Offseason Pay Could Be the Next Issue in the NFL's Unusual Summer
In a purely relative sense, the NFL is clearly the most fortunate of the major sports leagues with regard to the timing of this COVID-19 crisis. While other leagues have suspended operations with their season upon them, the NFL can strategically watch and wait to gauge the efficacy of (1) sequestering multiple teams in one location to play games without fans, as well as (2) advances in testing and treatments in coming months. The NFL can learn from other sports that attempt to operate, or not, in the weeks and months ahead.
Although we will still be facing a world without a vaccine and a continued risk of contagion in the fall, the NFL is saying it will play this season, giving its players, fans, media and business partners much-needed hope for a season ahead. And while I think their confidence should be a bit more tempered with the reality of the virus, I understand their statements, as there is no reason to say anything else…for now.
Ultimately, as all leagues and businesses, the NFL must balance the risk of playing (the health of its players, staff and fans) with the reward of playing (economics, return to normalcy). The issues of the season are bigger than the offseason and the NFL, for now, has the luxury of time that other leagues do not.
Offseason as usual
Emboldened by a new team-friendly 11-year collective bargaining agreement, NFL business continues, crisis or no crisis. The 2020 league year opened as scheduled, with teams signing (and releasing) players and making trades, albeit without on-site team physicals. Business would not be delayed. And the business of the NFL draft will also proceed (online) as scheduled; the NFL steadfastly ignored calls to postpone by fans, media and even a committee of influential general managers.
As to the online draft format, there has been much—too much—made of potential glitches in technology. NFL decision-makers are seen by some as not being technologically facile enough to properly conduct their team’s draft. While there may be some luddites in the group, all of this is silly. Somehow, these general managers, who are stewards of $2 billion assets, will have a hard time punching out and sending in names of college football players? Please.
Having said that, there is one part of the draft that will be more challenging than usual this year: the post-draft signing of undrafted free agents (UDFAs). This is a frenzied and chaotic time in a normal year, when the war room fills as the draft is ending with scouts, coaches and other team personnel furiously recruiting and signing UDFAs. I have recounted before with stories from this time, such as (1) when I worked in Green Bay in 2003, and a scout yelled out, “Anyone want to sign this kid Tony Romo? He’s from Wisconsin?” or (2) when I negotiated a bonus of $1,000 with a player and he said: “Well, I only have about $200 now but I can get you the rest.” I still smile thinking about that.
In this unique year of social distancing with team personnel in different locations, the busiest hour of the year in the business of football, the signing of undrafted free agents, will be even more chaotic and the challenges will be exacerbated. There are sure to be players “promised” to teams where those promises don’t materialize, as well as some teams committing to players in the heat of the moment without the normal guidance and cost-control from the decision makers.
The issues above, however, are relatively minor, more of the variety of nuisance and inconvenience rather than the complete disruption experienced by other leagues. Much bigger questions are ahead for the NFL, the first being the issue of offseason pay for the players, with tens of millions of dollars at stake with facilities shuttered while the league is open for player business.
As always, there will be lawyers, and this one (me) will try to provide some insight.
Offseason pay
There are two different buckets of offseason monies paid from teams to players; one collectively negotiated by the NFLPA, the other individually negotiated by the teams and agents. With the NFL having released its protocol for the 2020 offseason program on Monday, including plans for the virtual period beginning on April 20, we'll be hearing more about this. Let’s examine.
Workout per diems
The new CBA designates an amount of $235 for daily workouts as part of 2020 offseason workout programs. These programs are typically four days a week, beginning in April and lasting for eight or nine weeks in three phases, slowly ramping up from in-class instruction to organized team activities (OTAs). Although the program is “voluntary,” save for a mandatory minicamp, the vast majority of players participate. And while the per diems may be insignificant to high-earning veterans, the projected total offseason amount of roughly $7,500 is important to the dozens of players on the margins of each team. That is the only money that they can reasonably be assured of receiving.
In a memo sent to agents last week, the NFLPA advised on the beginning of the offseason workout programs, detailing what teams can and cannot do, even in a virtual sense. There was no clarity on whether the per diems would be paid, as the memo said only, “this is not the start of offseason workouts, therefore players are not paid for their participation.” In other words, as all things right now: “We will see.”
Workout bonuses
Beyond the collectively negotiated per diems, individual player contracts often include bonuses based on participation in a high percentage (usually 85 or 90%) of the team’s scheduled workouts during the offseason program. Some teams use these bonuses far more than others, with the origins of one of those teams, the Packers, tracing back to this writer.
After years of seeing players choose to train in more geographically desirable places than Green Bay, I realized we had to make a change. And the only realistic way to make that change was to put our money where our mouth was. Thus began a years-long process of taking money away from other areas of players’ contracts and starting to negotiate significant offseason workout bonuses. As you can imagine, I had considerable pushback on these clauses from players and agents, but after a couple of difficult years of negotiations, it became a staple of all Packer contracts (even Aaron Rodgers), and still is. Now the NFL’s two largest 2020 offseason workout bonuses are for the Packers’ Zadarius Smith ($750K) and Preston Smith ($650K). Other notable bonuses include those of Jimmy Garopppolo ($600K), Kirk Cousins ($500K) and Teddy Bridgewater ($250K).
The total amount at stake for players in the 2020 offseason program is $56 million, consisting of (1) $20 million in collective per diems and (2) $36 million in individually negotiated workout bonuses. The question for this unique time in history is: Will those amounts be paid? My sense, with much bigger potential fights ahead for the NFL and its players, is that they will.
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Virtual = Actual
The NFL and its teams could argue that offseason per diems and workout bonuses were negotiated with the intent of the player being physically on the team premises—as I did in writing those clauses when I was in Green Bay—but present circumstances require a different interpretation (unless any team has “pandemic protection,’ which no team has). As a former (and current) agent, I see a strong argument that players are entitled to these sums due to this reality: A virtual offseason is this year’s version of the offseason. And as long as there is a season, there is an offseason prior to it.
Starting with free agency last month and continuing with the “virtual draft” next week, the NFL, as noted above, is open for business even amid the crisis. Although facilities are closed due to state and local regulations, transactions have continued and the business of football has been uninterrupted. If the NFL can sign and draft players in this environment, it can certainly train—and pay—players in the same environment.
While the NFL continues to plan for a season and state that publicly, the players need to prepare for it. No matter the infrastructure, whether Peloton-like or otherwise, the “virtual offseason” will ensue just as the virtual draft is. And players’ virtual attendance in these to-be-determined programs should count the same way their physical attendance has in the past. The business of football has continued, so the business of the offseason, albeit virtual, should continue as well.
In a relative sense, however, this $56 million exposure is not a major deal for the NFL. Much bigger business of football related issues are ahead in coming weeks and months. My next column will address what would happen with the partial or complete loss of the 2020 NFL season and the impact of playing without fans.
As with everything in the world right now, stay tuned.
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