LA Chargers: Breaking down the finances of a Henry extension

Unless Hunter Henry is franchise tagged by the LA Chargers again, he will hit the open market in March. There’s been a lot of discussion about what type of deal he’ll get. Spotrac‘s Market Value function currently has him getting a 4-year contract at $43.8 million — $10.95 million per season.

That would be lower than the extensions of George Kittle and Travis Kelce last year, but more expensive than Austin Hooper and Kyle Rudolph’s contracts. On paper, that’s a fair evaluation of Henry. $11-12 million per year falls in the sweet spot.

It’s not a contract that smashes open the tight end market like Kittle’s was, but it properly acknowledges Henry’s skill and ability at the position.

Spotrac averaged those four recent TE extensions I mentioned and got about $12.3 million in average annual value. With $10.9 million being his market value on Spotrac, that $12.3 average is probably his ceiling. A fair compromise, in that case, might be a slightly higher deal than Spotrac’s average at 4 years, $45 million.

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Years and average annual value do matter in negotiations, but another sticking point will be guaranteed money. Tight ends get beat up in the NFL as we’ve seen with Henry, George Kittle, and Zach Ertz. Guaranteed money is the real money on a contract given to any player. That may be especially true for tight ends who put their hands in the dirt more often than running backs or receivers.

Kittle received the most guaranteed money on a tight end contract of all time with $40 million dollars. Considering we’re talking about Henry’s total contract value being not much more than $40 million, I think you can forget about that kind of a guaranteed number.

How much should the LA Chargers guarantee Hunter Henry?

Looking at the guarantees for Hooper and Kelce’s contracts provides a more reasonable baseline though. Both tight ends were guaranteed $23 million in their deals last year.  That seems very doable for the LA Chargers and would likely pay Henry his guaranteed money within the first two years of the deal.

All of this still applies even if the franchise tag is slapped on Henry in a few weeks. The pressure would still be on the Chargers to reach a long-term extension like they did in 2016 with Melvin Ingram.

Letting Henry play on the tag for a second straight year would not be wise in my opinion, especially since it can only be used twice. If Los Angeles views Henry as their tight end for the next four or five years, getting a deal done before July would be crucial if Tom Telesco applies the tag.

A four-year, $45 million deal with $20+ million guaranteed is what the Chargers should be aiming for with their free-agent tight end.