Inside the Pats' thinking, financials behind Hernandez's release
As a front office executive, the period between the June minicamp and the start of training camp was always the time of year when I worried most about our players. It presents a volatile mix of young, high-profile people with time, money and their last true freedom before the six-month grind of the season. I would cringe when answering the phone from an unknown number, ready to hear of various mishaps of our players, some more troubling than others. All of them, however, seem quite benign today compared to the news that greeted me today upon a return from Europe: "Aaron Hernandez arrested and charged with murder."
The Patriots moved quickly after Hernandez's Wednesday arrest, releasing the 23-year-old tight end. Here are the ramifications the team had to consider -- and still must going forward -- in making that call.
My sense is that the Patriots -- through their own security, sources and the police report -- knew details of this case before we did and had made a decision to move on from Hernandez days before the actual arrest. They pride themselves as being a team cloaked in integrity and owner Robert Kraft's concern with brand reliability does not jive with Hernandez remaining an active member of the team.
Similarly, I remember once in Green Bay being notified of a player's serious encounter with the law, although not a murder charge. We looked at the information and decided, at that moment, that there was no way on God's green earth that the player would play for us again. The transaction/release was made soon after that.
Since the initial news reports about the homicide, there have been reports of other character issues with Hernandez, including a report that he may have been involved in another murder in 2012. Those character concerns are interesting, as the Patriots chose to reward Hernandez with a major contract extension last year after only two years in the league. Whatever those issues were, the Patriots were either unaware or unconcerned about them prior to awarding him a deal that included a $12.5 million bonus.
There have been times when teams find out new things about a player that they have no history with, usually unrestricted free agents. Here, however, there was familiarity. Hernandez was in the facility for two years; he had been around the players, coaches, trainers, equipment men, security guys, etc. They knew him. Of course, no one could anticipate a murder charge, but they made a large bet that Hernandez would be a core player for their future. Well, so much for that.
As to recovery of that $12.5 million bonus, whatever chances they had for such recoupment may have vanished the moment they released Hernandez. It is considerably more difficult to recoup bonus money from a contract that has been terminated than from one still in effect.
While $9.25 million of the bonus has already been paid, and probably long since spent, there is a remaining deferred payment of $3.25 million next March. Although the Patriots may not have a legal right to that money, they may claim a moral right to that money.
There is also the matter of guaranteed salary both this year ($1.323 million) and next ($1.2 million) along with a $500,000 guaranteed workout bonus next year. Many contracts, including all rookie deals, have language that voids future guarantees based on conduct violations/suspensions/failure to report, etc. although there are reports that this language is not present in Hernandez's deal. Beyond the contract language, however, I would not be surprised if the Patriots, with advice and counsel from the NFL Management Council, use broad language in either the contract or the CBA and withhold payment, inviting Hernandez, his agent and the NFLPA to file a grievance to receive it.
As for the cap hit, that is now already on the books upon Hernandez's release. The Patriots will have a $5.1 million charge this year and $7.5 million next year. In the event there is some recovery of previously paid bonus or nonpayment of bonus or guaranteed salaries, those amounts can be lowered, but for now they are significant.
Of course, sunk costs and future cap hits were secondary in the Patriots concern here. Within an hour of Hernandez being led away from his home in handcuffs, the Patriots shed him from their organization, cash and cap ramifications be damned.