NFL Contracts

[Warhammer]

Why have so many talking heads started to say that the NFL needs guaranteed contracts? I don't get this. The big reason why the NFL is the #1 league in sports is because contracts are not guaranteed. Players have to perform or they are going to get their asses cut!

[henry296]

Why have so many talking heads started to say that the NFL needs guaranteed contracts? I don't get this. The big reason why the NFL is the #1 league in sports is because contracts are not guaranteed. Players have to perform or they are going to get their asses cut!

A couple of reasons:

1. Eliminates backloaded contracts that inflates the value of contracts. This increase in salary is a major cause of holdouts and renegotiations because players fear being released. They want to translate that future risky salary into a guaranteed money and therefore either holdout or demand to renegotiate.

2. Shorter overall contracts would result. This could be a good deal for the players as they have the opportunity to test the free agent waters more frequently.

Todd

[Solecismic]

This would effectively destroy the salary cap as it is now. I have no idea how they'd make the transition.

I hope the respective leaders of the owners and the players understand that this needs to be taken slowly and players paid under the old system need to play out their contracts if it's going to get done.

[Samdari]

Why have so many talking heads started to say that the NFL needs guaranteed contracts?

Umm, Drew Rosenhaus is saying this. I have heard very few in the sports media agree with him. What talking heads are you talking about that think anything in the NFL needs changing?

[Warhammer]

Stephen A. Smith was talking about it for one, another was Daryn Perry (whatever his name is)on tsn.com, Mike Greenberg this morning. It's just all of a sudden everywhere I look people are talking about it. Granted most of these guys are schmucks, but still...

[HomerJSimpson]

Umm, Drew Rosenhaus is saying this. I have heard very few in the sports media agree with him. What talking heads are you talking about that think anything in the NFL needs changing?


And doe anyone really believe Rosenhaus would not encourage his players to hold out even with guarenteed contrcts? Dream on.

[rkmsuf]

Stephen A. Smith was talking about it for one.


wurd

[Mustang]

NFL does pretty much have guaranteed contracts. They are called signing bonuses. Want a guaranteed $30Mil contract, sign a 5 year deal with base salaries of 750K and make the rest a signing bonus.

Of course, people like Peter Brown (god I hate him on the local radio..) who talk about how the poor, poor players could be cut at a whim seem to forget this little thing.

[kcchief19]

I see it being six of one, half dozen of another. I agree with Jim regarding the volatile impact a drastic change like this would have on the cap and economics of the game. If the move goes in that direction, it needs to be done carefully.

There's plenty of guaranteed money in the current system. In fact, the agents have swung the pendulum so far that they have made base salaries almost entirely meaningless. All that matters is the bonus. There's good news/bad news in that for both sides.

I think it is utterly amazing how much power NFL agents have. The impact of agents in hockey and basketball are negligble -- heck, in the NBA about the only thing an agent can negotiate are the activities you're not allowed to do in the offseason -- and baseball's agents really only have clout when it comes to first round draft picks and players entering their first free agency market. In the NFL, it's nuts, particularly in regards to the draft. The GMs are no picnic themselves, but the agents are just insane.

[jbmagic]

yep

In the future your going to see players ask for higher signing bonus in case their cut. they are guaranteed that bonus money.


should there be a cap for signing bonus?

[HomerJSimpson]

yep

In the future your going to see players ask for higher signing bonus in case their cut. they are guaranteed that bonus money.


should there be a cap for signing bonus?

Nope. If a team is willing to cut its own throat by paying huge signing bonuses, then tough dookey.

[Mustang]

Actually, I forgot about the Deion Sanders rule where the first 3 years of the contract must equal the prorated portion.. so, you couldn't do a $200K contract w/50Mil signing bonus...

but, still...

[General Mike]

Granted most of these guys are schmucks

Bingo!

If the NFL went to guananteed contracts, the most anybody would get is a 3 year deal, and they wouldn't get nearly as much money.

[Klinglerware]

Bingo!

If the NFL went to guananteed contracts, the most anybody would get is a 3 year deal, and they wouldn't get nearly as much money.

Then why wouldn't ownership push for this?

[rkmsuf]

Then why wouldn't ownership push for this?


Game would suck if they did that. Suddendly the prospect of playing with that sore shoulder doesn't look so good.

[PSUColonel]

The problem that players face is a case of the haves vs. the have nots. Players who coomand big contracts don't need to worry about the future since the bonus money is more than enough for any reasonable person to live on for life. The problems are for those players who don't coomand big money. The signing bonuses they get are nice, butusually only a small percentage of the ovrall contract, which of course is not guaranteed. There are far more players in the league wo fal into the have not category than the "haves". Do I support guaranteed deals? NO WAY!!. I'm with Jim on this one, itwould foul up the salary cap so bad it woudn't be funny. Also remember this: Fotball is a violent game, and injuries are common. If players had guaranteed contracts, teams would be unable to cut players whoare no longer servicable, and the money would still cout against the cap, wich in turn would result in teams with seriously diminished talent levels.

[cthomer5000]

No. No, No, No, No, Nononononononn, NO.


No.


Just, NO.

[Greyroofoo]

I'd definitely take a "minimum" nfl contract compared to what I make anyday

[Vinatieri for Prez]

Since the NHL will have a cap AND guaranteed contracts, it will be interesting to see what happens. Although the NBA is already evidence of this. Trading guys for nothing in return just to dump salary.

By the way, all the commentators saying "but the owners don't honor the contract" are morons. First, under the collective bargaining agreement, essentially each contract has a provision in it giving the team the option to cut a guy. In return for something like that the players are getting the huge chunk of NFL revenue they are getting. In addition, the commentators conveniently leave out the issue of the signing bonus. I mean don't the Eagles get credit for dropping a big signing bonus on him just LAST year. And finally, teams need to be cut some slack. For every guy they are supposedly underpaying, they are overpaying for another one (who got a big bonus an then fizzled - so even the ability to cut the guy doesn't help).

It's interesting that only the player/agents moan about this inequity. You will never hear it from the NFLPA because they know the real deal. I am not sure if it is still on their website, but the NFLPA had a very interesting article and statistical breakdown that showed the current growth in bonus money essentially gave players just as good guaranteed money as in other leagues with guaranteed contracts. So Rosenhaus, put a sock in it!

T.O. should just be happy he was even allowed to fight the Baltimore trade. He blew the deadline and was cut some slack -- but the NFL gives an inch, and he wants to take a mile.

Edit: Here are the links I am talking about. Remember, THESE ARE FROM THE NFLPA WEBSITE, and talk about annual misperception of NFL contracts that are vocalized every February. They are a very good read.

hxxp://www.nflpa.com/PDFs/Shared/Media_Misperceptions.pdf

hxxp://www.nflpa.com/PDFs/Shared/Guaranteed_Contracts.pdf

So, enough of this crap from the media and agents, PLEASE!

[Peregrine]

Nice links there, and definitely sums up the way things really work. With bonus money getting more and more important, I think the guaranteed contract talk will die down in future years, at least I hope so.

[Raiders Army]

The weird thing about all of this is that the player's union doesn't chime in at all. Shouldn't they be weighing in on holdouts and such?

[Tara]

Really great Post and links. Very usefull for understandig someting and have things clearer...Thanks Vinatieri for Prez!!!

[albionmoonlight]

I agree that the current system works better than any of the other four leagues. And the NFLPA does seem to be on board with it. I wonder, though, if some of these high profile agents may start whispering in their clients' ears that their real beef is with the NFLPA--trying to replace the current union leadership with a more aggressive braintrust. That would be a big mistake, IMO, but I can see the uber-agents possibly making a play for it.

[Samdari]

I agree that the current system works better than any of the other four leagues. And the NFLPA does seem to be on board with it. I wonder, though, if some of these high profile agents may start whispering in their clients' ears that their real beef is with the NFLPA--trying to replace the current union leadership with a more aggressive braintrust. That would be a big mistake, IMO, but I can see the uber-agents possibly making a play for it.

It would be a huge mistake. The NFLPA is right when it claims that forging a partnership with the owners - as opposed to other unions which seem to be continuously adversarial - has greatly benefitted both the owners and players.

And backloaded contracts benefit the player, something they seem to conveniently forget when holding out, as getting cut (unless at the end of one's career) would tend to benefit a player, as he is now eligible for another signing bonus, which is where NFL players get paid.

I think if T.O. wants out of Philly that bad, he should offer to pay back 6/7 of his signing bonus from last year. That was what Philly intended to pay him for 7 years, he seems to think that's what he shold be paid for one. Moron.

[QuikSand]

The fundamental flaw in all this "debate" (which I agree is essentially all being started by Rosenhaus) is the assertion that "the system is broken."

No. No. No.

The "system" in the NFL works great. FAR, FAR, FAR better than anything in any of the various sports with guaranteed contracts -- the margin is so vast that it renders counterarguments patently absurd. The NFL has the best of all worlds -- most players get non-guaranteed contracts and have to perform to continue getting paid; players have the option to add incentives, thereby encouraging good performance for added compensation; superior players with demand in the market are able to command a sizable portion of their contract guaranteed (signing bonus); teams are not shackled long-term to contracts for players who substantially under-perform... and if they are, it's because they deliberately took that optional risk (with a large signing bonus).

Really the only significant downsides of this system are:

(1) The "appearance" of huge contracts that never come to fruition. A team tacks on a couple monster salary years to a veteran's deal -- it gives him a nice headline, and a claim that he signed a $60 million deal. I don't really understand why anyone cares about this -- after all, it's not what the headline says, but what the bottom line says that matters. If that "six years $60 million" eventually turns into three years and $14 million... who the hell cares what was in USA Today three years ago? Somebody else's agent? Spare me.

(2) The increased number of veteran players who are cut by their current teams. It happens for a variety of reasons - but the most common is the contract that is reasonable for two or three years, and then spikes upward -- all negotiated by both sides at its inception. If the player doesn't get renegotiated, it ends up with him being cut in advance of the big salary jump. Some fans seem to get terribly angered or confused by this -- but in practice, it really isn't any different than your team signing him for a two or three year eal in the first place, and then losing him as a free agent afterward. That scenario doesn't seem to bother people all that much, but the mid-contract cut seems to tweak a chord of injustice with some fans and writers... causing the NFL system to seem callous to them. I disagree -- and I don't think it's fair to try and build the system around people who are unable to understand it.

[Samdari]

A team tacks on a couple monster salary years to a veteran's deal -- it gives him a nice headline, and a claim that he signed a $60 million deal. I don't really understand why anyone cares about this -- after all, it's not what the headline says, but what the bottom line says that matters. If that "six years $60 million" eventually turns into three years and $14 million... who the hell cares what was in USA Today three years ago?

I actually wonder if the only people who care are those in the media who do not understand what is going on. I mean, the player, team and player's agent all knew when this deal was signed that it was really 3 years/$14 million. Those expensive years at the end allow the team to minimize the cap impact of the signing bonus for the three years, and virtually guarantee the player will be cut - and able to sign another deal with another signing bonus - after three years.

I agree with QS, what is the problem with that?

[albionmoonlight]

Part of the issue with the mis-informed general public comes from the use of the word "contract." In the world outside of the CBA, contracts are generally not breakable without penalty. If you and I sign a contract so that I will give you X and you will give me Y--we generally are obligated to do that to which we agreed. I can't take Y from you and then refuse to give you X without consequences.

In the NFL world, however, contracts all come under the CBA--which changes the rules. It incorporates into all of the player contracts certain provisions--the most notable of which is the fact that the team can cut the player and not be on the hook for his base salary. As Quik has pointed out several times--every team and every agent/player knows this going in. Any agent who claims that he did not know that his player could be cut should be more worried about the impending negligence lawsuits from his clients than anything.

But, when we call these things that players sign "contracts," the general public beleives that they should operate like contracts outside of the CBA. And they get confused when they do not. Some confusion would be eliminated if they were called "NFL special player agreements" or "Bezzleduffordens" or some other word that did not carry the baggage of "contract."

[Klinglerware]

Part of the issue with the mis-informed general public comes from the use of the word "contract." In the world outside of the CBA, contracts are generally not breakable without penalty. If you and I sign a contract so that I will give you X and you will give me Y--we generally are obligated to do that to which we agreed. I can't take Y from you and then refuse to give you X without consequences.

In the NFL world, however, contracts all come under the CBA--which changes the rules. It incorporates into all of the player contracts certain provisions--the most notable of which is the fact that the team can cut the player and not be on the hook for his base salary. As Quik has pointed out several times--every team and every agent/player knows this going in. Any agent who claims that he did not know that his player could be cut should be more worried about the impending negligence lawsuits from his clients than anything.

But, when we call these things that players sign "contracts," the general public beleives that they should operate like contracts outside of the CBA. And they get confused when they do not. Some confusion would be eliminated if they were called "NFL special player agreements" or "Bezzleduffordens" or some other word that did not carry the baggage of "contract."

Just a question here, aren't employment contracts in the real world generally "at will"--i.e., your employer can terminate you, but you are free to leave at anytime. In that context, doesn't that mean that regular working schmos have more flexibility to seek better opportunities than professional athletes?

[albionmoonlight]

Just a question here, aren't employment contracts in the real world generally "at will"--i.e., your employer can terminate you, but you are free to leave at anytime. In that context, doesn't that mean that regular working schmos have more flexibility to seek better opportunities than professional athletes?
In most states, employment is "at will." Meaning that you don't have a contract at all. They hire you at will, and can fire you at will. You can leave at will. Most people work "at will" jobs.

Employment contracts tend to come up for executives and professionals--people whose unique fit for a particular job enables them to command a binding agreement from their employers.

[Crapshoot]

This would effectively destroy the salary cap as it is now. I have no idea how they'd make the transition.

I hope the respective leaders of the owners and the players understand that this needs to be taken slowly and players paid under the old system need to play out their contracts if it's going to get done.

Which would be a good thing. The Salary cap is a horrible concept.

[QuikSand]

I actually wonder if the only people who care are those in the media who do not understand what is going on.

To reinforce the notion that the media completely misses the point on NFL contracts and salaries, we can just await the annual "salary reports" from the likes of [u]USA Today[/i] -- where they show team salaries fluctuating wildly year to year, with a huge disparity between one year and the next.

What they are invariably reporting, of course, is the cash flow from the team to the players, rather than the practical cap impact (which matters much, much more). So, last year Philadelphia was shows as having paid Terrell Owens and Javon Kearse (a nice example) huge salaries, probably helping make them one of the "big spending" teams in the NFL. This year, now that those guys are on to the flatter part of their contracts... and it will look like Philly isn't spending jack on them, which as a practical matter is untrue.

[Crapshoot]

I'd definitely take a "minimum" nfl contract compared to what I make anyday

This arguement drives me nuts. You may be willing to take it, because your skils aren't worth that much in the market. How that affects someone who does have the skills I'm not sure.

[Blackadar]

Which would be a good thing. The Salary cap is a horrible concept.

Which is why you see virtually every major US sport pushing towards some version of it. :rolleyes:

[Blackadar]

This arguement drives me nuts. You may be willing to take it, because your skils aren't worth that much in the market. How that affects someone who does have the skills I'm not sure.

No, because I didn't win the "genetic lottery" that would allow me to be a 6 foot 4, 255 pound linebacker.

[Crapshoot]

No, because I didn't win the "genetic lottery" that would allow me to be a 6 foot 4, 255 pound linebacker.

Okay- should I take your paycheck because I didn't win the genetic lottery on "Sales schmoozing" ability ? :D

[Samdari]

The Salary cap is a horrible concept.

How so?

Perhaps in a short sighted thinking, "Get as much money as possible for a single player" point of view yes. But, in terms of evening out the talent level among all teams (the long stated goal of the NFL) it is a necesity, and that even talent level has (in part) led to an explosion in money available to players.

As the NFLPA loves to point out, player salaries (or, more accurately accoring to QS, monetary payments to players) have never grown as quickly as during the salary cap era, and neither have revenues.

Now, I know gambling and fantasy are external forces that likely influenced the revenue (and thus player cash flow) growth, I cannot help but think that the highly competitive nature of all NFL games has contributed to the NFL's popularity.

[Blackadar]

Okay- should I take your paycheck because I didn't win the genetic lottery on "Sales schmoozing" ability ? :D

Actually, if you'd like my sales paycheck, I can actually teach you how to earn it. Unlike the genetic lottery of many sports athletes, sales is nothing more than a method of conversation progression and can be taught to virtually anyone. I've always said I only need someone to have 4 characteristics to be successful in sales:

1. They must be intelligent. Not Mensa, but able to carry on a decent conversation.
2. They must be presentable. Not supermodel, but someone who can at least be neat and clean.
3. They must be motivated. Simply someone who wants to succeed.
4. They must be willing to learn. Comprehension for the win.

That's it...and I'd dare say that almost 50% of the working population can fit that description.

[QuikSand]

Which would be a good thing. The Salary cap is a horrible concept.

Absurd.

[Klinglerware]

In most states, employment is "at will." Meaning that you don't have a contract at all. They hire you at will, and can fire you at will. You can leave at will. Most people work "at will" jobs.

Employment contracts tend to come up for executives and professionals--people whose unique fit for a particular job enables them to command a binding agreement from their employers.

Okay, thanks for the clarification...