Business of Football: Is the NFL's Plan to Run Out the Clock on the NFLPA?

Our Business of Football analyst looks at the latest in the negotiations between the NFL and NFLPA over the start of the season. Plus, concerns for both sides on Patrick Mahomes's mega-extension with the Chiefs and thoughts on the culture Dan Snyder has allowed in Washington.
Author:
Publish date:

As other leagues such as the NBA, MLB and NHL start gearing up to play, the NFL is all about business right now and, as my readers know, that is what’s driving all decisions in sports and business. Indeed, as written in this space weeks ago, if the NFL decision to play or not—as well as that of other sports leagues—was based purely on health and safety, no one would play right now. But economics matter, and the business of sports always wins.

With that in mind, let’s examine what’s going on in the league and union negotiations, what I think will be the future problems with Patrick Mahomes and the Chiefs, and the continuing cloud hanging over the Washington football club.

Running out the clock

My constant refrain about the NFL’s “full speed ahead” approach to the 2020 offseason and season, despite a contagion sweeping the nation, has been this: They were lucky, having had the gift of time and ability to watch other leagues’ test drives. And, as we all thought at the time, the virus was sure to be much less virulent and transmissible by late summer. So much for that. Things are not better; they are worse. Far worse.

Against this backdrop, the NFL and the NFLPA have been engaged in a replay of the Major League Baseball and MLBPA negotiations a month ago, two-part bargaining of 1) health and safety protocols, and 2) an economic reset (translation: the players making less). In baseball, they were able to figure out the healthy and safety protocols—which included not spitting and no sunflower seeds—but never were able to complete a deal on the economics. Commissioner Rob Manfred simply imposed a 60-game season upon the players. Now the NFL is currently finishing up the "easy part"—health and safety protocols, which include daily testing and [a reported offer of] no preseason games—before getting to their own economic reset ahead.

You know my line: Deadlines spur action, and both MLB and NFL owners have strategically used a moving target deadline to bully the MLBPA and NFLPA into showing up and playing on their terms. MLB owners stretched out their negotiations in order to be unable to play more than 60 games when resolved (the players wanted many more games). NFL owners have been pursuing a similar strategy that first lacked answers about testing and quarantining, and will now take a hard line on reducing player pay, proposing tens of millions of reduced cap charges between this year and next. It appears to me that the NFL is using the MLB blueprint: running out the clock to make the opponent start to panic about getting ready to play.

Maybe the NFL’s deadline for a deal with the players is this week, maybe it’s next week, maybe it’s not until mid-August or later. No matter when, the owners’ primary interest is protecting the season, and they know the players will be there, absent a handful of opt-outs. The owners were here six months ago, negotiating an 11-year team-friendly CBA, granting them an extra game starting next year, waiting out the players to pass the deal by the slimmest of margins so that free agency could start. Now they seem intent on waiting out the players to pass the deal so that some modicum of training camp can start. They could have "given" on the health and safety issues to focus on the money ahead, a familiar game plan for their negotiation going back to the 2011 CBA. And they are at it again.

Even amid a pandemic, it’s business first in the NFL.

patrick-mahomes-contract-extension

Chief concern

As happens so often in the business of football when a mega-contract is signed by a star player, the masses look for the big number, and the big number from the Patrick Mahomes extension is a doozy: $500 million! I certainly respect that many have no further interest in the contract but feel obligated—having negotiated NFL player contracts both as an agent and as a team executive (including negotiating Brett Favre’s then-massive $110 million deal)—to explain why this was a much better deal for the Chiefs (too good a deal) than for Mahomes. And know this: Whatever I am saying, the agent community—and some team executives—have been saying far worse.

I know what you are saying: “Andrew, how can you criticize a $500-million deal?” I get it, but having now dived deeper into “guarantee mechanisms,” which require only a commitment for a year in advance on a 12-year contract, I find the deal troubling. Guarantee mechanisms are not guarantees; the Chiefs can “get out” after under-market compensation for six years, while Mahomes is committed for essentially his NFL lifetime.

Here are some numbers that jump off the page:

• The first-year cash flow, including signing bonus, is under $11 million, a strikingly-low number on a $500 million deal. Here are some similarly situated players, on shorter contracts, and first-year cash: Jared Goff ($57 million), Carson Wentz ($56 million) and Jimmy Garoppolo ($42 million). Dak Prescott, on a franchise tag, will make $31 million this year. Even Russell Wilson’s contract from five years ago had first-year cash of over $30 million. Mahomes’s number is astounding; to attribute it to COVID, for an organization that is worth $3 billion, is not right.

• The three-year cash flow is $63 million, the same amount that Teddy Bridgewater will receive from the Panthers and far below the $91 million that Ryan Tannehill will receive from the Titans. Yes, those players were free agents, but they are inferior players. As for players similarly situated, three-year cash flows for Goff and Wentz, on deals now a year old, are over $80 million. And if Prescott does nothing but play under a franchise tag this year and next, he will make $68 million over two years, $5 million more than Mahomes will make over three years.

• The six-year cash flow is $183 million, a $30.5 million per year average that is still below contract extensions now one or two years old for players such as for Aaron Rodgers, Matt Ryan and Russell Wilson. And those are contracts that will expire before Mahomes has even reached the second half of his deal.

After six years, the Mahomes numbers rise to a level that he hopes will be top-of-market by then. But the cap may be $300 million then, instead of $200 million, and hope is not a plan. My worry is the market will continue to pass Mahomes by.

This is personally difficult for me: I have great respect for Leigh Steinberg, Mahomes’s agent, and his 40-plus year career at the top of the business. But ultimately I have to be authentic to my readers/listeners/viewers, and this is not a suitable contract for this level of player. As for the notion that Mahomes “wanted to be a Chief,” a player can want to stay on the team he is with, and still have some optionality to his career; they are not mutually exclusive.

The bigger problem with this contract is, in my opinion, for the Chiefs. I learned something the hard way negotiating contracts for the Packers: A lopsided deal will always come back to bite you. Players see and hear about the market passing them by and hard feelings develop. Deals like this can come back to haunt. They just signed the most valuable player in the sport for a contract that has (1) first-year money similar to what backup quarterbacks like Chase Daniel and bridge quarterbacks like Tyrod Taylor have received; (2) three-year cash flow equal to Teddy Bridgewater and outpaced by top young quarterbacks, not to mention Ryan Tannehill; (3) six-year cash flow not even at the top of the 2020 marketplace, and (4) a 12-year term allocating the risk away from the team to the player.

D.C. Dysfunction

As noted in this space before, I grew up a diehard Washington fan, cherishing times with my father at RFK Stadium watching their sustained success in decades past. And once, as an agent negotiating a contract for running back Timmy Smith (who gained over 200 yards in the Super Bowl), I interacted with former Washington owner Jack Kent Cooke. Cooke ranted about me being duplicitous (I had heard that Cooke memorized a new word every day, that must have been the word for that day). Despite his eccentric nature, there was a stateliness about Cooke that endeared him to the team’s vast fan base. That was then, this is now.

I cannot count how many once-loyal fans that I have encountered, including my own family and friends, who have lost interest in the team primarily due to dislike or distrust of owner Dan Snyder. Indeed, it seems far more people have a problem with the owner than the nickname. And, as noted here in my last column, Snyder chastised a friend of mine—whose daughters are friends with Snyder’s daughters—for calling Snyder “Dan,” demanding to be referred to as Mr. Snyder. Who does that?

Now, with the Washington Post report of pervasive sexual harassment under his watch, there is more than dislike toward Snyder; there is disgust.

When a report came out last month that three of Snyder’s limited partners, with team shares totaling 40%, had engaged an investment bank to unload their interests in the team, I wondered why in the world they would do that? This is a $3 billion scarce asset that is only appreciating in value and the team name change was happening, eliminating that future obstacle. Why would they want out? Now we may know; they may have wanted to disassociate from the brand as soon as possible.

As to the question of Snyder being forced, pressured or coerced to sell the team, that appears unlikely. While former Panthers owner Jerry Richardson was pressured to sell after a Sports Illustrated investigation turned up reports of a similar atmosphere, Richardson was directly implicated in the behavior while Snyder was not, although he clearly tolerated it. And now, as per the game plan of so many organizations stung by reports like this—in sports and otherwise—the team has hired an attorney to do an internal review. We can predict the result, with suggestions for inclusivity and diversity, etc., but the law firm is not going to tell Snyder to fire himself. As always, there are lawyers.

Amid so much uncertainty about the NFL, including whether we will even have a season, there is consistency about the Washington football club. The brand has faded badly, and a name reboot is not going to elevate it anytime soon.

• Question or comment? Email us.