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Surplus Value, 2nd Contracts, & Our FA's


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The more I think about BB and his options with Hightower, Ryan, Butler... the more confused I get. I can see a scenario where he brings them all back, brings 1 or 2 back, or lets all 3 walk (after Butler plays out his deal + tag). The reason is because of the surplus value you get with contracts for upper tier guys coming off their rookie deals.

Baseball can measure surplus value of a contract by using WAR (Wins Above Replacement). But football doesn't have such a metric due to the inherent differences in the games... those inherent differences also make me take every PFF ranking/stat with a gigantic chunk of salt. Baseball is a succession of individual 1-on-1's in similar circumstances. Many constants and few variables. Large samples of data because starters have 600 outcomes/year on offense. That is easy to study scientifically. Football is all situational... down and distance, scheme, exploiting matchups, effectiveness of pass rush on CB play, quality of in-game adjustments by coaching staff... you can go on and on and all impacts production/performance of a player. Data samples are small.

So I don't think there is a metric that can compare the value of a contract with a player's impact on a team. Too many variables to model and be accurate. But we know from our eye test that Edelman has outplayed his contract. Gronk too. Branch. We can go on and on. But those 1st 2 guys were extended early which cost them a shot at true market value later (the team took on some risk), and Branch was a vet cut seemingly on the downside of his career. Those are obvious surplus values, and there are many more I didn't mention.

But what about our only current market value guys on his 2nd contract... Solder & McCourty? DMc is the better argument given his consistent, durable Pro Bowl quality play thru his 2nd contract so far. About all we could ask for when he signed on the dotted line. But the question is... has this near perfect outcome produced any surplus value? If you pay a guy to be a top Safety in the game, he has to be a top Safety in the game to make it worthwhile. Unless he is head and shoulders above the next guy, there may not actually be any surplus value with McCourty. Not a knock on him at all, just trying to make the point that you need a near perfect outcome to make a top of the market contract worth it. And even then you likely only get even value... little/no opportunity for upside. If there was an accurate metric for surplus value, I think the Pats would lead the league by a good margin, and much of that comes from players other than those we fans salivate after like Hightower, Ryan, Butler.

BB paid McCourty because he was stuck... there was nothing in the cupboard that had a prayer of doing the job. You can abandon the quest for value here and there when need trumps value by a healthy margin. It worked, and it might work again with 1/2/3 of the key 2nd contract guys. But I question whether the cupboard is bare at those positions like it was with McCourty. None of us fans can evaluate if there is another Malcolm Butler ready to emerge at CB or LB, but the Pats probably know. They may see something different in the under-contract group of KVN, McLellin, Roberts, Freeny than we do. We all thought they were nuts going with what they had at OL going into the 2014 SB year.

Lots more to expand on, but this has already gotten long... main point is, the more I think about it, the more I wonder if the possibility is turning into likelihood of letting Hightower and Ryan walk, and taking their 3rd round comp picks (Ryan may be 4th, should be close) rather than hoping for health and even value on those deals in the best case scenario. They still have plenty of time to decide on anything with Butler unless he agrees to an early extension that makes both sides happy. Thoughts?
 
I see this interesting post and that you have been here a long time with so few and wonder "why don't you post more?". :p

You have a very good point. When you pay a guy top money he can rarely exceed your expectations. McCourty for example when all is said and done will over the course of his contract be paid like a top 5 safety on average. I think he has exceeded his pay only slightly. At the time of the signing I think he was the top paid Safety per year in the NFL by a hair but in the past year years that has changed just a it.

It is true that when you sign guys to top contracts you will likely never get a huge steal. In fact you are more likely yo get someone who under preforms on his contract. That being said there is the other side to consider. When you sign so many mid level contracts tryin to get steals you get a lot of players that under preform too. McClennin and Freeny for example but under preformed on their deals.

When you get guys you can usually sign to low contracts like Branch, McClennin and Freeny they are usually risky bets in some sense as they have some question mark. While this strategy gets you steals it also gets you a lot of bust with wasted money. However the way to look at it is that your upside is bigger than your potential down side. The distance from JAG and base contract is smaller than star player contract. So your risk is small and payoff can be big.

So why not do this every time if it on the whole gets you value? Cause you do need top tier players to win. The most you are ever likely to get on these contracts are pretty good value players. To get a top tier player almost always you need to either sign a big contract or have a rookie develop into one. If you go for just trying to get good deals and guys on rookie deals you will likely never have enough elite players to put you over the top. The 2016 structure of the teams is an aberration more than the norm even for the Pats.

In 2014 they paid Revis 12M for 1 year (even though spaced over 2) and Browner 5M for 1 year. McCourty was being paid a good amount in his final year too. The first time they won in years was a year where they went out and signed big contracts to get top tier guys. So it is hard to fault that method too.
 
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The more I think about BB and his options with Hightower, Ryan, Butler... the more confused I get. I can see a scenario where he brings them all back, brings 1 or 2 back, or lets all 3 walk (after Butler plays out his deal + tag). The reason is because of the surplus value you get with contracts for upper tier guys coming off their rookie deals.

Baseball can measure surplus value of a contract by using WAR (Wins Above Replacement). But football doesn't have such a metric due to the inherent differences in the games... those inherent differences also make me take every PFF ranking/stat with a gigantic chunk of salt. Baseball is a succession of individual 1-on-1's in similar circumstances. Many constants and few variables. Large samples of data because starters have 600 outcomes/year on offense. That is easy to study scientifically. Football is all situational... down and distance, scheme, exploiting matchups, effectiveness of pass rush on CB play, quality of in-game adjustments by coaching staff... you can go on and on and all impacts production/performance of a player. Data samples are small.

So I don't think there is a metric that can compare the value of a contract with a player's impact on a team. Too many variables to model and be accurate. But we know from our eye test that Edelman has outplayed his contract. Gronk too. Branch. We can go on and on. But those 1st 2 guys were extended early which cost them a shot at true market value later (the team took on some risk), and Branch was a vet cut seemingly on the downside of his career. Those are obvious surplus values, and there are many more I didn't mention.

But what about our only current market value guys on his 2nd contract... Solder & McCourty? DMc is the better argument given his consistent, durable Pro Bowl quality play thru his 2nd contract so far. About all we could ask for when he signed on the dotted line. But the question is... has this near perfect outcome produced any surplus value? If you pay a guy to be a top Safety in the game, he has to be a top Safety in the game to make it worthwhile. Unless he is head and shoulders above the next guy, there may not actually be any surplus value with McCourty. Not a knock on him at all, just trying to make the point that you need a near perfect outcome to make a top of the market contract worth it. And even then you likely only get even value... little/no opportunity for upside. If there was an accurate metric for surplus value, I think the Pats would lead the league by a good margin, and much of that comes from players other than those we fans salivate after like Hightower, Ryan, Butler.

BB paid McCourty because he was stuck... there was nothing in the cupboard that had a prayer of doing the job. You can abandon the quest for value here and there when need trumps value by a healthy margin. It worked, and it might work again with 1/2/3 of the key 2nd contract guys. But I question whether the cupboard is bare at those positions like it was with McCourty. None of us fans can evaluate if there is another Malcolm Butler ready to emerge at CB or LB, but the Pats probably know. They may see something different in the under-contract group of KVN, McLellin, Roberts, Freeny than we do. We all thought they were nuts going with what they had at OL going into the 2014 SB year.

Lots more to expand on, but this has already gotten long... main point is, the more I think about it, the more I wonder if the possibility is turning into likelihood of letting Hightower and Ryan walk, and taking their 3rd round comp picks (Ryan may be 4th, should be close) rather than hoping for health and even value on those deals in the best case scenario. They still have plenty of time to decide on anything with Butler unless he agrees to an early extension that makes both sides happy. Thoughts?
If you look at the 2014 defense and the 2016 defense it's a great illustration of your position.
Virtually every player from the 2014 team who's contract expired in between (or was upcoming) other than McCourt you left and someone else was found.
Revis, wilfork, jones, Collins ayers browner.
All of them pretty much ended up with contracts where it was impossible for them to have more value than cost.
 
If you look at the 2014 defense and the 2016 defense it's a great illustration of your position.
Virtually every player from the 2014 team who's contract expired in between (or was upcoming) other than McCourt you left and someone else was found.
Revis, wilfork, jones, Collins ayers browner.
All of them pretty much ended up with contracts where it was impossible for them to have more value than cost.

The decisions were perhaps more obvious/justifiable in past years to fans because of the lack of cap space to then do other things. This year there is an anomaly where there is plenty of room to do whatever they want/need to do. But I think that available cap space may change the mindset of us fans more than it does BB. His mantra of quality depth reeks of surplus value. Fortunately for Pats fans, there isn't a metric to educate everyone play his form of Moneyball... BB gets to play it without risk of less skilled GM's drafting behind his race car.

A possible result of letting Hightower and Ryan both walk is setting up a franchise year for Jimmy G should Brady get hurt or show any signs of being mortal in 2017. Not saying likely, but I wouldn't put it past him to go against the grain in such a unique situation knowing that you just can't win in this league without a top tier QB.

Choices, choices... what a privilege it is to be a fan of this team and franchise.
 
The decisions were perhaps more obvious/justifiable in past years to fans because of the lack of cap space to then do other things. This year there is an anomaly where there is plenty of room to do whatever they want/need to do. But I think that available cap space may change the mindset of us fans more than it does BB. His mantra of quality depth reeks of surplus value. Fortunately for Pats fans, there isn't a metric to educate everyone play his form of Moneyball... BB gets to play it without risk of less skilled GM's drafting behind his race car.

A possible result of letting Hightower and Ryan both walk is setting up a franchise year for Jimmy G should Brady get hurt or show any signs of being mortal in 2017. Not saying likely, but I wouldn't put it past him to go against the grain in such a unique situation knowing that you just can't win in this league without a top tier QB.

Choices, choices... what a privilege it is to be a fan of this team and franchise.
Oh we are going to spend a lot. And I think Hightower and butler stay.
I think with all the cap space we may see more shorter deals with higher hits but less dead money down the road, something that we've done more of lately. It's easier to deal with the misses that way.
 
Great post. I had not thought of overall player value in that way before.

Hard to measure Hightower's leadership on the field. And I'm not sure there's a metric that would accurately measure stopping Lynch on the half yard line or the strip sack of Matt Ryan. My gut says that Hightower will get a decent contract because of the tangibles he brings which indirectly adds player value to the other that play around him because of his on and off field leadership.
 
So why not do this every time if it on the whole gets you value? Cause you do need top tier players to win. The most you are ever likely to get on these contracts are pretty good value players. To get a top tier player almost always you need to either sign a big contract or have a rookie develop into one. If you go for just trying to get good deals and guys on rookie deals you will likely never have enough elite players to put you over the top. The 2016 structure of the teams is an aberration more than the norm even for the Pats.

In 2014 they paid Revis 12M for 1 year (even though spaced over 2) and Browner 5M for 1 year. McCourty was being paid a good amount in his final year too. The first time they won in years was a year where they went out and signed big contracts to get top tier guys. So it is hard to fault that method too.

Great point... agree 100%. If BB could retain all 3 at market value for only 1 yr at a time I think he probably would. Easier to see what you'll get from a guy next yr than 3 yrs down the road. But back to the premise of your comment that is spot on about having top tier players...

The question then is if this current team has enough top tier players to still be competitive for a title. Or do they need to retain 1 or more of those 3 key guys? (I do not list Bennett because I like what is in FA for TE2 plus great draft for TE... I have already mentally moved on) The reality is they still have Butler for 2 more years if they tag him. I think the secondary is fine in short term without Ryan and we will surely draft another one in a good CB draft.

On defense, you have DMc, Butler, an emerging star in Flowers, an intriguing guy in VV (would love to be a fly on the wall in their player eval discussions on him).

Offensively, this is the best WR group we've had since '07 because it stretches the field horizontally and vertically. Can make you pay for jamming at the line.

Gimme Doyle, Tamme, or Griffin as a receiving TE, or Sims as blocker+receiver, and couple with a draft pick in a loaded draft and I feel great about that position. I'd love an athletic upgrade to the power back role, but I think we'll see Blount back. Getting the real Dion back after a year removed from ACL will be huge since Blount/White tip the run/pass preference. OL is good and has upside.

I think we can win without Hightower, Ryan. The Seahawks are the posterchild for the opposite approach having success... there is no one way to do it. But that Stars and Scrubs approach is much more leveraged by injury as we saw this year, and places greater emphasis on drafting and developing the lesser talents... all with more downstream consequences when coaching/development can't get those scrubs to be league average depth options. They have taken a hit in the trenches on both sides of the ball to afford their fantastic core.

Some guys prefer the sexy unpredictable girl, others prefer the dependable marrying type. Depends on where you are in your fandom...
 
Great post. I had not thought of overall player value in that way before.

Hard to measure Hightower's leadership on the field. And I'm not sure there's a metric that would accurately measure stopping Lynch on the half yard line or the strip sack of Matt Ryan. My gut says that Hightower will get a decent contract because of the tangibles he brings which indirectly adds player value to the other that play around him because of his on and off field leadership.

Absolutely... I am not trying to argue for not bringing him back. I love a player of his obvious intelligence and toughness. Just trying to justify why he might not be back. A top market deal with that shoulder's history makes getting even value out of that contract less likely. A Mayo/Warren 2nd contract experience may be more likely and that would be a big miss.

And I agree with Andy's comment... paying market value on the short term deals, especially when they involve prime years, is good business. The misses are smaller misses... sprinkle in a few high ceiling guys with an abundance of low ceiling/high floor guys and you have the New England Patriots. The market inequity involving those low ceiling/high floor guys creates a ton of surplus value. There are misses in that group for sure, but they are cheap to get out of. Trading a 5th (?) for Mychal Kendricks and dumping McClellin could be a great cap spend and huge on-field upgrade at that position for the next 3 yrs.
 
Great point... agree 100%. If BB could retain all 3 at market value for only 1 yr at a time I think he probably would. Easier to see what you'll get from a guy next yr than 3 yrs down the road. But back to the premise of your comment that is spot on about having top tier players...

The question then is if this current team has enough top tier players to still be competitive for a title. Or do they need to retain 1 or more of those 3 key guys? (I do not list Bennett because I like what is in FA for TE2 plus great draft for TE... I have already mentally moved on) The reality is they still have Butler for 2 more years if they tag him. I think the secondary is fine in short term without Ryan and we will surely draft another one in a good CB draft.

On defense, you have DMc, Butler, an emerging star in Flowers, an intriguing guy in VV (would love to be a fly on the wall in their player eval discussions on him).

Offensively, this is the best WR group we've had since '07 because it stretches the field horizontally and vertically. Can make you pay for jamming at the line.

Gimme Doyle, Tamme, or Griffin as a receiving TE, or Sims as blocker+receiver, and couple with a draft pick in a loaded draft and I feel great about that position. I'd love an athletic upgrade to the power back role, but I think we'll see Blount back. Getting the real Dion back after a year removed from ACL will be huge since Blount/White tip the run/pass preference. OL is good and has upside.

I think we can win without Hightower, Ryan. The Seahawks are the posterchild for the opposite approach having success... there is no one way to do it. But that Stars and Scrubs approach is much more leveraged by injury as we saw this year, and places greater emphasis on drafting and developing the lesser talents... all with more downstream consequences when coaching/development can't get those scrubs to be league average depth options. They have taken a hit in the trenches on both sides of the ball to afford their fantastic core.

Some guys prefer the sexy unpredictable girl, others prefer the dependable marrying type. Depends on where you are in your fandom...

Good point and I would agree Seattle is closer a poster child for the point I made but I don't want us to be Seattle either. I think they went too far the other direction and sacrificed too much. You need top tier players to win but you also just can't go all in on your top tier. You need depth too. So if you need to let a few top guys walk to keep that quality depth that is what you do. The reason why Seattle's style has not worked has had a lot to do with their drafting. When you invest a lot of your cap in top tier guys (probably more than you should) you need to draft well to make up for your lack of depth and their drafts between 2013-2015 have not been good. Of course they didn't have a first round pick either of those 3 years but still.

They just did not get enough good young cheap players and their depth has suffered. out of all their top 100 picks in those years only 1 guy I think has been worth his pick so far (Frank Clark). That just won't cut it. I think their trade for Graham was a big mistake too. IT goes without saying no matter what you do without drafting well it all falls apart. The reason we have seen this Patriots resurgence is cause of good drafts overall since after 2009.
 
Absolutely... I am not trying to argue for not bringing him back. I love a player of his obvious intelligence and toughness. Just trying to justify why he might not be back. A top market deal with that shoulder's history makes getting even value out of that contract less likely. A Mayo/Warren 2nd contract experience may be more likely and that would be a big miss.

And I agree with Andy's comment... paying market value on the short term deals, especially when they involve prime years, is good business. The misses are smaller misses... sprinkle in a few high ceiling guys with an abundance of low ceiling/high floor guys and you have the New England Patriots. The market inequity involving those low ceiling/high floor guys creates a ton of surplus value. There are misses in that group for sure, but they are cheap to get out of. Trading a 5th (?) for Mychal Kendricks and dumping McClellin could be a great cap spend and huge on-field upgrade at that position for the next 3 yrs.

I understood your post. It's a great way to think about value. I didn't mean to imply that you were arguing not bringing him back because I knew you weren't. I was trying to add to your point regarding a player's value by including other immeasurables.

For example, You sign Hightower to a max deal which means there will most likely be little surplus or upside from a value standpoint but in turn Van Noy (or any mid value contract guy) plays better because of Hightower's guidance or leadership. So Hightower may add surplus value to the team in other ways that would justify his max contract.
 
There's a lot of good points (surplus value) in the OP, but I think the one thing that was a bit off was that the Patriots have made the decision to let anyone walk. I don't think that's true.

I think BB has a number in mind which corresponds to the principles of the OP. There is a value we are comfortable with, which provides an overall surplus of value to the team. If we can't sign someone to that number, we won't.

But I don't think we're not going to try to sign those guys because they won't provide a certain surplus of value. The Patriots made offers to Collins and Hightower, they just didn't reach an agreement.

Overall though, the team does take a lot of low-risk, high-reward chances. Which is why it drives me nuts when fans are posting about "THIS GUY IS A JAG" or "HE'S TOO OLD," based on what he did before. Not all those guys work out, but think about it like investments. You pay $1M for a low-risk player and he busts. You pay $1M for another low-risk player, and he produces like a $5M player. That means if 1 in 5 work out, it evens out.

We see 2 or 3 of those 5 work out, producing tons of surplus value, but some fans can only point to the 2 or 3 that didn't work out and call BB stupid. It was like that when we acquired Andre Carter ($2.25M), Mark Anderson ($1.375M), and Shaun Ellis ($4M) in 2011. For around $7.5M, we got 21 sacks from the trio, but all season long, it seemed a small group would only ***** about Ellis sucking and how BB was a moron for acquiring him.

Not every pass gets completed, not every transaction works out. But the concept of trying to find undervalued assets is one worth doing, and is one of the keys to our success. It's also why we rarely venture into the first day or two of free agency, as there's not many good deals out there at that time.
 
For example, You sign Hightower to a max deal which means there will most likely be little surplus or upside from a value standpoint but in turn Van Noy (or any mid value contract guy) plays better because of Hightower's guidance or leadership. So Hightower may add surplus value to the team in other ways that would justify his max contract.

Ahhh, gotcha... I was the one who misinterpreted a post!

Spot on... and reason #237 why metrics cannot measure the impact of a football player the way it can in baseball. Baseball players have locker room impact too, but can Mike Trout make players around him on the field better than even a top caliber Center with the demands on his communication?

I think your point goes even further with Butler. Having a legit shutdown guy allows Patricia to mix and match and game plan so much more than otherwise. Butler in man on their #1... or man on their #2 with a better short field physical matchup on their #1 with safety help over the top? We've seen this with Talib-Revis-Butler after years of having a more compromised range of options. When you have a shutdown CB, I think you do what you can to retain him thru his peak years. Tony's argument for surplus value trickling thru the rest of the roster becomes clearer when coaches have game plan advantages due to one guy's presence on the roster vs his replacement.

If I had to choose one, I go Butler because he is harder to replace than Hightower, and allows the defense to be more creative in pregame planning, and in turn reactive within game. He has also been more durable. But would I mind seeing both back? Heck no.
 
I disagree.

Attempts to apply economic principles ("moneyball") that work for baseball are not useful in football because they ignore some facts about football that are much less true of baseball.

Basically, there is no "surplus value" as such in football; a player's value depends on context -- there is only value-to-team-x and value-to-team-y.

Baseball players go to bat on their own against a pretty standard range of pitchers, so there isn't a question of how suitable a player is for a particular scheme. Football is completely different. See under Vrabel, M.

And, even beyond that, experience in a scheme creates its own value, even where two players are, in principle (ex ante, as economists say) equally suited to the same scheme. You have to cost in the expense of the new player's learning if you replace an equally suitable player with a new one.

Take Michael Floyd. There's no question that he's a very talented player, but he had very little value for the Patriots in the short time he was here because he simply had no time to learn and get accustomed to the scheme and the rhythm of the offense.

Add to that the adverse selection that comes from information asymmetry -- economist's language for the fact that the team a player is currently with will know a lot more about him than any team thinking of signing him. In a world of perfect rationality, signing teams should price in the uncertainty, but that is not the NFL. Hence someone (usually a bad team with a poor front office) can almost always be found who will overpay.

The information asymmetry can be about what kind of a teammate a player is and how well he takes coaching, but my guess is that the most important thing in the NFL is having an accurate picture of a player's fitness and long-term health. I remember being told that, yes, obviously Julian Edelman is "injury-prone" because he's had a lot of injuries. But there's a world of difference between the injuries that are inevitably a part of a collision sport and those that are chronic. Being able to tell reasonably accurately what a player's future prospects are plays a huge role.

The most that economic reasoning can tell you, then, I think, is that, other things being equal, it is a good policy not to make a splash in free agency and to concentrate on signing your own players -- the ones you would like to keep -- early. Not much to go on, though I think that Pittsburgh has done pretty well with that policy.

BB, of course, breaks (or re-makes) all the rules, and who are we mere mortals to quarrel with him?

He actually likes to churn his team from season to season, which makes sense given how successful they have been. How better to get a team that won a Super Bowl motivated than by filling it with new faces? It's striking how he doesn't even talk about it being the same team from season to season. But, though he signs a lot of free agents and makes a lot of trades, it's rare for him to make a huge signing of a top free agent. And he's quick to cut bait if it's not working out.
 
Attempts to apply economic principles ("moneyball") that work for baseball are not useful in football because they ignore some facts about football that are much less true of baseball.

He stated as much in the OP.

Basically, there is no "surplus value" as such in football; a player's value depends on context -- there is only value-to-team-x and value-to-team-y.

He was specifically discussing team value, a player's value to that team and not the entire league.

If BB signed Hightower to a five year five million dollar contract we would think he had fantastic surplus value because we understand BB could now spend more on other positions. Value is in relation to how well a team uses its salary cap. Great player signs for cheap = surplus value. Great player signs for maximum = no surplus value.
 
He stated as much in the OP.

And at that point, I'm afraid, the words lost any precise meaning.

He was specifically discussing team value, a player's value to that team and not the entire league.

If BB signed Hightower to a five year five million dollar contract we would think he had fantastic surplus value because we understand BB could now spend more on other positions. Value is in relation to how well a team uses its salary cap. Great player signs for cheap = surplus value. Great player signs for maximum = no surplus value.

Well, yes, but what is "for cheap"?

It just comes down to the triviality that everyone has to decide for themselves what something is going to be worth to them, and sometimes they're very happy with the results (e.g. Edelman) and sometimes disappointed (e.g. Amendola). To say that they "outplayed their contract" just means that the team would have been happy to pay more. You don't need a degree from MIT to say that.
 
Reiss hits on this point in today's post.

An area of improvement for Patriots in 2017: Can they be better after bye?

4. Two quotes from the past season that seem appropriate to revisit as the new league year approaches on March 9, and what to expect from the Patriots:

Jonathan Kraft (via 98.5 The Sports Hub, Feb. 5): "In Bill, we have a coach who is as good at the X's and O's as anybody who has ever coached the game, but then he has an intellect that allows him to understand how to manage value. Unlike most coaches, he doesn't get emotionally attached to either athleticism or just this need. At some point, there's just always somebody else. He might not be as good as this player, 'but if I can get him talent level to dollar value -- the equation that it's in my mind -- to a point where I've left enough cap room to go out and find another piece to make my roster deeper, I'll figure out how to coach it up.' It's an amazing skill."

Bill Belichick (via news conference, Sept. 30): "I don't think you can be afraid of free agency. It's not like if a guy gets to free agency you can't re-sign him. You're in a competitive market but, you know, you're in a competitive market anyway."
 
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