colts more leverage in negotiations.

Ebron’s Ceiling and Floor

By just about every measure, Ebron outperformed his contract in 2018-19. This may indicate that his average annual contract floor is his current average of $6,875,000. To evaluate his ceiling, we’ll look to similar players. Travis Kelce, Zach Ertz and Jordan Reed should provide some idea of what top tight ends can make in the NFL.

It’s worth noting that evaluating the contracts of these players doesn’t mean that Ebron is as talented.

Kelce, Ertz and Reed all signed deals in 2016 at an average annual value of $9.4M, $8.5M and $9.35M, respectively. After we account for the 22% increase in the salary cap, the present average annual value of their deals are $11.5M, $10.4M and $11.4M, respectively. These contracts average $11,100,000 per year. Since Ebron’s future contract shouldn’t exceed this number, we’ll set his ceiling at $11,100,000.

Contract Floor: $6,875,000

Contract Ceiling: $11,100,000

Ebron’s Value

In terms of catches and receiving yards, Ebron is similar to Charles Clay and Delanie Walker. In terms of his production in the red zone, Ebron is similar to Jimmy Graham. It’s important to compare the players at the time of the contract and not since the signing.

Charles Clay signed a 5 year, $38M contract in 2015. His annual average of $7.6M is worth $10.1M in today’s terms (calculated by the 32.6% increase in the salary cap since 2015).

Delanie Walker signed a 2 year, $17M contract extension in 2018. His annual average of $8.5M is worth $9.1M in today’s terms (calculated by the 7.3% increase in the salary cap since last season).

Jimmy Graham signed a 3 year, $30M contract extension in 2018. His annual average of $10M is worth $10.73M in today’s terms (calculated by the 7.3% increase in the salary cap since last season).

What these players have that Ebron doesn’t is consistent production over the 3 seasons prior to the signing of their contract. While 2018 was easily his best season, one that earned him Pro Bowl recognition and ranked in the top 5 of all players at his position, it would be hard to justify paying Ebron $10M per year when he has not consistently produced at the same levels.

I believe a two year extension worth $9,000,000 per year (18M total) is a fair price. It puts him in line with Delanie Walker’s extension and in the same ballpark are players who have consistently been the best in the league.

Is it Worth It Right Now?

I believe it is worth re-signing Ebron now because it will be his second season in Frank Reich’s offense. The team is young and should improve with more experience. With all of the core players and coaches returning, it is hard to imagine that Ebron will regress in a meaningful way. He is the team’s top red zone threat and even if the team improves at wide receiver, I doubt his role will change in that area of the field.

Ebron added another dynamic to the offense, he is still only 25 years old (he will be 26 at the start of next season) and can still get better in the offseason. He is an important piece to keep around and extending him now ensures that.