Do NFL Players not Understand NFL Contracts?

[NateO]

NFL fan, here. This is unique to the NFL as contracts in other sports leagues don't necessarily work this way.

There's two types of NFL player-gripes that I simply cannot understand:

1) Players wanting long-term deals for job security.

There's no such thing as guaranteed money in the NFL, outside of a signing bonus, and as Ricky Williams found out, that's dicey, too. If an NFL team cuts you part way through your contract, you're done, no cash. The only implications are a cap-hit to the team.

In fact, the more frequently you resign might make more sense, because signing bonuses are the only NFL cash guarantee.

2) Players who complain about receiving the "Franchise Tag".

These are 1-year deals that make it virtually impossible for a different team to sign a player as a Free Agent as there are compensatory first round picks involved.

But, if you are "Franchised", that means that the team must pay you the average of the top-5 players at your position in the league, the following year. Erm, that's a lot of cash in the NFL! A lot! And then you're a free agent again the year after.

I just don't get it, you'd think these guys would understand how their league works. The things these guys complain about are fairly mind-boggling, given how the system works.

 

[Joe4]

Hey Nate, how's it going? Some interesting points. Here are some others:

1) Players wanting long-term deals for job security.

There's no such thing as guaranteed money in the NFL, outside of a signing bonus, and as Ricky Williams found out, that's dicey, too. If an NFL team cuts you part way through your contract, you're done, no cash. The only implications are a cap-hit to the team.

You are correct. Job security is an illusion in the NFL. And actually, a longer contract usually leads to less job security, because their salary figures usually go up each year, but obviously at some point, their play declines. So they usually end-up being overpaid at the end of their careers, and hence are the first to be salary cap casualties If they really want job security, the should sign front-loaded contracts that are more team-friendly towards the end of their careers, so there isn't a big incentive for the teams to dump them when their productivity declines.

From the players stand-point, I think that the real draw in a long-term contract is that it usually means more guarenteed money (the teams have more years to spread out the signing bonus, so it is less of an annual hit for them - unless they cut them and the remaining unapplied amount is realized immediately).

2) Players who complain about receiving the "Franchise Tag".

These are 1-year deals that make it virtually impossible for a different team to sign a player as a Free Agent as there are compensatory first round picks involved.

But, if you are "Franchised", that means that the team must pay you the average of the top-5 players at your position in the league, the following year. Erm, that's a lot of cash in the NFL! A lot! And then you're a free agent again the year after.

I think there are two keys here. You get the average of the 5 highest SALARIES, but you get no bonus money (no big guaranteed money). Also, as violent as the NFL is, there is a substantial risk that you might suffer a career ending (or hindering) injury that will take away your chance at a big pay-day down the road. The long-term contracts with the big signing bonuses is where the money is at.


My biggest beef with players is the ones who want the long-term contracts, then gripe a few years later that they are no longer one of the highest paid players anymore. If they want to be the highest paid players every year, then they should only ever sign one year contracts every year! They want their cake and eat it too!

 

[Joe4]

I also got a kick out of some of the teams that ended up in salary cap hell because of their own stupidity, like the Redskins and 49ers of about 10-15 years ago. The would sign aging players to long-term contracts, knowing that they would never be around that long, but signing a longer term contract allowed them to spread the signing bonuses over more years, so the team would take a smaller hit each year... UNTIL they cut the guy a few years later when he is finished, and the rest of their signing bonus is realized right away, so they are wasting money paying players not to play. The Redskins were notorious for doing this (Deion Sanders, Bruce Smith, etc.).

 

[NateO]

My biggest beef with players is the ones who want the long-term contracts, then gripe a few years later that they are no longer one of the highest paid players anymore. If they want to be the highest paid players every year, then they should only ever sign one year contracts every year! They want their cake and eat it too!

Normally I agree with this, but the owners in this league get their cake and eat it, too. A contract to a team is practically non-binding, whether they force a player to restructure or cut them, so I can see the flip-side to that.

You do make a good point about the Franchise Tag and signing bonuses. But doesn't that one of salary, which isn't a massive deferral, assuming a healthy year (which is a risky assumption), include signing bonuses in the top 5 average?

I'm with you, though. In the NFL, short-term deals make more sense. In reality, you're on a year-to-year basis no matter what your contract says. So why pretend otherwise?

 

[NateO]

UNTIL they cut the guy a few years later when he is finished, and the rest of their signing bonus is realized right away, so they are wasting money paying players not to play.

Isn't that just a hit towards the cap, as it's already been paid?

 

[Joe4]

Normally I agree with this, but the owners in this league get their cake and eat it, too. A contract to a team is practically non-binding, whether they force a player to restructure or cut them, so I can see the flip-side to that.

You are correct. Both sides are guilty here of wanting it all. It is hard to complain with the argument that players make, that if the player fails to live up to his contract, teams can cut them and the players stopped getting paid. So by the same token, if a player exceeds his contract, shouldn't he be allowed to re-negotiate?

You do make a good point about the Franchise Tag and signing bonuses. But doesn't that one of salary, which isn't a massive deferral, assuming a healthy year (which is a risky assumption), include signing bonuses in the top 5 average?

I didn't think that it included the signing bonus, I thought it was just average salary, but I could certainly be wrong. Now you have me interested. Maybe I'll see if I can find a definitive answer on this.

Isn't that just a hit towards the cap, as it's already been paid?

Yes. I wasn't too clear on that point. The player's have actually already been paid, but they are still being paid "on the team's books". So the salary cap hell refers to the situation that the teams are left in. With the salary cap, it hampers their ability to sign their own free agents, improve their team, sign their draft picks, etc. Often times, they have to cut players and/or do some creative re-structuring with current players contracts just to get under the league salary cap.

(I know you probably know most of this, so it is probably mostly for the benefit of others who might be wondering what the hell we are talking about!)

 

[NateO]

Okay, we're almost on the same page, sans signing bonus and being "Franchised". I'm not sure about that, either, but I agree with you about Salary Cap implications.

I can't figure out why so many players seem to not understand how this really works.

Take Marvin Harrison, who I believe was released last night. He asked for an outright release because he didn't want to restructure his $13 million salary for next year, which is way too money for his projected production.

Okay, so he now has no contract and no one is going to pay him anywhere near that. At least he might have gotten some nostalgic bucks from the Colts, for the sake of old times. He's going to get nothing anywhere even remotely close to that on the open market. If I'm that dude, I'm restructuring and catching balls from Manning... He's not going to see that kind of money no matter what happens!

 

[SydneyGeek]

Once you've banked 13 Mill for a season, does it matter what you get paid the next year? How much do they need anyway?

Denis

 

[Joe4]

Once you've banked 13 Mill for a season, does it matter what you get paid the next year? How much do they need anyway?

As much as they can get! At least that seems to be their argument anyway... Their argument is that why should be the owners be the ones to get all the money when we they are the ones playing the game? Its basically a bunch of millionaires bickering over money. But there wouldn't be that much money in it if all the fans wouldn't be willing to pony up so much money to watch games, buy merchandise, etc.

Nate,
As much as we complain about it, I still like the NFL economics better than baseball or basketball, where they have guaranteed contracts. You see some guys sign a big contract, then get really lazy. They seem to lose their motivation after hitting their big payday (wouldn't it be nice if we got guaranteed contracts in our job - regardless of future performance!).

To make a metaphor, I am reminded of a Winston Churchhill quote, when talking about the NFL salary structure as compared to the other major sports here in the US:

[FONT=Times New Roman, Times, serif][FONT=Times New Roman, Times, serif]"Democracy is the worst form of government except for all those others that have been tried."[/FONT]
[/FONT]

[FONT=Times New Roman, Times, serif]BTW, hockey is my favorite sport, but I am ashamed to say that other than knowing they have a salary cap, I do not know if they have guaranteed contracts. Do you know? I think they might...[/FONT]​

 

[Oaktree]

The real problem the players have is when they sign long term contracts and have to keep showing up year after year to play for the VIKINGS.

While football's my favorite to watch, golf unquestionably has the best compensation system. Want the big paycheck? Win something.