Labor Pains, Part I
As to the ongoing dispute between the NFL and Ezekiel Elliott, there is not much more to say than what I repeatedly say in this space: pro football has a 10-year labor agreement, but we have never had labor peace. The only time the NFL and NFLPA seem to communicate is through lawyers at arbitrations and court proceedings. Now it is Ezekiel Elliott caught in the crossfire.
In case anyone hasn’t been paying attention for the last 10 years, Roger Goodell has made player conduct a priority and has no intention of changing that. The union knew this before the 2011 CBA and it will know it before the 2021 CBA. Elliott’s saga will play out, as did Rice’s (win for union) and Peterson and Brady (wins for the NFL) but we will always get back to where we started: the CBA. No amount of billable hours for Jeffrey Kessler will change that.
Labor Pains, Part II
Labor Day weekend always has meant the same thing for the NFL: a significant reduction in the league’s labor force. That reduction was much greater this year with the change to a single cutdown, forcing the removal of more than 1,100 players from NFL rosters. While teams and coaches lauded the new rule—every coach wants all the practice bodies he can get—I really don’t see any good in this for players, other than the thousands earned for the additional week. Most of these players played significant minutes in the fourth preseason game and, no matter how well they performed, were going to be cut hours later. Although some of these players will return to practice squads or be claimed, it illustrates the lack of a true professional football alternative for players. As a former general manager in the NFL’s now-defunct World League, I wrote in this space before about the need for some kind of developmental league.
Both as an agent and a team executive, I always hated Labor Day weekend. It is a stark time in the business of football, with the overriding mantra of: so many players, so few jobs.
Perhaps the most interesting cut was the most expensive one. Brock Osweiler was shed by the Browns despite having $16 million guaranteed for 2017 as part of the free-agent contract he signed with the Texans last year. The Browns shopped Osweiler around the league, even offering to pay part of the $16 million, but there were no takers. Now he is back with the Broncos, who lost out in the free-agent bidding to Houston last year. And while the Broncos get him on the cheap—for $775,000—the Browns will pay him the remaining $15,225,000 to not play for them.
When the Osweiler trade happened, I wrote that Moneyball had entered the NFL, with a team taking on a bad contract to acquire a future asset (a second-round pick). My enthusiasm was tempered, however, with the realization of how rare future guarantees are in the NFL. Fans and media marveled this weekend at the fact that Osweiler will earn most of his bloated salary from the Browns. Of course, the NFL dumps players with future (nonguaranteed) salaries virtually every day of the year; teams rarely deal with future guarantees. In the NBA, Major League Baseball and even the NHL, players are routinely released with guaranteed money remaining on the contract; it is part of the teams’ cost of doing business. Last month, the Boston Red Sox released Pablo Sandoval with $48 million remaining on his contract, three times the amount owed Osweiler.
Once again, when it comes to player compensation, NFL players, compared to those in other major sports, are sitting at the children’s table.
In the frenzy of transactions leading into the season that happens every year, there was one contract signing that should make anyone interested in the business of football stand up and take notice.
Matthew Stafford’s new contract establishes new standards for 1) average per year ($27 million); 2) total guarantee ($92 million); 3) guarantee at signing ($60.5 million) and 4) signing bonus ($50 million). And speaking of that eye-popping $50 million signing bonus, its payment terms— $17 million by Sept. 15; $16.5 million by Nov. 15 and $16.5 million by Feb. 15—ensure he has all of it within five months! The deal locks in a striking $86 million by the beginning of its second year, comparing favorably to recent deals for Derek Carr ($47 million) and Andrew Luck ($60 million). In NFL terms, this is a true megadeal.
As those who read this column know, I have been hoping/waiting for a player with extreme leverage—such as Stafford—to request/demand a fully guaranteed deal. And with the Lions giving Stafford a $50 million signing bonus, a fully guaranteed deal doesn’t seem like that much of a stretch. But alas, it is not happening and it probably will not until a quarterback such as Stafford becomes a true free agent (the franchise tag takes usually prevents that). Having said that, I am comforted by 1) largest guarantee in NFL history, $92 million, and 2) $10 million roster bonuses in each of the last two unsecured years which lock in those years in March. Simply, Stafford’s deal is the closest we have ever come to a fully guaranteed significant veteran contract.
In addition to being a superlative talent and the most important player on the Lions for almost a decade, Stafford is fortunate to be born at the right time—he became a top overall pick in the NFL draft when these contracts were some of the best in the history of the league, rookie or veteran. The contracts not only contained oversized guarantees but later years with enormous salary cap numbers, forcing restructures and renegotiations favorable to the player. With the leverage from that initial rookie contract, Stafford and agent Tom Condon wrangled a strong extension a few years ago, and with the leverage of that deal expiring after this season, forged this new historic contract.
Regarding quarterback pay in general, let’s debunk a couple of myths. First, increases for top quarterbacks are not outlandish as some suggest; if anything they are underwhelming. I negotiated the first $100 million contract in the NFL, for the Packers with Brett Favre, at an average of about $11 million per year. Sixteen years later, Stafford has an average of either $27 million (the new money over five years) or $25.25 million (including the sixth year). Increases of roughly $1 million per year for the most important position in the sport are very reasonable for teams.
The other myth consistently repeated is “teams can’t build rosters with quarterbacks making so much!” Well, yes they can. NFL teams have salary cap and player contract personnel (as I was for 10 years) to ensure the football operations can build the team they want without concern for cap issues. And the inconvenient truth is, despite mandated spending minimums, most teams are not even spending to the cap. These teams are worth billions of dollars and receiving almost $250 million from the league distribution before earning any local revenue; they can afford paying top quarterbacks $20 million dollars or so, roughly 12% of the salary cap. Finally, with roughly half of NFL rosters on fixed and reasonable rookie contracts, the idea that teams can’t pay their quarterbacks top dollar without sacrificing their team is pure folly.
Spinning back to Stafford, he comes into this season, at age 29, having earned $111 million in his first eight NFL seasons. Were he to play out this contract, he will have earned $262.5 million in the NFL by age 35, with another potential major extension ahead. For comparison purposes, Tom Brady, now 40, has earned $196 million over 17 seasons. Stafford’s birth year, pedigree and his agent’s negotiating acumen have made him a rich man—perhaps he’ll one day go down as the richest ever to play the game. In a business titled toward ownership, Stafford is a rare winner in the business of football.
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