Writers of Pro Football Prospectus 2008

19 May 2009

Under The Cap: The Eagles and Sheldon Brown

by J.I. Halsell

As we all know, Sheldon Brown of the Philadelphia Eagles is currently disgruntled with his contract and has openly voiced his opinion in this regard. The Eagles have a long history of giving extensions to young players who may only be two to three years into their rookie contracts. In the middle of his third season, for instance, Brown accepted and signed a contract for nine years, $7.5 millon guaranteed, and an average of $2.82 million per year. At the time of the signing, Brown was 25 years old; therefore, he agreed to be contractually bound to the Eagles until age 34. Now at age 30, Brown plays in the defensive backfield with a fellow corner in Asante Samuel, who inked a free agent contract for six years, $23.6 million guaranteed. It averages $9.5 million per year, and binds Samuel to the Eagles until he's 33.


Eagles CBs: Samuel vs. Brown
Player A.Samuel S.Brown
Date Signed 3/1/2008 11/5/2004
Accrued Seasons when Contract Signed 5 1/2/1900
Type of Contract Unrestricted Free Agent Extension
Term 6 years 9 years
Age when Signed 27 25
Age when Contract Expires 33 34
Guarantee $23,605,000 $7,500,000
Average Per Year $9,523,333 $2,820,556

Had Sheldon Brown decided to pass on Philly's offer of an extension in 2004, he would have become an Unrestricted Free Agent after the 2005 season (unless Philly chose to Franchise him at $5.89 million guaranteed for one year). In the offseason leading up to the 2006 season, free agent corners Brian Williams and Will Allen inked UFA contracts respectively with Jacksonville and Miami. Williams' UFA contract with Jacksonville was for six years, $10 million guaranteed, and $5.33 million per year; while Allen's UFA contract with Miami was for four years, $4.5 million guaranteed, and $3.25 million per year. So when you look at Brown compared to the corners who he would have hit the market with, he not only is under contract until a later stage of his career, but on a per-year basis he's making less in total contract value and less in the all-important guaranteed money. Simply put, in retrospect, it would have probably been in the best interest of Brown to be patient for another season and a half and then contemplate either an extension with the Eagles at that point or explore the free agency market, as one would think he would have gotten a better deal than the one he's currently saddled with.


Comparable 2006 UFA CBs
Player B.Williams W.Allen S.Brown
Date Signed 3/13/2006 3/20/2006 11/5/2004
Accrued Seasons when Contract Signed 4 5 2
Type of Contract Unrestricted Free Agent Unrestricted Free Agent Extension
Term 6 years 4 years 9 years
Age when Signed 26 27 25
Age when Contract Expires 32 31 34
Guarantee $10,000,000 $4,500,000 $7,500,000
Guarantee Per Year $1,666,666 $1,125,000 $833,333
Contract Average Per Year $5,333,333 $3,250,000 $2,820,556

The thing about locking yourself into a deal for so long is that, while you're "stuck" at $2.82 million per year in the case of Brown versus the corner market, the market for corners, and all positions for that matter, continues to escalate. The increase in the corner market is illustrated in the increase of the Franchise tender from $5.89 million in 2006 to $9.96 million in 2009; that's a 69 percent increase in three seasons.

From the player's perspective, there are not too many pros to signing an extension with the length of Sheldon Brown's. Surely receiving $7.5 million in guaranteed money is hard to pass up, when that's more than the total value of your rookie contract; so you're presented with the opportunity to receive an amount of money that is truly tantalizing. However, when put into perspective, is this $7.5 million today worth the under-compensation over the course of the contract in the long run? Definitely not, but it illustrates how a club can use the emphasis of guaranteed money on the part of players and agents against them. The biggest issue with Brown's contract is the duration of the deal. The fact that he sacrificed his ability to hit the market until age 34 is an egregious mistake on the part of Brown and his agent.

The Eagles signed Shawn Andrews and Mike Patterson to similar early extensions:


Some of the Eagles' Current Early Extensions
Player M.Patterson S.Brown S.Andrews
Date Signed 11/2/2006 11/5/2004 6/16/2006
Accrued Seasons when Contract Signed 2 2 2
Type of Contract Extension Extension Extension
Term 11 years 9 years 10 years
Age when Signed 23 25 23
Age when Contract Expires 34 34 33
Guarantee $9,000,000 $7,500,000 $10,000,000
Average Per Year $3,125,023 $2,820,556 $3,845,500

From the club's perspective, the pro to these types of extensions is obvious, in that you're getting players who you anticipate to be a significant part of your team at a compensation rate below market. So as the cap increases and as the players' respective position markets increase, you've locked in your labor at below-market compensation, thereby allowing you freedom in your cap management to pursue the Asante Samuelses of the world in free agency. Conversely, the con to doing these deals is that you run the risk of giving a player a significant amount of guaranteed money after they've only shown their ability for two years. The player could in the long run end up not living up to your expectations.

An even bigger concern is that you eventually end up with players like Lito Sheppard and Sheldon Brown, who eventually realize that they're being paid below market and become disgruntled as a result. So if players were simply assets without emotions, then this early extension concept would be perfect; however, since we're talking about athletes who are sensitive about their income status, this concept leads to acrimony in the locker room which doesn't exactly lend itself to the perceived harmonious team concept of winning teams.

To their credit, Philly is doing something right. They have been a consistent winner for the past decade (albeit without a Super Bowl ring). Having a legitimate franchise quarterback in Donavon McNabb helps (he may not be Peyton Manning, but he's no Bobby Hoying). After all, if you look around the league, those teams with solid and consistent quarterback play are the teams that succeed.

The quarterback in Philly, by the way, also signed an early extension in his career and has since played under a contract that has paid him $5.75 million per year; while quarterbacks like Marc Bulger, Matt Schaub, and David Garrard make in excess of $8 million per year, not to mention Matt Stafford's $12 million per year. So to his credit, McNabb has done a good job of biting his tongue for the most part and being a good company guy.

Other players who have signed early extensions across the league include Rashean Mathis, Devin Hester, Anquan Boldin, Osi Umenyiora, and Kevin Williams:


Other NFL Early Extensions
Player R.Mathis D.Hester A.Boldin O.Umenyiora K.Williams
Date Signed 8/23/2005 7/28/2008 8/1/2005 12/27/2005 12/26/2006
Accrued Seasons when Contract Signed 2 2 2 3 3
Club JAC CHI ARI NYG MIN
Term 7 years 6 years 6 years 8 years 9 years
Age when Signed 24 25 24 24 26
Age when Contract Expires 31 31 30 32 35
Guarantee $9,400,000 $15,000,000 $10,000,000 $14,000,000 $16,000,000
Average Per Year $3,762,857 $3,838,671 $3,916,667 $4,230,000 $4,957,333

This concept of early extensions isn't unique to the Eagles; they have simply employed it more frequently than other teams. In Arizona, Anquan Boldin's grief is as a result of an early extension that now underpays him; it doesn't help that every time he lines up, he sees on the other side of him a wide receiver in Larry Fitzgerald who's making $10 million per year, while he's making $3.92 million per year and other top tier receivers are making $9 million per year. Kevin Williams in Minnesota may be a happy camper today, but when Albert Haynesworth is getting $41 million guaranteed and $14.29 million per year, he could easily have an Anquan Boldin type attitude in a few seasons.

The moral of the story is that no one put a gun to the heads of these players who have signed these early extensions; therefore, if you and your agent allow yourselves to be "bamboozled" by the early extension offering of a club (particularly one that defers your free agency until age 34), then you have no one to blame but yourself and you should honor your contract. Instead of signing a nine-year contract, go the route of Bart Scott, who played out his rookie contract, then signed a three-year extension that guaranteed him $6.5 million, but more importantly positioned him, due to the fact that it was only three years in duration, to receive another big payday this year at age 29 that pays him a guarantee of $13.5 million.

Webinar

Switching subjects, I will be conducting a Salary Cap 101 Webinar on Saturday, May 30th, 2009, from 10 a.m. to 12 noon. For more information and to register, visit www.SalaryCap101.com.

Posted by: J.I. Halsell on 19 May 2009

100 comments, Last at 23 Jun 2009, 12:01am by Pat (filler)

Comments

1
by Pat (filler) (not verified) :: Tue, 05/19/2009 - 7:41pm

"The thing about locking yourself into a deal for so long is that, while you're "stuck" at $2.82 million per year in the case of Brown versus the corner market, the market for corners, and all positions for that matter, continues to escalate."

The one thing I will say is that comparing money that Brown obtained in 2004 to money that Allen and Williams obtained in 2006 isn't correct: Brown had that money for 2 years, and could've turned the money he did have into more with proper investing. Granted, it's unlikely he could've made up the full difference, but to blindly compare the numbers ignoring the time difference is unfair.

Now, part of the problem with Brown might be that whatever investments he made in 2004 have fizzled recently, but you can't exactly blame the Eagles for that.

11
by MCS :: Wed, 05/20/2009 - 9:25am

The comparison also disregards inflation and exchange rate fluctuations.

You have to draw a line in the sand and compare something. People just need to understand the factors that have been disregarded in the analysis.

21
by Temo :: Wed, 05/20/2009 - 11:00am

(double post)

13
by Temo :: Wed, 05/20/2009 - 9:30am

"Brown had that money for 2 years, and could've turned the money he did have into more with proper investing. Granted, it's unlikely he could've made up the full difference, but to blindly compare the numbers ignoring the time difference is unfair."

Applying a 5% discount rate would barely dent the difference, it's immaterial.

59
by Pat (filler) (not verified) :: Thu, 05/21/2009 - 12:43pm

"Applying a 5% discount rate would barely dent the difference, it's immaterial."

Depends on what the person does with the money, for one. But that's not really the point - as I said, it doesn't come close to making up the difference. Brown got to live those two years with that much money. It's difficult to put a price on "being able to live comfortably."

Hence the reason why so many players make the jump from college to the NFL early, even when they would probably make more money staying in college and increasing their draft stock. They want the money sooner.

85
by Pat (filler) (not verified) :: Tue, 05/26/2009 - 7:33pm

I also think you can't ignore the years that Sheldon Brown *was not* on his rookie contract. Brown was a second-round pick: his contract was pretty mediocre, probably consisting of a ~$1M signing bonus plus minimums, with a total value probably around $2.5M.

If he had waited until free agency (5 years), and then signed Allen's contract and played it out, he would've earned around $18M over 10 years. With his current contract, if he plays it out, he'll earn probably around $27M total.

It's easy to just look at Brown's contract, and compare it to current cornerbacks, and say "man, he's underpaid" but I just don't think that it's true.

87
by Jimmy :: Wed, 05/27/2009 - 10:00am

Pat I can understand if you think Brown's predicament is his own fault but the guy is underpaid for the calibre of player he is. Brown is probably not going to get the $9.25m due to be paid over the last two years of his contract and his total compensation for his (probable) nine years as an Eagle will end up being $17.75m. There will be no money pro-rated on his contract at that point so the Eagles will be able to walk away from his contract with impunity.

Will Allen's second contract will pay $17.5m over four years, plus whatever money he will have received on his rookie deal and hitting the market again as a younger man. It isn't as though Allen is as good a player as Brown, yet is likely to end up more richly rewarded. If you compared it to Foxworth's contract it looks even more lopsided and will likely look even more so when the next round of free agency starts next March. Hobbs and Hanson are due to be better paid than Brown next year even though they are backing him up.

89
by Pat (filler) (not verified) :: Wed, 05/27/2009 - 3:01pm

"Brown is probably not going to get the $9.25m due to be paid over the last two years of his contract"

Uh, so long as he doesn't throw a fit, he probably will. Brown can and does play safety in some packages, and $4M and $5M per year for a safety in 2011 and 2012 is really no big deal. The Eagles don't cut guys who can play just because they cost a lot in base salary. It doesn't happen. Especially when you're talking about guys who cost under $5M/year; at that level, it just doesn't matter.

"Will Allen's second contract will pay $17.5m over four years, plus whatever money he will have received on his rookie deal and hitting the market again as a younger man."

Allen's rookie contract has nothing to do with the discussion: rookie contracts are based on draft slot, and Allen was a higher draft pick. If you want to compare Brown to Allen, you have to use Brown's rookie contract and imagine Allen's free agent contract. And Brown's rookie contract, like all non-high first round picks, sucked.

If you do that, like I said, then you just showed that Allen and Brown had nearly identical compensation levels through 9 years: around $17.75M versus ~$19.5M with Allen's contract. If you take into account the fact that Brown got his money three years ahead of time, he easily comes out ahead with interest - you'd only need to assume something like a 3-4% interest rate and he easily beats out Allen's contract.

Even if you take into account Allen's most recent deal, the two stay pretty close - Allen picked up two extra years for around $12M new money, which is comparable to the $9.25M Brown is paid in the last two years.

"Hobbs and Hanson are due to be better paid than Brown next year even though they are backing him up."

They're all basically paid the same. Hobbs is paid more only if you ignore Brown's signing bonus proration, and Hobbs is in the final year of his contract anyway. Hanson is paid the most but he's also the youngest, his compensation is basically static over the life of the deal (Brown's higher in 2011/2012), and this is the highest cap value year of his entire contract.

I don't know why people ignore this point: Hobbs is 26. Hanson is 27. Brown is 30. Hanson is being paid for future consideration, and if Hobbs were to get a new contract, it would *also* be for future consideration. You wouldn't expect them to be paid the same. Still, no one can look at Brown's contract in 2004 and Hanson's recent contract and think that Hanson is being paid better than Brown. They're pretty comparable, and it's five years later.

"and will likely look even more so when the next round of free agency starts next March."

At which point Brown will be a year older! You can't keep comparing a 30-year old CB's contract with guys who are 25. The guys who are 25 will be working longer. Will they earn more? Yeah, sure, because the NFL's growing at nearly 10% per year. But unless Brown invents a time machine, there's nothing he can do about that.

You can't compare Brown's compensation to Hanson, Hobbs, or Dominique Foxworth, or Random CB X Who Is Five Years Younger. You can only compare it to CBs his age, and he's really not that far behind. The "is he underpaid" argument rests entirely on whether or not you think he's one of the top CBs at his age, and I don't think he is. I think he's "good," which means honestly, he's probably about right.

90
by Pat (filler) (not verified) :: Wed, 05/27/2009 - 5:57pm

The other problem with the article (and the grandparent's argument) is that Sheldon signed a 5-year rookie contract, not a 4-year one. He wouldn't've hit free agency until 2007.

91
by J.I. Halsell :: Wed, 05/27/2009 - 11:55pm

Actually, year 5 of his rookie contract contained a voidable which he had earned, therefore, he would've been a UFA after year 4.

Coincidentally, anyone notice that Will Allen just got $10M guaranteed after getting $4.5M guaranteed in 2006? You know why Allen got a new deal? Because 2009 was the last year of his contract; therefore, had Brown not signed a 9 year contract, perhaps, he'd also be receiving another contract like Allen.

J.I. Halsell
UNDER THE CAP

94
by Pat (filler) (not verified) :: Thu, 05/28/2009 - 3:20pm

Except that that $10M guaranteed is also roughly what Sheldon will earn over the same time period if he's still with the Eagles through the end of that contract.

If Sheldon plays through the end of that contract, I don't think it actually was that bad a deal for him at all. Certainly not "factors of two" bad.

92
by Jimmy :: Thu, 05/28/2009 - 8:27am

I can understand folks who say 'He signed the contract, he should play it out'. I don't agree with it, but I can see the point. I struggle to see how you think he is actually well paid.

I would also dispute the level to which NFL contracts reward future performance or rather how far into the future. My contention would be that players get paid for what they are expected to produce over the three years after they sign their contracts, with non-guaranteed contracts (and the massive injury risk to any player) anything longer than three years is wishful thinking. So were Brown to be a free agent I would expect him to get more money than Foxworth or Hobbs or any number of younger players because he is better than they are. You complain that I have compared him to younger players, well stop comparing him to worse players.

What I really don't get is why the Eagles don't simply find a way to accomodate an increase in salary using some of their vast reserves of cap room. I would suggest moving some of his salary due in the last couple of years forward and guaranteeing it along with a reasonable signing bonus (say $5m), maybe add another year with a large(ish) base salary. Alternatively tell him you would trade him next February if he behaves.

95
by Pat (filler) (not verified) :: Thu, 05/28/2009 - 3:25pm

"I struggle to see how you think he is actually well paid."

It's called "math." You take his rookie contract, add it to the free agent contract a similar age CB got in the year he would've hit free agency, and compare it to the money he *actually has* earned, and use nominal appreciation rates to compensate for the time difference when the money showed up. And surprisingly, in the end, they're not that different.

"So were Brown to be a free agent I would expect him to get more money than Foxworth or Hobbs or any number of younger players because he is better than they are."

*On average*, a guy Brown's age is declining. Corners at Foxworth, Hobbs, and Hanson's age are improving. You don't pay increasing money to an asset that's declining in value - you pay increasing money to an asset that's increasing in value.

In two years, I don't think Brown will be better than Hanson at CB, for instance.

98
by Jimmy :: Thu, 05/28/2009 - 8:37pm

I understand maths. It isn't all that difficult, even when placed in inverted commas. Just because I disagree with you doesn't mean you have to try to belittle me. When I said I struggle to understand it was a genuine reaction. Loads of Eagles posters on this forum have said on numerous occasions that he outplayed Sheppard during several seasons and many also voiced the opinion that he should have gone to the Pro Bowl (not that I neccessarily believe that). I happen to think that such a calibre of player deserves to get paid more over the course of his career than he is likely to and as such has a legitimate problem he needs to try to get resolved, even if the problem was of his own - or his agent's - making. If I were Sheldon Brown I would want to do something about my projected compensation over the last five years of my career. The Eagles seem to be refusing, this clearly ceates an impasse. It would probably be for the best for the Eagles to find a way to resolve it if they want to win a championship.

100
by Pat (filler) (not verified) :: Tue, 06/23/2009 - 12:01am

"I understand maths. It isn't all that difficult, even when placed in inverted commas. Just because I disagree with you doesn't mean you have to try to belittle me."

I'm not belittling you at all. You asked how I could see that he's well paid. There's no magic in that: you just take a look at the money he's received, adjust it assuming a decent investment rate, and compare it to what he would've earned on the free market after playing out his rookie contract.

And when you do that, it's not that different. He could've earned a little more in free agency, sure, but if he had also invested the money he received early very well, he could actually have earned more. It certainly isn't factors of two different between the two possibilities, and that's not even considering the fact that waiting until free agency had a lot of risk associated with it.

The only way Sheldon is severely underpaid is if he's actually been in the upper echelon of DBs in the league the past few years. I don't really think that's true.

99
by Jimmy :: Thu, 05/28/2009 - 8:43pm

Post deleted.

31
by Skummy (not verified) :: Wed, 05/20/2009 - 1:04pm

Decent article from the cap management perspective, but isn't another facet of the issue that the person with the final call on player personnel is GM coach? Seem to recall reading somewhere else that the Eagles have a long history of asking good players to extend contracts about two years before the contract expires. If the player refuses to extend, then the coach may sit them and lower their market value.

46
by deep64blue :: Wed, 05/20/2009 - 5:41pm

You seriously think Andy Reid would bench players for contract reasons and hurt his team, thats the crazy talk some of the players made but the fact is it was the players who let the contract situation affect their play leading to a benching.

2
by Tim (not verified) :: Tue, 05/19/2009 - 8:36pm

An entire article about players who sign early contract extensions without a single mention of the biggest reason why players may want to sign the extensions: the risk of injury.

If Sheldon Brown had torn his ACL in 2005, he still receives the guaranteed money in his contract. Without the contract, he would have gotten a lot less on the free-agent market. Therefore, Brown took less money sooner as a hedge against injury. It may not have been the best deal, but it needs to be considered when comparing his deal against other corners who waited until they hit the market.

Of course, Brown didn't get injured (and has been remarkably healthy). However, in the NFL, it's impossible to predict that a player will not get injured. Brown took out an insurance policy against getting injured, with the "premiums" being the money he didn't earn by signing the deal early. To complain that he's underpaid now is a little like a driver who has never been in an accident demanding his money beck from his insurance company because he's never had to use his insurance. It doesn't work that way.

Furthermore, the article also fails to mention how much, if any, extra money Brown made over his rookie deal (which is money Williams and Allen did not make).

All that said, it was still probably a mistake for Brown to sign the deal, but the issue has a few more angles than has been presented.

15
by Temo :: Wed, 05/20/2009 - 9:56am

Injury risk is overblown, even in the NFL. You can go out and get an insurance policy against injury from any insurance agency out there for far cheaper than the amount "paid" in lost wages here.

In fact, many rookie players (as well as some veterans... I know Greg Ellis did before his most recent contract) DO get insurance policies against themselves.

25
by Noah of Arkadia :: Wed, 05/20/2009 - 12:03pm

I totally agree with Tim. And the contract is not only insurance against injury, but also against not blossoming as a player. These guys took the sure money instead of gambling on getting more later, and now they want the lottery ticket back because it turned out to be a winner. I'm glad the Eagles don't let them off the hook easy.

I'm sure injury insurance for an NFL player is very, very expensive. Insurance companies don't lose, you know.

34
by Temo :: Wed, 05/20/2009 - 2:11pm

You're right, insurance companies don't want to lose money. So what does it say that many rookie players, combine guys, even college guys can afford insurance policies? In this day, medical technology is advanced enough that the threat of a career-ending injury is fairly low. A blown ACL is a 1-year hiccup and usually results in players returning in prime shape-- unlike earlier in the '90s when I remember a guy like Kevin Smith would go from Pro Bowl CBs to also-rans after ACL injuries.

Also, I never once said that the early-extension contracts AREN'T an insurance policy, I'm just saying that they are unfairly priced for the player. And it's not the Eagles' job to price them fairly, it's their job to get the best deal they can get. The agents failed their players in this regard, and is another reason why Drew Rosenhaus (a good player agent) doesn't represent any of these guys.

Furthermore, I have no objection to these players agitating to get fairer pay when it's their entire livlihood at stake. Sheldon Brown will not be able to sign another contract at age 34. This is all he's got, and he's being underpaid. Yes, it's his fault for signing the contract, and he will have to live with whatever consequences come from it. But the Eagles will also have to live the consequences of getting "too" good a deal, as well.

43
by Independent George :: Wed, 05/20/2009 - 4:05pm

In this day, medical technology is advanced enough that the threat of a career-ending injury is fairly low. A blown ACL is a 1-year hiccup and usually results in players returning in prime shape-- unlike earlier in the '90s when I remember a guy like Kevin Smith would go from Pro Bowl CBs to also-rans after ACL injuries.

This is true of the top-tier players. For a 4th-round nickelback/special teamer without a lot of years in the league, a torn ACL may be the end of his career.

58
by Scott de B (not verified) :: Thu, 05/21/2009 - 11:34am

Hmmm. From what I've heard, insurance companies pretty much stopped insuring athletes four or five years ago. Too high-risk.

29
by The Guy You Don't Want to Hear (not verified) :: Wed, 05/20/2009 - 12:57pm

Thank you for posting that. I, for one, did not know that players could purchase insurance of that type.

83
by jackrussellterror (not verified) :: Sun, 05/24/2009 - 10:09am

Tim you are EXACTLY right. Shawn Andrews got paid all last year even though he was 'injured' (with a mental problem no less).

A long time back (before the current Eagle regime) I think 30 year old linebacker Byron Evans refused a contract extension (the current Eagles wouldn't do this with a 30 year old) and suffered a career ending knee injury in a few weeks.

Its great to say how much, for example, McNabb would have made .. except what if his free agency was right after the year he tore his knee up?

db

86
by DeltaWhiskey :: Wed, 05/27/2009 - 9:59am

"...(with a mental problem no less)."

Please explain, lest I think you stupid.

93
by John Walt :: Thu, 05/28/2009 - 11:15am

I am pretty sure he was out with clinical depression.

96
by Jerry :: Thu, 05/28/2009 - 4:59pm
97
by DeltaWhiskey :: Thu, 05/28/2009 - 5:59pm

It's the "no less" part that I'm questioning.

3
by Harris :: Tue, 05/19/2009 - 8:38pm

A thousand words to explain a conclusion the entire city of Philadelphia reached two months ago. Impressive.

Hail Hydra!

4
by Key19 :: Wed, 05/20/2009 - 12:00am

Well I enjoyed it.

12
by Temo :: Wed, 05/20/2009 - 9:29am

Screw you, I liked it.

19
by pcs :: Wed, 05/20/2009 - 10:35am

If FO ever intends to grow its audience, it needs to quit writing for the 300 million people who live outside Philadelphia.

54
by Chris UK (not verified) :: Thu, 05/21/2009 - 9:04am

Yeah, because nobody outside the USA reads FO.

5
by njjetfan12 :: Wed, 05/20/2009 - 2:13am

I liked this piece, and I think it gave a good explanation of Brown's current situation. As one of the posters mentioned above, however, it's important to remember that when the injury risk is considered, the guaranteed money must look alot better

6
by CornerBlitz (not verified) :: Wed, 05/20/2009 - 3:28am

This is generally true of ALL athletes. I'm a huge sports fan, but I really wish most of these guys would realize that they play a game for a living for more money than teachers, firemen, cops, soldiers, or even most doctors and lawyers will never see in a lifetime. I work in a job where a lot of my peers make three times what I do, but that's what I signed up for (I'm in the military).

Sudden magnanimity notwithstanding, however, it's interesting that teams with a need at corner aren't making offers Philly can't refuse for Brown, especially those with a lot of cap room. Tampa and Miami come to mind almost immediately, and there are a half-dozen others that probably qualify as well.

I did think this was an interesting breakdown of how the corner market has fluctuated since Brown signed that extension, and should be required reading for all players in the final year of their contract. If they can't do the math themselves (or their agents can't), then they are stuck with what they get.

45
by Jerry :: Wed, 05/20/2009 - 4:31pm

I'm a huge sports fan, but I really wish most of these guys would realize that they play a game for a living for more money than teachers, firemen, cops, soldiers, or even most doctors and lawyers will never see in a lifetime. I work in a job where a lot of my peers make three times what I do, but that's what I signed up for (I'm in the military).

When you leave the military, you can enter any of the professions you listed (assuming an appropriate education, which you can get). Unless you're incredibly skilled and sufficiently young, you won't be a professional athlete.

52
by CornerBlitz (not verified) :: Thu, 05/21/2009 - 5:37am

Point taken. However, I think you missed mine. Sheldon Brown, and every other athlete in the three major sports, makes more money on one contract than 99% of people will in their natural life. For playing a game. At some point, the Latrell Spreewell argument loses its luster. For me, that point is the very beginning. The lowest paid player in the NFL is on $350K per contract.

It's not a question of talent. Athletics are a questionable talent at best anyway, considering it's entirely likely that Sheldon Brown could not cut it as a teacher, fireman, soldier or the like (remember Riddick Bowe going to USMC basic and washing out in two days?). My sympathy is thin for the pro athlete.

62
by Jerry :: Thu, 05/21/2009 - 6:08pm

The ticket receipts for any single NFL game are also more money than 99% of us will see in our natural lives. Ticket prices and salaries both have everything to do with supply and demand. While you can argue that there are better ways to spend the money, we as a society have freely decided that we're willing to spend as much as we do to be entertained by football players, and the economics of the league reflect that.

65
by CornerBlitz (not verified) :: Fri, 05/22/2009 - 12:18am

Now THAT I absolutely can't argue with. The economics of the American sports infrastructure have made player salaries what they are. I still believe that if Brown SIGNED the contract knowing the ramifications, he is obligated to play it out. The same goes for Anquan Boldin, Darnell Dockett, etc. I have little patience for holdouts. But you're absolutely right about ticket sales (and TV deals, and advertising, and...) driving the economy of the game, and salaries reflecting that. I don't have a dog in that fight (ooh, bad Mike Vick analogy...my bad).

66
by CornerBlitz (not verified) :: Fri, 05/22/2009 - 12:20am

And I still want to see Sheldon Brown in Tampa, but that won't happen. He's a good player that fills the need for a man cover guy that the Bucs don't have.

7
by deep64blue :: Wed, 05/20/2009 - 4:51am

I agree with others - Brown would have got his money if he had a career ending injury the next day.

The Eagles have these unhappy players sometimes but most of the team seem to be happy that they are being well-paid (not top of the market but still serious money) whilst playing for a consistently winning team in excellent facilities.

8
by Bright Blue Shorts :: Wed, 05/20/2009 - 5:05am

It's a great summary of all the factors.

Question is, is it smart on the part of the organisation to employ people at below-market rates know that they'll later become disgruntled? I don't think there's a person alive who wouldn't bitch about receiving half the pay of their counterpart even if it was entirely their own fault for signing a 9-year contract. I'm doubtful many athletes will rationalise it to themselves as "Well, I did sign the contract and hey I do earn $3 million per year which is way above the average fan".

Probably it would make sense for the team to put some realistic incentives/bonuses into the latter part of the contract that would increase the pay to nearer market rates, thereby giving the player less room to be disgruntled yet still being cost-beneficial.

22
by DrewTS (not verified) :: Wed, 05/20/2009 - 11:10am

Agreed. While the article is quite right that Brown is largely to blame for signing the contract, it's not a good idea to try to hoodwink someone you're going to be working with for a long time, even if they're not smart enough to stop you. Sooner or later, they're going to figure out that they got played, and they're going to be mad about it. And especially if the goal of the franchise is to lock players into long deals at below-market levels (as the article suggests), you have to know that this kind of situation will be coming. So yeah, Brown signed the contract, but I refuse to take the Eagles' side on this, because they should have known that he'd become disgruntled about it later.

I think the real culprit in this is the agent. When you allow a player to sign such a long deal with such a comparatively small signing bonus, you should (again) know that he's going to be upset about it later. Maybe the player thinks it's a good deal and doesn't understand what he's getting himself into. It's the agent's job to MAKE him understand. My bet is the agent saw a commission he could collect right now and decided to take it, rather tell his client that his interests would be better served by waiting two more years to do a deal.

47
by deep64blue :: Wed, 05/20/2009 - 5:45pm

Nobody was hoodwinked.

The player, advised by his agent, made a strategic decision to take the cash up-front rather than risk waiting. No trickery, no deception - just a hard-nosed business decision on both sides.

9
by Jimmy :: Wed, 05/20/2009 - 8:45am

Yes the players do sign the contracts but everyone can see that the player (Brown in this case) is getting screwed. Maybe he screwed himself, maybe his agent screwed him by simply wanting 3% of $7.5m as soon as possible. The fact of the matter is he is under contract until he is 34 - effectively the remainder of his NFL career - for a salary way under market value. Irrespective of who's fault it is, the contract is screwing him and he quite understandably wants to do something about it.

Joe Banner said that it was unprecedented for a player to get his contract renegotiated after such a short period, inferring that the Eagles won't be offering to adjust Brown's contract anytime soon (I would be interested in Mr Banner's take on exactly how Jason Peters engineered his trade out of Buffalo). So Brown has no way of sorting out his contract problem other than moaning and asking for a trade or release. At the point on his career he is at now he would be better renumerated financially for his career if he mailed it in to the Eagles so very badly that they cut him so he could go and play for a different team on a prove it deal and then try for a new deal in two years. Why would any front office structure a contract in such a way that it entirely disincentivises the player?

If Sheldon Brown were the only Eagles player fed up with his absurdly long deal then everyone calling him a whiner would have a good point. The list of similarly pissed off players on the current roster runs to several starters - Westbrook, Brown, Cole, Andrews, Patterson - not including players who have left under similar circumstances (ie Sheppard) and even the QB is trying to get himself a new contract. Yes each individual player signed his own contract but so did the Eagles. Some of these agents were clearly not doing a very good job and the Eagles front office used that fact to screw their own players. If one player is unhappy with a contract he signed then he could well just be a whiny git, when half a dozen starters have exactly the same problem it might be something the team is doing that is creating the problem.

If Brown ends up playing out his contract with the Eagles one bad decision on who to hire to represent him when he was a young man will end up costing him at least 50% of the money he could have earned during his career. He will have watched the Lito Sheppard situation and observed that whining and getting dropped to fourth on the depth chart has been much more financially productive than working hard to produce for the Eagles. Yet the Eagles current stance is to invite him to do the same. At the moment he is even getting paid less than both the players under him on the depth chart.

What really baffles me about this whole situation is that the Eagles have $30+m of cap room and could easily offer to amend some of the one sided contracts and solve what could be quite a big problem in their locker room.

27
by Noah of Arkadia :: Wed, 05/20/2009 - 12:16pm

These players are not getting hoodwinked or screwed. There is a good reason why they sign these contracts. It's another thing that they decide not to own up to their decisions. The players who are complaining now are the ones you wouldn't want to trust with the family jewels, IMO.

Maybe an article about players that actually did win by signing these kinds of contracts would be in order so we could all see the two sides of this thing.

28
by DrewTS (not verified) :: Wed, 05/20/2009 - 12:51pm

Perhaps "hoodwinked" and "screwed" are not the right words for it, but the fact remains that the Eagles should have easily been able to foresee that Brown would become unhappy with the deal in the future. As someone else already said, any deal longer than about 5 or 6 years is a bad idea for the player AND the team.

I see it a lot like I see the mortgage fiasco. If you set someone up with a mortgage that they likely won't be able to handle, and then they get foreclosed on, who's fault is it? It's tempting to just shrug and say "stupid people living beyond their means", but the answer is that the borrower and the bank both made an ill-advised deal, and they both end up worse off for it.

60
by Pat (filler) (not verified) :: Thu, 05/21/2009 - 12:46pm

"As someone else already said, any deal longer than about 5 or 6 years is a bad idea for the player AND the team."

Both Greg Lewis and Reggie Brown were signed to long-term contracts early on. Both of those contracts ended up being very fair for both parties involved.

Not everyone becomes a top-level player.

68
by DrewTS (not verified) :: Fri, 05/22/2009 - 8:50am

Well, yeah. When you've just signed for all the guaranteed money you're ever going to see in your whole career, there's a lot less incentive to do so. There's personal pride, but the monetary incentive is largely gone.

The main point I meant by "bad for the player and the team" is that doing these long deals (as others have also noted) creates a backward set of incentives for the player. A player who signs and then fails to live up to expectations (R Brown) gets a good deal. A player who signs and continues to play well and improve (S Brown) gets to watch as the market for comparable players passes him by. Yes, it's a gamble the player and team make, and you don't know at the time who will come out ahead. But at the end of the day, playing well should be rewarded, and playing badly should not. Keeping your bad players happy and your good players pissed off is not good for the team. You'd think the Eagles, of all teams, would know how much havoc a disgruntled player is capable of causing if they become so inclined.

30
by mawbrew :: Wed, 05/20/2009 - 1:01pm

I thought the Eagles were brilliant cap managers for taking this approach. I have to admit I would have made the same 'mistake' they made. But as Halsell notes, these are not assets without emotions. And as you point out, the incentives after a few years of solid play are all messed up. When the player's economic incentives are to screw-up enough to get cut/traded (ala Peters) it's not a good situation for anybody.

35
by Jimmy :: Wed, 05/20/2009 - 2:21pm

If you are only interested in how the Eagles cap shape looks then they are great deals.

33
by Harris :: Wed, 05/20/2009 - 2:07pm

Westbrook already got a new contract. Cole and Andrews have said they're not worried about it. Moreover, Andrews doesn't really have an argument after missing two full seasons in four years and openly questioning his own commitment to football. Patterson has said he's not thrilled with his deal, but he signed it after dealing with injuries knowing that he'd be set for life no matter what happened so he won't complain.

The flip side that goes unmentioned in all this is Reggie Brown. He took the long-term extension and the big signing bonus and after dealing a few injuries, he's lost his starting job and may not make the team. I don't see Sheldon arguing that Reggie should cut the Eagles a check.

Hail Hydra!

36
by Temo :: Wed, 05/20/2009 - 2:35pm

Brown was traded to the Jaguars for a 2010 2nd round pick.

38
by Jimmy :: Wed, 05/20/2009 - 3:10pm

Do you mean Reggie or Sheldon?

Reggie is still on the Eagles roster on NFL.com.

40
by Temo :: Wed, 05/20/2009 - 3:33pm

Nevermind, I'm a moron.

49
by Jimmy :: Wed, 05/20/2009 - 7:07pm

It seemed really realistic with all the detail on the trade and so forth.

50
by Temo :: Wed, 05/20/2009 - 7:19pm

Never trust what your friend tells you he read on wikipedia. Yes, I'm a moron.

37
by Jimmy :: Wed, 05/20/2009 - 3:03pm

The flip side that goes unmentioned in all this is Reggie Brown. He took the long-term extension and the big signing bonus and after dealing a few injuries, he's lost his starting job and may not make the team. I don't see Sheldon arguing that Reggie should cut the Eagles a check.

The Eagles extended R. Brown towards the end of his second season (or soon afterwards) and I would agree that they haven't really gained all that much from their investment. They have paid him $13.8m for his four years in the league (a total of $11.8m in bonus money) but they have him under contract until he will be 34 and he is due to be paid less than $1m a year until then. The amount of pro-rated money on his deal means that if the Eagles do cut him this year they would take a cap hit of about $5m, which would guarantee him a roster spot if the Eagles weren't swimming in cap room. Once the Eagles gave him that kind of money for what amounts to his whole career there isn't really any incentive to put himself at risk of further injury by playing hurt.

Having said that there isn't much point in the Eagles cutting R. Brown if he is a servicable as he is only due to receive under $1.3m per year for the next three years. He must be worth that and he already know everyone's names.

42
by Harris :: Wed, 05/20/2009 - 3:57pm

If that kind of thinking drove these guys, no first-round pick would ever accomplish anything. Matt Stafford would be somewhere getting high with Jason Smith on some tropical beach right now. They're motivated by pride and competitiveness as least as much as money. Brown would be in the NFL today if he couldn't push himself beyond normal human limits. Yes, some guys get lazy after getting that big check, but I bet it's not as many as we like to think.

Hail Hydra!

41
by Rich Conley (not verified) :: Wed, 05/20/2009 - 3:39pm

"The fact of the matter is he is under contract until he is 34 - effectively the remainder of his NFL career - for a salary way under market value."

The other fact, is that the first couple years of that deal, he was being paid WAY OVER market value.

market value for a guy with 3 years left on a contract is league minimum. He was making $3M a year.

48
by Jimmy :: Wed, 05/20/2009 - 7:05pm

For his seven seasons as an Eagle Sheldon Brown has been paid approx $13m. For the next four years he will get $14m. It will also be all the money he ever gets in the NFL. That is assuming the Eagles would keep him around for his last two years for $9.25m and no cap hit if they cut him. If they did the Eagles would have paid him $17.75m for nine seasons as a starting NFL cornerback. It seems awfully cheap for a player as good as Brown.

57
by rk (not verified) :: Thu, 05/21/2009 - 11:29am

Check your math. That looks like $27 million to me.

61
by Jimmy :: Thu, 05/21/2009 - 1:03pm

Check yours.

$27m in total over the two contracts he has signed (for a total of 11 years). If they cut him in a couple of years they won't have to pay him the $9.25m of salary in the last two years of his deal. Leaving him with $17.75m over the nine years he would have gotten.

OK the last sentence of the previous post is rather poor. It is supposed to read 'if they do cut him'.

10
by Feagles - King ... :: Wed, 05/20/2009 - 9:10am

Interesting piece, but I agree that the fear of injury and time value of money angles should have been discussed a bit further.

14
by Temo :: Wed, 05/20/2009 - 9:45am

Time value of money would not make a big difference.

16
by parker (not verified) :: Wed, 05/20/2009 - 9:57am

I thought it was a good piece.

17
by parker (not verified) :: Wed, 05/20/2009 - 10:04am

p.s- He signed the contract, he's got to play it out or play his way out of it. Its a little like the guys who get married and don't realize that the beautiful 21 year old figure their new wife has isn't going to stay that way forever. In both situations a little foresight would have been prudent.

18
by Joseph :: Wed, 05/20/2009 - 10:32am

Yes, but (sticking with your metaphor) he gets the 21 yr. old figure for as long as it stays that way--which in some cases is until baby #1 (or #2) is born. For others its into their 40's. The other incentive is (generally speaking) he doesn't have to share that 21 yr. old figure with other males.

Regarding the actual article--good move cap wise by the Eagles. Probably would be better served for other 2/3 yr. vets to add incentives toward the back end of the contract to account for salary and cap growth in the long term so that this and the Sheppard situation don't happen every offseason.

20
by Temo :: Wed, 05/20/2009 - 10:57am

Well considering the divorce rate in the US, and that people are basically hounding Brown for pursuing the only recourse for a 'divorce' that he has available.

84
by MurphyZero :: Sun, 05/24/2009 - 10:30pm

That plus if he has the slightest injury, he has no incentive to go back on the field. He has little incentive to play hard even if not injured. Other comments have mentioned the "He signed a contract, he needs to live it out to term" need to remember, not once in those contracts is a responsibility to give '100%'. Often the difference between one team beating another is one team giving 100% and the other only at 98%. Players not giving their all because they feel slighted can come back to haunt a team (The other situation: a player not giving their all because they just got their big contract also can kill a team)

23
by Drunkmonkey :: Wed, 05/20/2009 - 11:25am

I'm pretty sure that the reason he wants a new deal is because he thinks he has played his way out of it. He feels like his level of play is too high for the level of pay he is receiving, and wants a new deal.

24
by AlexDL (not verified) :: Wed, 05/20/2009 - 11:49am

Concise summation. Nothing more to it, nothing less.

26
by tuluse :: Wed, 05/20/2009 - 12:14pm

Deals this long are just stupid in the NFL. Any player worth having that long will be unhappy by the time it's halfway over, or a player won't be good enough and if there is any guaranteed money in the back end of the deal, the team is left paying a player who's not on the team.

32
by Rob (not verified) :: Wed, 05/20/2009 - 1:54pm

Taken from the date the deal was signed, I don't think this was a bad move by either side. Eagles took a risk by paying the upfront money for a 2 year player, given that he still was developing and the avg. NFL career is much shorter than 11 years (I think the avg. is 3 years). Brown gave up the bigger future payday but locked up significant money upfront and protected himself against injury and lack of improvement on his part. Maybe the contract length was a too long - 6 years might have made more sense for both sides.

39
by Rich Conley (not verified) :: Wed, 05/20/2009 - 3:32pm

"However, when put into perspective, is this $7.5 million today worth the under-compensation over the course of the contract in the long run? Definitely not"

It surely is if you blow your knee out that year.

44
by MJK :: Wed, 05/20/2009 - 4:24pm

Liked the article, although I agree that it leaves out the "insurance" aspect of signing early extensions. To be fair, the author alludes to that, when he mentions the "emphasis by agents and players on guaranteed money". People should keep articles like this one in mind when commenting about player or team moves.

For instance, consider Brown's teammate, Asante Samuel. You often hear people saying things like "the Patriots made a big mistake in not locking him in for years to come". What that ignores is that the Patriots tried to. Samuel was offered contract extensions of various lengths by the Patriots in both the third and fourth years of his rookie deal. By his fourth year, he was starting to look really really good, but in his second and third year he was only an average #2 corner, albeit with potential to become better. However, Samuel rejected all of these offers, electing instead to take his chances with injury and performance (and possibly rightly judging that a free agent from a team with multiple superbowl wins would be overvalued in the free agent market). Could the Patriots have offered him more and maybe gotten him signed to an extension? Yes, had they offered enough to make Samuel's perceived risk in waiting for FA too high relative to the payoff. But in the process, they would have subjected themselves to greater risk that he wouldn't pan out.

It's all a gambling game, for both the players and the teams. Brown's case occurred because both he and the Eagles were risk averse. The Eagles weren't willing to risk a huge extension for an unproven player, and Brown wasn't willing to risk that he wouldn't get injured or decline in skills.

51
by Xeynon (not verified) :: Thu, 05/21/2009 - 2:22am

At the point on his career he is at now he would be better renumerated financially for his career if he mailed it in to the Eagles so very badly that they cut him so he could go and play for a different team on a prove it deal and then try for a new deal in two years.

Not so sure about that. If he were to do this he'd hit the market as a 32 year old CB who was never a game-changing player even at the height of his career. What's the market for those types of guys? Not much better than what Brown's current contract will pay him, I'd venture (his base salary escalates each year, I believe beginning after next season).

The list of similarly pissed off players on the current roster runs to several starters - Westbrook, Brown, Cole, Andrews, Patterson - not including players who have left under similar circumstances (ie Sheppard) and even the QB is trying to get himself a new contract.

On what do you base this assertion? Westbrook signed a new contract, Cole and Patterson have said they think their current deals are acceptable if not ideal, and Andrews has said he knows he has to prove he can stay healthy and committed before he worries about his contract. As for McNabb, he wants a new contract, but I suspect that has everything to do with wanting to know the team is committed to him beyond 2010 and relatively little to do with his salary (he has never complained about his salary).

If Brown ends up playing out his contract with the Eagles one bad decision on who to hire to represent him when he was a young man will end up costing him at least 50% of the money he could have earned during his career.

And my bad decision not to get involved in stock trading as a fifteen year old and invest in EBay at $8 a share has ended up costing me way more than 50% of the money I could have earned by now. That's life. There is no rule that says anyone is guaranteed to make as much money in the real world as they are under their own financially ideal alternate-reality scenario. You look at your circumstances, make the best-informed and carefully planned decision you can, and accept the consequences, good, bad, or less-than-ideal. Brown's decision resulted in less-than-ideal financial remuneration from his chosen career; tough cookies. If he wanted to hit the free agent jackpot the way Asante Samuel did, he should have taken the risks Samuel did, played out his rookie contract, and gone on the market. You can't have security AND guaranteed returns.

He will have watched the Lito Sheppard situation and observed that whining and getting dropped to fourth on the depth chart has been much more financially productive than working hard to produce for the Eagles.

Except that it hasn't. Lito Sheppard is scheduled to make $3 million this year, which is exactly the same salary he was scheduled to make under his old contract. On the 5th day of the next league year he's due a $10 million roster bonus; I'd venture to say he has about as much chance of collecting that as Salman Rushdie does of eating his dinner with the Grand Mullah of the Taliban tonight. Now granted, if the Jets don't pay it he becomes a free agent, but I doubt he's going to break the bank as a 29 year old CB with proven histories of susceptibility to injury and inconsistent play, even if he has a great season in 2009 (hardly a given, since he's now playing with inferior defensive teammates and against the Patriots twice a year). It remains to be seen whether the market for such a player is going to pay more than his old contract would have had he continued to play under it.

55
by Jimmy :: Thu, 05/21/2009 - 9:29am

The remainder of Sheppard's contract following this year is a four year $20m deal with $10m guaranteed on a team that has plenty of such contracts. It is reasonable money for the player and more than he would ever have gotten out of the Eagles.

Not sure what to make of your entirely irrelevant stock trading story.

53
by J.I. Halsell :: Thu, 05/21/2009 - 8:58am

I appreciate everyone's comments and have enjoyed reading the banter. To a couple of points, I agree I could've probably been more explicit in articulating the "fear of injury" aspect, but as one commenter pointed out, that's an underlying reason to why players & agents place such an emphasis on guaranteed money.

The Reggie Brown example that a reader brought up is actually a compelling example of this early extension working in the favor of the player, purely from a compensation standpoint. Brown is a player who in the middle of his 2nd year signed an early extension that locked him up until age 33 but would ultimately pay him $10M guaranteed; as it stands today, he's at best their 3rd receiver and probably more realistically their 4th receiver. That's a pretty penny paid for a 3rd or 4th receiver.

Definitely keep the comments coming and thanks for reading!!!

J.I. Halsell
UNDER THE CAP

56
by parker (not verified) :: Thu, 05/21/2009 - 11:03am

So basically we've got a game of Deal or No Deal with Sheldon Brown being the contestant. And crowd is yelling no deal, except he already took the deal.

88
by Dean :: Wed, 05/27/2009 - 1:44pm

Loved the article (even if, as Harris suggested, I'd reached the same conclusions long ago). The one point I want to make that hasn't been made yet is simple.

Sheldon Brown ASKED THE EAGLES FOR THE CONTRACT.

He wanted this deal. Now he doesn't want to fulfill it. Yes, the Eagles have a history of making these kinds of deals, and in most cases it works out well for them. But nobody forced Sheldon. Quite the opposite.

63
by Xeynon (not verified) :: Thu, 05/21/2009 - 7:44pm

The remainder of Sheppard's contract following this year is a four year $20m deal with $10m guaranteed on a team that has plenty of such contracts. It is reasonable money for the player and more than he would ever have gotten out of the Eagles.

Except, as I said, he's not likely to get any of that money. Unless he suddenly morphs into Deion Sanders, I can't see the Jets paying him a $10 million bonus just to be on the roster, even in an uncapped year. He's just not worth that kind of money, and his value is likely to continue to decrease as he gets older and his injury history becomes more of a concern.

As for the stock trading story, it's not irrelevant at all - the point was that for Brown to look at the contract he signed now with 20/20 hindsight and determine that it's a bad deal is pointless. *When* he signed it, it was a good deal, and he should have realized at the time that he was sacrificing a chance to strike it rich as an UFA in exchange for a lot of guaranteed money earlier in his career than he would have otherwise gotten it. If he didn't realize the tradeoff he was making, that's unfortunate for him, but that's life - as my anecdote illustrates, we all make decisions we later regret. I suspect, however, that at the time he signed the deal, he probably DID realize that he was potentially selling himself short down the road, but was more worried about the risk of injury or poor performance costing him everything and decided that a bird in the hand was worth two in the bush. Now that things have played out such that he would have made more money had he become a free agent, he's upset and wants a re-do, but that's not how investing works in the real world, so I don't see how he can expect it to work that way in the NFL. And I don't see how he can expect sympathy from the fans when there are people who've lost their entire life savings to bad investments in the current economy. He needs to accept the consequences of the decision he made.

64
by J.I. Halsell :: Fri, 05/22/2009 - 12:17am

"He needs to accept the consequences of the decision he made."

When a team makes a mistake in signing a player, short of guaranteed money, the club - to a certain degree - does not have to accept the consequences of their decision, as their recourse is that they don't have to honor the remainder of the contract when they cut him lose. Conversely, when a player makes a mistake in signing a contract, they have no recourse because they are forced to honor the contract. Doesn't sound like an equitable system, but it's the system that's been collectively bargained by both the clubs & the players, and i doubt that this fundamental flaw changes after this coming round of CBA negotiations.

J.I. Halsell
UNDER THE CAP

70
by Rich Conley (not verified) :: Fri, 05/22/2009 - 10:51am

", short of guaranteed money"

Is the key phrase to your argument, and it makes your argument irrelevant.

71
by J.I. Halsell :: Fri, 05/22/2009 - 11:44am

Interesting that you think that it makes my position irrelevant.

So you're saying that guaranteed money makes this an equitable system for both the player and the club? The fact that a club can pull the cord on a contract at any point, while a player cannot do the same, is justified by the concept of limited guaranteed money when compared to the total value of the contract. In the case of a contract worth $30M with $5M guaranteed, is it equitable that if the club so chooses, they can at any point get out of paying the $25M that's non-guaranteed; while the player can't get out of receiving that $25M, if at some point he's out-played that number? Why does the club have an "at-will" option where they don't have to honor the contract, while the player does not have a similar "at-will" option to not honor the contract? Doesn't seem equitable at all; nor does guaranteed money from my perspective seem to justify this inequity.

Maybe guaranteed money helps a little bit in this inequity, but it surely doesn't make the dynamics of the system, nor my position, irrelevant.

J.I. Halsell
UNDER THE CAP

73
by Bad Doctor :: Fri, 05/22/2009 - 12:43pm

J.I. -- first of all, good first couple of articles, very well-done and, as you've seen, thought-provoking. Anyway, while I don't think the NFL's contract system would qualify as "equitable" necessarily, isn't it true that the guaranteed money evens the playing field substantially, rather than a "little bit"? Do you think if players successfully imposed guaranteed contracts in the next CBA that it would really be that much of a windfall?

Example: Haynesworth signed a deal that was widely reported as 7-year, $100 million. Those that looked at the contract said, "Practically speaking, it's really a 4-year, $48 million contract." If the CBA required that contracts be guaranteed, the way I see it, it's not like Haynesworth would instead be getting a 7-year, $100 million guaranteed contract anywhere ... he'd be getting a guaranteed contract that was about 4-year, $48 million on its face. He wouldn't really gain anything. (Except in case of injury in the first year ... as it currently stands, I guess he'd lose out on his designated 2nd through 4th year salaries, although it strikes me that most of the NFL's current non-guaranteed big money contracts make those amounts fairly nominal.)

Overall, the NFL spends (roughly) the salary cap times 32 for (loosely) 53 times 32 players in any given year. Force the league to have guaranteed contracts, they're still spending the same lump of money for the same number of players. Is there something I'm overlooking in this kind of analysis?

74
by DrewTS (not verified) :: Fri, 05/22/2009 - 1:39pm

I think the biggest difference with a guaranteed contract is that it could be structured on a more regular schedule. A 4 yr/$48 million contract could just pay out $12 million per year for 4 years. As it is now, all the guaranteed money tends to hit in the first couple years of the contract, because the teams want to preserve the option to cut the player if he declines, and also because it's human nature for the players to want their money sooner rather than later.

What ends up happening is, instead of a nice 12-12-12-12, you get a guy a pay-out structure something like 20-20-3-5. A guy sees his pay go from 20 down to 3, and he thinks he's being underpaid. The salary cap pro-rates that bonus over the life of the contract, but the player's mind doesn't. The average player doesn't understand (or conveniently forgets) the concept of "advanced payment for future work". Maybe that makes them stupid and/or shortsighted, but I don't necessarily think so. If your work gave you all your salary for the next 4 years right now, and then didn't pay you for the next 4 years, you'd probably be feeling a little iffy about that proposition somewhere in about year 3.

75
by J.I. Halsell :: Fri, 05/22/2009 - 2:08pm

I definitely appreciate the compliments on the articles; I'll try to keep it up.

By no means am I proponent of fully guaranteed contracts in the NFL. Practically speaking, from a financial perspective, a team would go out of business if it had to pay guarantees to every slappy that ever signs a contract. However, I am a proponent of some sort of "at-will" option for players. Currently, some contracts contain what's called a Voidable, which in some instances is contingent upon the player satisfying some performance threshold to earn the voiding of a negotiated amount of years of their contract; in other cases, the player doesn't even have to do anything to void a negotiated amount of years on a contract (although the latter is used more so to help teams from a cap accounting standpoint).

In short, clearly the clubs have a decided advantage over the players as it relates to the terms of their contracts; however, there are devices such as Voidables and "Franchise Designation Prohibitions" that help at least provide a player the ability to hit the free agent market if their performance so dictates.

As it relates to Albert Haynesworth's deal, take a look at my article breaking down that deal; it's actually 2 contracts in 1:
http://insidethecap.blogspot.com/2009/03/haynesworth-contract-detailsdon...

J.I. Halsell
UNDER THE CAP

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by Rich Conley (not verified) :: Fri, 05/22/2009 - 3:44pm

"The fact that a club can pull the cord on a contract at any point, while a player cannot do the same, is justified by the concept of limited guaranteed money when compared to the total value of the contract."

Yes, the club can pull the cord, but they don't get the guaranteed money back. There have been a significant amount of players who have signed big money deals and then been terrible, the club is on the hook there.

If a player is so worried about being underpaid, he should play every year on a 1 year deal. Thats his option.

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by Rich Conley (not verified) :: Fri, 05/22/2009 - 3:46pm

"Why does the club have an "at-will" option where they don't have to honor the contract, while the player does not have a similar "at-will" option to not honor the contract?"

Simple: They don't. The option to get out is IN THE CONTRACT. Don't sign it if you don't want to. The player has the option of going year to year to maximize money.

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by Jimmy :: Fri, 05/22/2009 - 12:31pm

It only makes the argument irrelevant if the total amount of bonus money guaranteed and the proportion of the total money in the contract are sufficient to leverage a team into effectively guaranteeing the player's roster spot for a number of years. Sheldon Brown's contract does nothing of the sort, $7.5m over nine years guarantees nothing. Except perhaps a pissed off starting corner.

In fact ", short of guaranteed money" is exactly what Sheldon Brown's contract is, why it isn't a fair contract and why the argument is very relevant.

69
by Jimmy :: Fri, 05/22/2009 - 9:47am

The Jets have Sheppard for this season for $3m and then have a deceision to make on picking up the next four years for $20m with half of that guaranteed. Baltimore just signed Foxworth for four years for $27m with half of that guaranteed. I would want Brown on my team over Foxworth. In the current NFl you don't need to be Deion Sanders to pick up $5m a year, you just need to be a decent corner. I would be surprised if Sheppard didn't get the roster bonus.

I still do not see how this has anything to do with investing or the world economic crash. The amount of fan sympathy the whole thing is generating is also of little importance away from ESPN message boards.

Yes Brown signed the contract but he probably thinks it is the worst mistake he has made in his life and under the CBA as it stands his only recourse once the Eagles refuse to renegotiate his contract is to bitch about it and hold out. As ridiculous as it sounds his best policy to maximise his earnings over the remainder of his NFL career would be to carry out the full Charles Haley routine to get himself cut as soon as possible. I wish there were a more edifying method that worked but the Eagles stance so far has removed most of those from play.

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by Xeynon (not verified) :: Fri, 05/22/2009 - 12:40am

When a team makes a mistake in signing a player, short of guaranteed money, the club - to a certain degree - does not have to accept the consequences of their decision, as their recourse is that they don't have to honor the remainder of the contract when they cut him lose.

A very fair point, but the rules are what they were collectively bargained to be, and Brown and/or whoever was advising him at the time he signed the deal ought to have known as much. I don't fault players at all for objecting to this aspect of the current system; they've got by far the worst deal for players in any of the four major sports, as they play the most brutal and debilitating game with the shortest career life expectancies, and have the least job security and guaranteed money. Players in Brown's situation need to take that up with the NFLPA leadership, though - not their teams.

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by MJK :: Fri, 05/22/2009 - 2:10pm

I think it's worth noting that, to my knowledge, there is NOTHING in the CBA or in league rules that stipulates whether or not contracts have to be guaranteed for either party. Please correct me if I'm wrong. But that means that the way things have worked out, where contracts are at-will for clubs but binding for players, has occurred because that is the type of deal that the majority of players and their agents, and the majority of clubs, have mutually decided through negotiation is the best for both sides. I.e. it is the state that lies closest to the so-called "Pareto Frontier" of the negotiation.

A player and his agent are absolutely free to refuse to sign any deal that is not guaranteed for both parties, like contracts in the MLB. I suspect such a player would then only find clubs willing to offer much less money per year than otherwise, and probably shorter total contract lengths. Taking the non-gauranteed contract has greater risk, but higher potential reward, for the player--assuming they stay healthy and their skills stay high or grow, they will not be cut and will reap the benefit of the higher salary associated with the non-guaranteed deal.

On the other hand, the player could refuse to sign any deal unless he had the option to leave after every year. In this case, the contract is essentially meaningless past the first year--since either the team or the player could terminate it at any time, and there's no point in signing more than one year contracts. The player is essentially a perpetual free agent. Neither the club nor the player (unless he's a highly sought-after superstar) would have any incentive to have this kind of situation--clubs would constantly be only able to keep just one or two of their best players in a given year, and players would have zero security if they ever got injured or had a bad year or a sudden drop off of skill.

The current structure that they usually adopt looks unfair--the club can cut you at any time, but you can't leave at any time--and would be if there were no such thing as guaranteed moenty or escalating salaries. But players and agents have figured out controls to equalize it. Signing bonuses effectively guarantee the first part of your contract, because it is financially painful under the cap to cut you early. And escalating salaries (a player's salary might jump from an average of 3M per year for the first four years to 15M per year for the last three of a seven year contract) give the player essentially an option to re-negotiate, get paid a king's ransom, or get auto-cut after a set amount of time, giving them an out or fair compensation if they don't get out. That is the main reason why those massive salary dummy-years get tacked onto contracts, not stroking agents' ego and PR as is often stated.

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by J.I. Halsell :: Fri, 05/22/2009 - 3:16pm

"The current structure that they usually adopt looks unfair--the club can cut you at any time, but you can't leave at any time--and would be if there were no such thing as guaranteed moenty or escalating salaries. But players and agents have figured out controls to equalize it."

Overall, very well presented & convincing argument. So the real criminals aren't the team or the CBA, but instead the agent who fails to leverage the controls of guaranteed money & salary escalators, as would seem to be the case of a Sheldon Brown?

Again, good argument!!

J.I. Halsell
UNDER THE CAP

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by Rich Conley (not verified) :: Fri, 05/22/2009 - 3:42pm

". So the real criminals aren't the team or the CBA, but instead the agent who fails to leverage the controls of guaranteed money & salary escalators"

no, there are no real criminals. Sheldon brown made an informed risk calculation. It may have turned out that he miscalculated risk. He has been paid well to offset that risk.

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by DrewTS (not verified) :: Sat, 05/23/2009 - 10:21am

You're assuming he made an informed and reasoned decision based on risk analysis. I find it equally plausible that his agent just didn't do a very good job of explaining the downside of a 9-year deal to him. I'm still of the opinion that no agent worth his commission would let a client sign a 9-year deal unless the signing bonus was scaled to match that length. But if the client wants to do that, a lot of agents would probably let them sign it, rather than risk losing a client/commission. The only agent I can recall taking a stand on an issue like this was Tom Condon with Ben Watson's rookie contract, and he did get dropped for it.

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by Rich Conley (not verified) :: Fri, 05/22/2009 - 3:50pm

MJK, IIRC, Adam Vinateri's deal with the Patriots was fully guaranteed.

I think that any player could get a fully guaranteed contract if they wanted, they're just going to take a total-earnings hit for that. Lower risk for the player means lower cash.