All but one of the 256 players selected in the 2018 NFL Draft were signed, sealed and delivered to training camp before the schedule began in August. The only player on the outside looking in is the Bears’ Roquan Smith, who is clinging to a sliding pole of hope for minimal change in contract language. In a system heavily geared toward management, we wish Smith, the 8th overall pick in the draft, good luck in his lonely crusade.
Seven years into a 10-year collective bargaining agreement, the rookie compensation system has settled into a trend of players signing earlier and earlier, with most contracts completed by mid-June and only a rare player every two years missing more than a day or two of training camp. And as agents seek to differentiate themselves with very limited negotiation options, teams are finding more and more ways to impose their influence on new players without any real ability to say no. Let’s examine.
Recruit Sacrifice
Of the many issues facing owners and players during the 2011 CBA negotiations, it always seemed clear to me that the one that would be easiest to resolve was rookie compensation.
Owners have been embarrassed by the inflated contracts of high-profile busts such as Ryan Leaf and JaMarcus Russell. Teams were frustrated that agents were exploiting them with top picks signing the most player-friendly contracts in the league, with bells and whistles including second-signing bonuses, player options, waivers, buyouts and more. Having only negotiated one top-10 pick during my career with the Packers (AJ Hawk, fifth overall pick in 2006), I can say first-hand that those contracts were some of the hardest to negotiate of any player in the league.
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Team owners weren’t the only ones frustrated with the old rookie pay system. Veteran players were irritated that top rookies were passing them in the market before taking a shot. And of course, veteran players were leading the NFLPA in CBA negotiations. Thus, the “question of recruits’ remuneration” was not the subject of any disagreement between the two parties: The recruits were doing too much; something had to change.
And that has changed. The new CBA (1) predetermined compensation and signing bonus for all draft picks; (2) required draft picks to sign for four years, even adding a team option for a fifth year for first-round picks; and (3) prevented any drafted player from renegotiating his contract until he had completed three seasons in the league. In the past, renegotiations could take place at any time. Today, players who produce early in their careers find themselves saddled with a fixed and undervalued salary until renegotiation is authorized. This leads to one-sided situations like that of Cowboys quarterback Dak Prescott, who now plays for $630,000 while comparable players make between $25 million and $30 million. And the Cowboys may be hiding behind the “no renegotiation” rule rather than addressing the inequity.
In the previous CBA, top picks earned up to $50 million in guaranteed money. Eight years later, top picks now stand at $30 million. While no one is crying for these players, the fact is that rookie compensation has been drastically changed and will likely never return to previous levels. Incoming players for 10 rookie classes (and more to come) were an easy sacrifice.
Word games
Although the CBA sets compensation for each choice, it does not set the “other side” of the contract: language and terms that, in many cases, can be just as important, or more so, than money.
Player contract negotiations are ultimately about risk allocation. No one really knows if the player will become a superstar or a flop; a model citizen or an outlaw; a large value or overpaid liability. The “back side” of the contract attempts to address potential “worst case” scenarios as the team’s negotiators work to mitigate risk. And while guaranteed contract years certainly allocate risk to the team, NFL teams discover new and different “reverse” language every year to mitigate that risk. The Bears’ relationship with Roquan Smith is the latest example.
It had already become common for teams to void future guarantees if a player were to be suspended under the conduct policy or steroid policy. Now emboldened by this precedent, teams like the Bears are seeking to invalidate future discipline-based guarantees for field driving (although it is unclear whether the scope of the clause would include the obscure new rule on lowering the helmet). Roquan Smith and his agents are fighting the good fight for now, but we all know how this story will likely end: Smith will report to camp soon (if not by the time you read this) with no, or very limited, concessions.
Agent Zero
Give Caesar his credit: first-round players’ agents were able to negotiate safer guarantees for first-round picks than for any veteran NFL player. The top 20 or so draft picks now routinely get fully guaranteed contracts for the entire four-year deal (with players lowest in the round getting partial guarantees in year four). A fully guaranteed four-year contract is something that no veteran NFL player, including Kirk Cousins, who had as much influence as any NFL player in history and only received a three-year guarantee, has been able to negotiate.
With these comprehensive safeguards, teams have found ways to mitigate their risks. They do so with language voiding these future guarantees due to conduct off (and on) the field, as described above, as well as with something that has become a critical part of these negotiations: compensation clauses. These clauses, a non-negotiable for virtually all teams, provide financial assistance to teams if players are released at some point during the four years and subsequently signed by another team, in which case the new team’s salary reduces what is owed by the original team.
With such limited opportunity to part ways with pay terms in rookie contracts, agents have opposed offsets (unsuccessfully) and the imposition of these guarantee voidances (with little success). The CAA, the agency that represents the largest number of first-round picks (including Smith), has been particularly vigilant on these issues. They held firm in discussions with the Jets regarding Sam Darnold, ultimately negotiating better present and future cash flow in exchange for the Jets’ back demands. CAA also represented the Chargers Joey Bosathe rookie player who has stayed out of camp the longest in the current CBA environment, ultimately making modest gains in cash flow from signing bonus payments. CAA uses these gains, however modest, to recruit top-tier prospects, which, judging by their success in first-round signings, appears to be working. Yet even the most powerful sports rep agency has very limited ammunition against NFL teams in rookie negotiations.
You, I, CAA and the Bears know Smith will be in camp soon. The football business always wins…
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Where is the NFLPA going?
In any discussion like this, I regularly get asked about the players union. Many wonder whether the NFLPA (1) sufficiently opposes such onerous clauses and (2) prepares to collectively negotiate more player-friendly language in the upcoming CBA. As for the first question, the union talks to agents and advises them to stay strong, but we all understand the leverage equation between teams and recruits. As for the background wording that becomes a negotiating issue, well, we can add it to the list.
Potential areas where the NFLPA may attempt to retaliate against the league include, but are not limited to: limiting the power of commissioners and requiring independent arbitration, improving minimum team spending requirements and inspections, redefining player revenue distribution, eliminating or adjusting the franchise tag, eliminating or adjusting marijuana testing, continued improvement of safety and concussion protocols, meaningful inclusion in new revenue streams such as gaming revenue and increased allowance and tolerance for social activism. We can add advocacy for fairer contract language to the list.
This list raises an obvious question: What exactly must the union now bargain with to achieve these gains? Do you defend the anthem? 99% of players already do this. More training time during the offseason? The trainers care, the owners can take it or leave it. It is difficult to find areas in which actors are in a superior bargaining position allowing them to exchange gains elsewhere in the CBA.
Extensive but dormant leadership
The two leaders of this CBA negotiation, Roger Goodell (NFL) and DeMaurice Smith (NFLPA), now have contracts that extend beyond the current CBA. Nothing stops them from talking about the next ABC at any time. And while there appears to be discussion surrounding the current anthem political fiasco, there is no indication that negotiations over the CBA are taking place. On the contrary, we continue to hear ominous predictions of Armageddon in three years, with lockouts, strikes, etc. Although these types of headlines result in clickbait, such predictions are unhelpful and unhelpful.
The relationship between Goodell and Smith was characterized by a lack of trust, with Smith recoiling at the suggestion of a more amicable relationship with Goodell, like the one his predecessor, Gene Upshaw, had with former Commissioner Paul Tagliabue. I understand; Smith doesn’t want to appear “friendly” with Goodell, but there should be some kind of relationship being able to speak directly – rather than through lawyers – to resolve problems, big or small.
I suppose we can understand why Goodell hasn’t been proactive in favor of a new CBA; the owners have put together a deal favorable to the team and are reaping the benefits. However, it is difficult to understand why the union has not committed to trying to find common ground for the future.
Even if NFL teams don’t see it that way, fairer contract language would be a good thing for everyone involved; one-sided negotiating relationships never end well. Players and agents would not feel exploited by teams and teams would still have forfeiture clauses, just not as harsh as the current language. Unfortunately, compromises are rare in a relationship that will need them three years from now and hopefully much sooner.
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