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19 Feb 2007

Too Deep Zone: The First Franchise Player

by Mike Tanier

Wilber Marshall was the first player ever slapped with the franchise tag. He was also the first player to get ticked off about it. Marshall's challenge to the franchise designation and football's newborn free agency system threatened an agreement that promised to usher in an era of labor peace and end a decade of work stoppages and lawsuits. It also touched off a four-month trading saga that featured multiple deadlines, harsh words, secret phone calls, late-night faxes, and intervention by the commissioner.

A New Peace

In 1992, free agency as we know it did not exist in the NFL. Major league baseball players won the legal right to negotiate with other teams once their existing contracts expired in the mid-1970s, but the NFL Players Association wasn't as strong as the baseball union. After a preseason lockout in 1974, NFL owners instated a plan that forced teams to pay compensation if they signed a free agent from another franchise. The ransom was steep -- a first-round draft choice -- so few free agents changed hands. The players battled to change the system during the 1982 and 1987 strikes but made little progress.

After the 1987 strike, the Players Association changed its approach, de-certified itself as a collective bargaining entity, and allowed individual players to challenge the league's free agency system in court. The owners sensed danger and instituted Plan B free agency: teams retained refusal/compensation rights for 37 players on each roster, leaving the rest to test the open market. Plan B free agency satisfied no one, and several players successfully challenged the system in court. Few big names changed hands under Plan B. Ironically, one of them was Wilber Marshall, who was lured away from the Bears with a five-year, $6-million deal in 1988.

By the end of the 1992 season, both players and owners knew that a new settlement was necessary. The league had been operating without a collective bargaining agreement for five years. Players were winning major court battles, and the antitrust case Reggie White v. NFL threatened the league's entire salary system. When commissioner Paul Tagliabue met with lawyers for owners and players that season, everything was on the table: free agency, a salary cap, even the abolition of the draft.

On January 6th, 1993, the Players Association and team owners agreed to a collective bargaining agreement that would bring free agency to the NFL. For the players, free agency came with two catches: a salary cap, which would take effect in 1994, and a new set of refusal-compensation designations that would severely limit the bargaining power of a handful of the league's top free agents. The most notorious of the new designations was the franchise tag: teams could offer an otherwise unrestricted free agent a one-year contract for a modest raise and take him completely off the open market. It was a shrewd gambit by the owners, who wanted to prevent salaries of top players from escalating as sharply as they had in baseball and basketball. But one right-of-refusal player per team was much better than 37 per team, so players accepted the compromise.

Scramble for the Tag

The CBA still had to go before a federal judge, but there was business to conduct while the players and owners waited for legal approval. Just days after the Super Bowl, a few weeks after the CBA was ratified, teams found themselves with a new off-season decision: to tag or not to tag. Facing a strict February 28th deadline to designate franchise players, owners and GMs hustled to comprehend and apply the new rules.

The first player to be unofficially tagged was Reggie White. A report surfaced in Philadelphia on February 18th indicating that the Eagles planned to name White as their franchise player. There was just one catch: White, a name plaintiff in an antitrust suit against the NFL, was granted absolute free agency as part of the CBA. Eagles owner Norman Braman hoped that by tagging White he would receive compensatory draft picks. At any rate, the Eagles delayed for several days before officially tagging a player whose rights they had already lost. On February 23rd, the Redskins officially tagged Marshall, a 31-year-old linebacker coming off a 138-tackle, six-sack, Pro Bowl season.

Other teams followed suit. The 49ers tagged Steve Young. The Buccaneers tagged tackle Paul Gruber. The Chiefs tagged defensive end Neil Smith. A total of 10 players were franchised in 1993, including two (White and safety Tim McDonald of the Cardinals) who weren't truly bound by the designation.

The Redskins were a team in transition when they franchised Marshall. Joe Gibbs left after the 1992 season, turning the reins of one of the league's most successful franchises of the previous decade over to Richie Petitbon. The Redskins had multiple free agents on their roster, including big names like Art Monk, Gary Clark, and Mark Rypien, any of whom could well have been franchised. They also planned to go shopping: they had their eyes on White or, if the Eagles superstar was too expensive, Saints defensive end Wayne Martin. But Marshall was a high-priority player who had made $1.3 million in 1992 and would only cost the Redskins about $1.6 million as a franchise player. It made sense to keep him off the market. "Retaining Marshall's rights means that if he plays for anyone next season, it will be the Redskins," Richard Justice wrote in the Washington Post the next day.

Or maybe not. On March 2nd, Marshall became the first player to formally object to the franchise tag when he filed a memorandum in federal court asking judge David Doty (who on February 26th gave preliminary approval to the CBA) to abolish the designation. "We think this is not a fair or a reasonable position into which Wilber should be forced," agent Richard Bennett said. A hearing date was set for April 16th. By then, all ten of the players who were franchised would file objections. Just days after it was first used, the franchise tag became the most reviled guaranteed pay raise in all of sports.

Waiting for the Judge

While Marshall waited for his day in court, the Redskins tried to trade their disgruntled linebacker. Buddy Ryan, Marshall's defensive coordinator for the 1985 Bears who was now coaching in Houston, lobbied hard to bring Marshall to the Oilers. In late March, the Redskins and Oilers agreed in principal to trade Marshall for a first-round pick, but Marshall's salary demands -- he wanted the Oilers to sign him for $3-million per year -- would upset his new team's salary structure. Ray Childress, the Oilers star defensive tackle, was demanding a raise from the $950,000 he earned in 1992, and he wouldn't take kindly to a new multi-millionaire in the locker room. Free agency was rapidly changing the economics of the game, and everyone wanted some of the action. Trade talks stalled.

On April 16th, Justice Doty heard the complaints of Marshall and 73 other players who filed objections to the new collective bargaining agreement. Attorney Jerry Goldman argued that the franchise tag was a "fundamental injustice" to a player like Marshall who could negotiate a large salary on the open market. "This is the same thing as being an indentured servant," he claimed. Other non-franchise players, including Rypien, objected to the CBA because they weren't given adequate time to understand the new rules and adapt to the new marketplace. Redskins tight end Terry Orr expressed his concerns in football terms: "We knew what the play was, now you audible." Jim Quinn, arguing for the Players Association, countered that less than two percent of players filed complaints and that salaries among free agents increased 140 percent in just weeks under the new system. "Has anyone from the NFL or the players association gotten notice from the president's office as a thank you for jumpstarting the economy?" Doty joked to Quinn, an indication that the judge sympathized with the newly re-certified Players Association.

Doty announced that he would finalize his decision in late April, then delayed for a few more days while negotiators fine-turned some of the language of the CBA. On April 30th, he gave final approval to the agreement, franchise tag and all, issuing a 115-page decision that called the CBA "fair, reasonable, and adequate." He called the objections of Marshall and the other franchise players "extremely limited in scope" and indicated that overall market conditions favored them. Marshall and his lawyers immediately planned an appeal. Meanwhile, the Redskins resumed trade talks with the Oilers, who tellingly didn't select a linebacker in that weekend's draft despite a glaring need at the position.

Phone Tag

The Oilers upped their offer for Marshall to a first- and a fifth-round pick. Redskins GM Charley Casserly gave the Oilers permission to formally negotiate with Marshall, who threatened to holdout for an entire season rather than play for the Redskins. On May 6th, Marshall met with Oilers brass for six hours to hammer out a contract.

But while the Oilers and Marshall were talking, the league and the NFLPA were tweaking the CBA in anticipation of Marshall's appeal. The "franchise tag" was redefined: a team could sign away another team's nonexclusive rights franchise player for the price to two first-round draft picks, while the soon-to-be-called exclusive rights franchise player would receive the average of the top five salaries at his position calculated at the end of the signing period, not the end of the previous season.

The change in language made a big difference at a time when free agency itself was causing salaries to soar, and it softened the blow of the franchise tag somewhat. The price for retaining exclusive rights for Marshall rose from $1.6 million to about $2.17 million, and the Redskins (and other teams) were given until June 15th to up their offers or allow their franchise players to speak with other teams.

The Redskins were eager to get a decision done before they were forced to increase their offer to Marshall. Casserly gave the Oilers a May 21st deadline to sign Marshall or he would void the trade. When May 21st arrived, the Oilers and Marshall were $150,000 apart. Casserly gave the Oilers another day, but they could not close the gap between $2.75 and $2.9 million for one year. The so-called deadline came and went, but Casserly did not object to the fact that the Oilers kept their offer on the table. In fact, the Oilers issued their own deadline: sign by June 3rd or they rescind their contract and trade offers. "I don't understand what constructive purpose it serves," agent Richard Bennett said of the second deadline.

The evening of June 2nd arrived, and everything came unglued. Oilers owner Bud Adams decided that Marshall wasn't worth the money, draft picks, and hassle. The Oilers called the Redskins and voided the trade. Marshall's agent called the Oilers and accepted the $2.75-million contract. At about the same time. Uh-oh.

The late-evening events of June 2nd were among the strangest in the history of professional sports contracts. According to the Oilers, they called the Redskins at 9:40 p.m. CDT to void the trade offer. At 10:05 p.m., they called Bennett and withdrew the contract offer. At 11:40 p.m., a fax from Bennett accepting the contract terms arrived at Oilers offices. The Oilers had long-distance phone records to back up their timeline. Bennett countered that his fax was the binding document that ratified the trade. "It's not really very complicated," Bennett said the next day. "Last evening, Wilber directed me to accept their offer. I did so by fax to the Oilers' offices. Those two acts constitute a contract. It's irrefutable. It's contract law 101.''

The Redskins immediately filed an appeal with Tagliabue insisting that the Oilers uphold the terms of the deal. A war of words erupted. Bennett and the Redskins accused the Oilers of trying to leverage additional picks out of the deal, and Bennett promptly filed a $7.9-million breech-of-contract suit on Marshall's behalf. Tagliabue waited until late June to hear all sides of the argument.

In the course of 10 hours of meetings with the commissioner on June 30th, all of the dirty laundry of June 2nd got an airing out: after Oilers executive Steve Underwood called Casserly at 9:40 p.m., Casserly called Bennett to warn him that the deal was about to fall apart. Bennett didn't trust Casserly's information (he thought it was a negotiation tactic), but Casserly offered to have the Redskins pay the $150,000 difference if Marshall accepted the Oilers offer. Bennett then faxed his acceptance at about the same time that Underwood called him to withdraw the offer. Casserly's interference and financial offer were deemed "improper" by Tagliabue, who rebuked the Redskins sharply in his decision. Casserly and the Redskins paid dearly for invoking the commisioner's wrath: instead of a first- and fifth-round draft choice, they would receive a third-round pick in 1994 and a fifth-rounder in 1995.

The Redskins fumed about the decision. "This is a problem with him," an unnamed team official said of Tagliabue in the Washington Post "He wants everyone to be equal in this league. He's tired of the way we dominate the NFC East and is going to do anything possible to hurt us." But Marshall seemed happy to end what became a four-month contract squabble. "I'm not bitter," he said. "You'll have to ask the Redskins why they did what they did. But I know this is going to be exciting. It's something different. It has been tough the last few months, but this is a career move. It's a business move. The Redskins had an opportunity to keep me here and decided not to do it. I don't know exactly the reason."

Marshall was appeased. The franchise tag, in a slightly modified form, survived its first challenges. Labor peace was achieved.

Disenfranchised

Marshall played just one forgettable season with the Oilers. Knee and ankle injuries slowed him at the start of the year, and the Oilers started the season just 1-4 despite a star-studded roster. "Linebacker Wilber Marshall was just what the Houston Oilers needed: another money-motivated, impact individualist whose 30th birthday had already come and gone," a Washington Times columnist wrote in good-riddance tones in late October. The Oilers rebounded to win 11 straight games, but Marshall recorded just 37 tackles and two sacks in 10 games. He followed Buddy Ryan to Arizona in 1994, but he was playing out the string, and he was out of the league after the 1995 season.

The Redskins, a 9-7 in 1992, dropped to 4-12 under the inept Petitbon. The team signed Carl Banks as a cheaper alternative to Marshall, but Banks was past his prime and lasted just one season. The team never managed to acquire White, Martin, or the other top free agents they targeted, and several of the in-house players they signed for the 1993 season, including Rypien and Monk, were gone by 1994.

The franchise tag, of course, is still with us, as is the resentment that still festers almost 17 years after Marshall and others stood in a Minneapolis courtroom and challenged the designation. A tagged linebacker will earn over $7 million in 2007, an impressive figure. But superstars who are slapped with the tag still feel the same way Marshall did when he was told in 1993 that he was off the market. Somewhere, a deep-pocketed team is offering more money, or a longer deal, or a better bonus, and the player's contract with his current team has run its course. Far from "fair, reasonable, and adequate," the franchise tag prevents a player from earning his full market value. Ironically, it leaves him disenfranchised, unable to determine his future and determine his own career path, at least for one year.

Over the last few days, big-name players like Lance Briggs, Asante Samuel, and Dwight Freeney have been franchised. Over the next few weeks, these players will grumble over million-dollar deals, haggle over long-term contracts, threaten holdouts, or lobby for trades. It's easy to forget how all of this started: as a mad scramble in the winter and spring of 1993 to comprehend and interpret new rules, a threatened peace, and a last-second change to the most sweeping bargaining agreement in sports history. It's also easy to forget the harsh realities of 1980s football economics: strikes, replacement games, Plan B free agency, and endless lawsuits. A good compromise is one that satisfies no one, but when players, fans, and owners consider the alternatives, the franchise tag doesn't seem so bad.

And no matter how controversial or contentious contract talks become in the next few months, we probably won't see any deals that come down to a midnight fax, a clandestine phone call, or Solomon-like intervention by the commissioner. The franchise tag may be hated, but it's now established, and no new Marshall appears poised to challenge the establishment anytime soon.

Posted by: Mike Tanier on 19 Feb 2007

52 comments, Last at 17 Jul 2007, 10:02am by Mark Corsino

Comments

1
by Crushinator (not verified) :: Tue, 02/20/2007 - 12:39am

Well done. I don't read a lot of the Too Deep Zones, but this one kept me glued to it. Really interesting stuff.

2
by Dirty Stanchez (not verified) :: Tue, 02/20/2007 - 12:47am

FIRST!!!!!!!!! OH YEAH BABY.

A great article and another question answered of where did that come from.

3
by Dirty Stanchez (not verified) :: Tue, 02/20/2007 - 12:48am

Oh crap, shouldnt have gone to get that coke zero!

4
by Yet another Pat (not verified) :: Tue, 02/20/2007 - 12:52am

For someone who wasn't able to really understand football at the time of the salery cap's introduction due to age, this article was really informative and I loved hearing about the chaos that's led to the situation we have now in football with the salery cap.
(now to nitpick) Ironically, one of them was Wilber Marshall, who was lured away from the Bears with a five-year, $6-million deal in 1998.
I can only assume it should be 1988. Either way, amazing article as it is now encouraging me to look for other stuff about the cap's introduction.

5
by throughthelookingglass (not verified) :: Tue, 02/20/2007 - 2:20am

The moral of the story?

Don't sign a 31 year old coming off of a career year to a big contract.

6
by VarlosZ (not verified) :: Tue, 02/20/2007 - 2:34am

Question: how do you research an article like this? LexisNexis?

7
by Carlos (not verified) :: Tue, 02/20/2007 - 2:41am

Wilber Marshall was a heck of LB. And this was a heck of an article. Great job!

8
by Bobman (not verified) :: Tue, 02/20/2007 - 3:19am

Another

Fine

TDZ.

Kudos.

9
by Israel (not verified) :: Tue, 02/20/2007 - 6:52am

Very nicely presented.

It seems to me more than a bit unfair that a team can tag a player more than once.

10
by langsty (not verified) :: Tue, 02/20/2007 - 9:53am

mike tanier you are awesome

11
by JasonK (not verified) :: Tue, 02/20/2007 - 10:37am

I'm guessing that the year at the end of paragraph #3 should be 1988, not 1998.

12
by Pat (not verified) :: Tue, 02/20/2007 - 10:56am

#9: It's not exactly a big deal. It gets prohibitively expensive to tag someone repeatedly. By the third tag, the salary jumps to the QB tag value (or even higher if the person in question is a QB). At that point, you're talking about an absolutely ludicrous salary for three years that no one would really complain about.

Even a two year franchise tag for the lowest positions (K/P) would be $4.4M in guaranteed salary. It's really not that bad.

The 'fully guaranteed' part is a pretty big deal, considering the average salaries that it was based off of weren't guaranteed.

13
by Boo (not verified) :: Tue, 02/20/2007 - 12:00pm

What I find funny is how angry the players get over it all today. Take Asante Samuel. He's tagged at one year 7.5 mill or so. The idea is that they will negotiate a long-term deal. . . Even if they don't they'll tag him next year with a 20% raise. . . Year 1 franchise tag - 7.5 Year 2 franchise tag - 9 total - 16.5 million Imagine the deal he would sign on the market. 13 mill signing bonus + near league minimum salaries for cap purposes. . . And a lot of roster bonuses he might not see. . . Year One - 13 mill bonus + 1.5 million base. Year Two - 1.5 million base Total value 16.5 million. And if he's not a good fit for his new team, or if he's injured ,or the money goes to his head, he'll be cut and maybe never sign another big deal. . .

It's basically a push for the player. Unless a critical injury happens in year 1. The only person who loses is the agent.

14
by James, London (not verified) :: Tue, 02/20/2007 - 12:07pm

For someone who didn't follow the NFL until 5 years or so ago, this is terrifc stuff.

I like TDZ.

15
by MJK (not verified) :: Tue, 02/20/2007 - 1:54pm

The only person who loses is the agent.

Who is exactly the person who is advising the player as to what is best for him. I wonder if that's part of the reason why so many players are so bitter about it.

Agents are kind of like realtors. They act like they have the best interest of their clients at heart, but they really have only "good" (not necessarily best) interest of their clients, while they prioritize their own best interests.

16
by Scott de B. (not verified) :: Tue, 02/20/2007 - 2:50pm

Far from “fair, reasonable, and adequate,� the franchise tag prevents a player from earning his full market value.

I'm not sure the two are necessarily contradictory.

17
by Igor (not verified) :: Tue, 02/20/2007 - 3:10pm

Just a question. When a player signs a multi year deal worth an 10 million bonus and 50 million over 7 years, does the agent get his cut from the guaranteed money or from the 50 million that the player himself will never see?

18
by MDZ (not verified) :: Tue, 02/20/2007 - 3:48pm

#17
It's my understanding that agents take their percentage out of a players paycheck, and only get paid based on money the players make. There would have been a huge uproar from some player if the agents took a percentage of the maximum of a deal when a player gets cut early for salary cap reasons.

19
by Crushinator (not verified) :: Tue, 02/20/2007 - 5:30pm

Well, the problem with the Franchise tag isn't the money that comes with it. Yes, the player gets tagged, but they want that long term deal because they're at the height of their value. If Asante Samuel has an injury-ridden season next year, or does poorly, or is perceived to just be worse, the Pats will have cost him some money.

As an example, look at Michael Vick. After his one good season, he signed a huge extension, on what was essentially an abberation.

20
by Mike T (not verified) :: Tue, 02/20/2007 - 5:40pm

6: I research these historic pieces thru LexisNexus and Newslibrary, with some help from sources in my own library and just hitting Google and checking 6000 sites. Some papers (Washington Post, New York Times) have great archives, which makes it easier to research an old Giant, Jet, or Redskin.

21
by Pat (not verified) :: Tue, 02/20/2007 - 7:00pm

#19: The only way it's a lot of money is if it's a serious, career-ending injury. The franchise tag is high enough that it's nearly comparable to the signing bonus they would've get - which is the only money they're guaranteed anyway.

Even if he's worse next year - he'll get a signing bonus in free agency, and that signing bonus, plus this year's tag, is still going to be roughly equal to what he would've gotten this year.

It's really just the injury risk.

22
by Jerry (not verified) :: Tue, 02/20/2007 - 8:01pm

IIRC, when the franchise designation was created, a team that signed a tagged player to a long-term contract couldn't then designate another player for the life of that contract. I wonder why the union let that provision go.

23
by Carlos (not verified) :: Tue, 02/20/2007 - 8:27pm

What I find funny is how angry the players get over it all today... It’s basically a push for the player.

Are you an economist by chance? Because the only reason it's a "push" is that you assumed it was. You did so in the face of pretty compelling evidence to the contrary: namely if it were a push, then teams wouldn't use the franchise tag!

Why is it a big deal? Well, last time I checked, the overwhelming majority of us are free to negotiate market compensation for ourselves... why should it be any different for a football player.

The Franchise Tag is a classic principle-agent problem where the players' assocations sold out the interests of a handful of players, albeit almost certainly for the benefit of the overwhelming majority of players.

24
by mb (not verified) :: Tue, 02/20/2007 - 8:31pm

another great article, mr. tanier.

25
by Pat (not verified) :: Tue, 02/20/2007 - 8:45pm

namely if it were a push, then teams wouldn’t use the franchise tag!

It's a push for the player. It's an advantage for the team.

The player's goal is to get money. The team's goal is to keep the player. It's a push for the player because they get basically equal money in free agency or franchised. It's an advantage for the team because they keep the player.

26
by Carlos (not verified) :: Tue, 02/20/2007 - 8:57pm

It’s a push for the player because they get basically equal money in free agency or franchised

Care to try and prove this point?

27
by Jason Mulgrew aka The Mul Dawg aka Lord J Rocka (not verified) :: Tue, 02/20/2007 - 9:08pm

re: 2
LMAO! You were not the first!

28
by Pat (not verified) :: Tue, 02/20/2007 - 9:13pm

John Abraham was franchised for $8.3M for one year. He signed a contract with the Falcons with a signing bonus for $12.5M and a contract length of 6 years. He could've signed the most piddling 5-year contract in the world in the second year and still gotten roughly the same amount of money over the same 2 year period. That $8.3M in 1 year is more money than he earns on average over the length of the contract.

Like I said: money-wise, it's basically a push. They could drop off horribly and they'd still make roughly the same amount. It's just the single-season additional injury risk.

29
by Pat (not verified) :: Tue, 02/20/2007 - 9:27pm

Or, for a better example: Corey Simon had a $5.13M franchise tag placed on him. He held out, and the Eagles rescinded it. The Colts offered him a 5-year, $30M contract - but with only a $5M signing bonus. In the first year, Simon made $5.54M under the contract signed in free agency, with $5M guaranteed. Again - virtually no difference.

30
by DoubleB (not verified) :: Tue, 02/20/2007 - 9:43pm

It might be a MONETARY push for the player, but I wouldn't call it an OVERALL push. The player doesn't get a choice as to what organization or coaching staff he plays for, the location in which he does much of his work, or the opportunity he has to play on a winner. The high dollar amounts might mitigate that, but it doesn't eliminate it.

31
by Carlos (not verified) :: Tue, 02/20/2007 - 10:14pm

Like I said: money-wise, it’s basically a push.

Huh? First of all, Abraham's a lousy example, since he was tagged and therefore the Falcons had to trade a #1 to get him. That obviously indicates that the contract he signed does not demonstrate his open market value, which would be the contract value plus the value of a #1 pick, which is certainly far, far more than $8.3M.

Second, he got a $12.5M signing bonus, but fully $18M of his contract is guaranteed. And in his first two years he gets $2M base each season, plus the $12.5, plus a $1M bonus in 06 plus a $2M bonus in 07, so that's $19.5M in the first two years, which is a hell of a lot more than $8.3M in one year.

Third, the real basis of comparison should be his open market value. Cf, Andre Carter, a lousy DE who got a $30M contract including a $10M guarantee in the open market. If Carter can get a $10M guarantee in the open market, and Abraham can get $18M guaranteed when his rights cost a #1 pick, just imagine what Abraham's open market value was!!

That ain't no kind of push from anyone's perspective.

32
by Kuato (not verified) :: Tue, 02/20/2007 - 11:16pm

19.5 Mil in Two Years (long term deal)
8.5 Mil (Year One Fran) + 10 Mil (year two Fran)

One Million Difference Over two years - and the player is now allowed to sign a long term deal with another nice signing bonus in year 3 instead of playing out the string of his 5 year front loaded deal.

I have to agree with Pat, in terms of pure money it is basically a push, but the long-term deal is a more forgiving to a player who has a bad injury (or just sucks) in the first year of the contract.

Although this structure could be blown out of the water for one season as the money teams have under the cap is a little ridiculous this year. Even teams in a lot of Cap Trouble have 5-7 million to spend. Could get interesting.

33
by Carlos (not verified) :: Tue, 02/20/2007 - 11:46pm

If you equate $8.3 guaranteed to $18M guaranteed, then there's not much I can say to you, other than you'd make a great case study for Daniel Kahneman.

Besides, Kuato, you miss the point completely that you aren't looking at his Fair Market Value, which was the entire point of my comment -- franchised players are rightly pissed b/c the union sold them out. You're arguing that it's $8.3M vs. $18M, when in reality it's those two values vs. HIS OPEN MARKET VALUE, which the only available evidence is = $18M PLUS the value of a first round pick. Call that conservatively another $10M, and now you see that the tradeoff is $8.3M guaranteed vs. $28M guaranteed.

So how's that a push again?

34
by Pat (not verified) :: Wed, 02/21/2007 - 12:41am

Second, he got a $12.5M signing bonus, but fully $18M of his contract is guaranteed.

That doesn't really matter. It's just the first year that matters. The later years he would've gotten in free agency the next year - or, heck, if they franchise him again, he would've been making a whole lot more than $18M guaranteed.

The later year guarantees just mean that on the open market, they don't think the multiyear injury risk is large enough to be a real concern, nor the possibility that he'd decline. If a team thinks that, then one injury, or even a decline, won't lower his future value enough that he wouldn't've gotten that anyway.

So how’s that a push again?

You're ignoring the value he'd get on the open market the next year. Both Abraham and Simon had larger fully guaranteed portions, but they were delayed until later years, when they would've been a free agent had they signed the tender. Signing, and playing, for the franchise tender wouldn't've cost them much at all.

Carlos: Simon's really the best case for your argument, because he did hit the one thing that the franchise tag is bad regarding - he had an injury which cost him his second year. That's what the franchise tag sticks them with - one year serious injury risk. For anyone who doesn't get seriously injured, they'd almost always make out better playing under the tag than not.

35
by Tim Gerheim :: Wed, 02/21/2007 - 12:44am

The tagged players are rightly pissed because their freedom is curtailed, whether they make the same amount of money they would have made on the free market. But the Players Association (and to a lesser extent the League) rightly doesn't get worked up about their complaints because the franchise tag is one element of a vast, multifaceted contract, the collective bargaining agreement. Those players are part of a union, and collective bargaining agreements often work to trade one union member's marginal benefit for greater benefits for the vast majority of the union's members. That's precisely what the CBA is intended to do. While the union fights for the rights of all the players under the CBA, they don't shed a tear when the richest ones don't make as much as they would if there were no union, no CBA, and an unrestrained free market.

36
by Bobman (not verified) :: Wed, 02/21/2007 - 2:38am

While you are all looking at the money, there are other things to consider: success on the field and chemistry. Player A is desired by his own team, and my guess is that's because he works well in their system. He has success. If not, why the hell would they want him? Think A Samuel, D Freeney, Edge James. What happens if, like Edge he goes away a year after being franchised (BTW, James made about $7M as a franchisee PLUS his signing bonus the next year with AZ--that's an additional $7M guaranteed, at the expense of his total freedom, as opposed to what he'd have gotten if they let him go one year earlier (basically what AZ paid). So he got that "extra' $7M to play in a system that fit his skill set exactly and might have gotten him a SB ring. Now that he's been in Az one season, ask him which team he'd rather play for, Indy or AZ. And where on a sliding value scale scale he'd place Indy and AZ related to the salaries he'd play for in each place.

So Freeney is railing against the tag, but what if a 3-4 D grabbed him to be an OLB and he failed at it? WOuld he be happier or better off? Or what if he landed on a team with giant run stuffers so dominant that every single run aginst the new team went to him, making him a highly paid doormat. Would he wake up some mornings wishing he were back in Indy? I say yes. He fits perfectly there and hopefuly realizes it. It's fine to rail against the cap in theory, but in practice, it's not as detrimental to a player as it might seem at first.

If you just sell your services to the highest bidder, which is your right, you take what is there. If you land in the toilet (anybody playing for Dan Snyder) good for you, enjoy your money and a squandered career. If a player were to find the best match--team-wise, he may well realize that there's no place like home. And if home is offering $7M for one year, guaranteed, he's really getting a pretty good deal. (Plus there's usually the chance of efforts to hammer out a long term deal and the tag is just a way of holding an option. It DOES limit flexibility or freedom for the player, but sometimes that freedom is the freedom to make a bad team choice.) I know it sounds paternalistic and I know I never grew up poor or hungry and many of these guys did, so I may be missing a big psychological factor. But in terms of success on field, I bet a lot of guys are better off with their current teams than a new one.

There are also tons of guys, like a #2 DE or LB or RB whould would benefit from a move--but I imagine it's pretty rare for a team to franchise them (M Turner in SD, for example).

37
by Carlos (not verified) :: Wed, 02/21/2007 - 2:55am

You’re ignoring the value he’d get on the open market the next year. Both Abraham and Simon had larger fully guaranteed portions,

I'm not ignoring anything, but you are completely ignoring that Abraham has never been in the open market. And thus your analysis fails.

38
by Carlos (not verified) :: Wed, 02/21/2007 - 3:04am

collective bargaining agreements often work to trade one union member’s marginal benefit for greater benefits for the vast majority of the union’s members.

Yes and no. Unions often trade off one members benefits for another, but whether that accomplishes "greater benefit" is questionable.

If the NFLPA were stronger, they'd have won (1) unrestricted FA after some service years, like their peers in the NBA and MLB have, and (2) fully guaranteed contracts, again like their peers. But the NFLPA is relatively weak, and so all players in the end get underpaid vs. the value they create. The owners fully understand that the best players make the market, and so those are the players who are restricted. And the entire market is shifted down.

Heck, just look at the 2007 payrolls. The majority of teams will have "cap space." For players, that's money that they've earned but isn't getting paid. Why? B/c too many FAs have been franchised.

the union ... don’t shed a tear when the richest ones don’t make as much as they would if there were ... an unrestrained free market.

While the union may not, it's perfectly understandable for the top players to feel miffed. And while the CBA may be a net positive from the fan's perspective (maintaining competitive balance unlike baseball and avoiding albatross contracts unlike the NBA), since I at least make an effort to avoid being an obvious hypocrite, I have sympathy for those players. I wouldn't want to be subject to getting franchised by my employer if I were a superstar, and you know what, I wouldn't be. Why should begrudge Dwight Freeney or John Abraham to same opportunities just because they're getting paid a lot more than I am?

39
by Pat (not verified) :: Wed, 02/21/2007 - 11:40am

I’m not ignoring anything, but you are completely ignoring that Abraham has never been in the open market. And thus your analysis fails.

Abraham was on the open market. His agent was given permission to seek a trade, and that is the open market. He had to reach a contract agreement with the Falcons before they would trade him. If he didn't agree with it, the trade wouldn't've gone through. He was negotiating with Denver before as well, but they weren't interested because of his contract demands, and also the Seahawks too.

The fact that Abraham was under the franchise tag at that point is pretty irrelevant: Atlanta had to give something up to get him, mitigating their opinion of how much he was worth, but he always had the option of playing under the franchise tag, which means that if they didn't offer him much more than $8M guaranteed, he would've ignored it. So it's pretty much a wash.

I wouldn’t want to be subject to getting franchised by my employer if I were a superstar, and you know what, I wouldn’t be.

I dunno. Recording contracts seem a lot worse.

40
by Carlos (not verified) :: Wed, 02/21/2007 - 1:18pm

Abraham was on the open market. His agent was given permission to seek a trade, and that is the open market. He had to reach a contract agreement with the Falcons before they would trade him.

He wasn't an unrestricted FA. His was not an open market transaction. The Falcons had to trade a #1 for him.

His Fair Market Value was $18M guaranteed PLUS the value of a #1 pick. Like I said, call that conservatively $10M and his Fair Market Value was $28M... of which he captured only 64% with the Jets getting the remaining 36% of the value.

Recording contracts? Yeah, the whole music industry is screwy, from the contracts to ticketmasters effective monopoly. But technology looks to breaking to the "artists" advantage, despite the Labels claim that technology would hurt them. Cf the Mia Rose phenomenon on YouTube.

41
by Pat (not verified) :: Wed, 02/21/2007 - 2:04pm

He wasn’t an unrestricted FA. His was not an open market transaction. The Falcons had to trade a #1 for him.

$10M for a first round pick as "conservative"? At best, a first round pick is about $4-5M (cost benefit of a low first round draft pick - $2M/year - over an equal-skill FA - $4-5M/year - over 2 years), but that's ignoring the risk you're taking with a top pick. Considering the risk (say, conservatively, 30%) is typically around $5-6M as well (cost excess over a low-skill FA $0.5-$1M - over 5 years), the pick is worth maybe $2-3M.

I could easily argue that the negotiating advantage Abraham had in already having an $8.33M, one year offer on the table was easily $2-3M.

If the franchise tag is so bad, who's really getting screwed? The only one I can think of is Corey Simon (if he had signed it, and been known to have a problem before free agency). Everyone else I can think of (Darren Howard, Edgerrin James, Shaun Alexander, Adam Vinatieri) all made out like freaking bandits. Shaun Alexander effectively got $22M guaranteed for a 9-year contract on a 28 year old RB in 2005 (2 likely years), when Tomlinson got $21M guaranteed for an 8 year contract as a 25 year old RB in 2004 (5 likely years). James effectively got $19.5M guaranteed for a 5-year contract for a 27 year old RB in 2005 (3 likely years).

42
by cjfarls (not verified) :: Wed, 02/21/2007 - 3:44pm

Re:38

Are teams really leaving money floating under the 2007 cap? (i.e. are players really getting jipped out of money they've earned?)

As has come out repeatedly in other threads, every team spends to the cap pretty much every year. Open amounts at the end of the year are always used up in contract restructuring, bonuses, etc. Now, 2007 could be the exception due to the late, big raise in the cap... but I kinda doubt it.

And for the 3rd perspective on the franchise tag that no one has mentioned: What about the fans? Frankly, a single "franchise" player I think is important to the team's relationship to the fans. They give teams and the players time to work out a long-term deal to keep the "face" of a team around, or at least for a year or 2 more. It allows a core of stability, with lots of freedom around the edges for players to benefit.

With this additional benefit, I think the CBA including salary cap, franchise tag and all is good for the game, including the players. Do some individuals lose? maybe. But only because the stability & popularilty of the system as a whole enables them to make the millions in first place.

Whoa to the NFLPA if it ever gets so "strong" that it is able to kill the golden goose and make all these disgruntled franchisees happy... Superstars are great and all, but I for one got tired of watching the NBA once the players "got what they deserevd". I think most fans prefer teams over players.

43
by MJK (not verified) :: Wed, 02/21/2007 - 4:21pm

If the NFLPA were stronger, they’d have won (1) unrestricted FA after some service years, like their peers in the NBA and MLB have, and (2) fully guaranteed contracts, again like their peers.

Pleas stop propegating this myth. There is absolutely nothing in the CBA that prohibits players from negotiating fully gauranteed contracts, and nothing that prohibits owners from offering them. While I'm not all that familiar with baseball's or basketball's contract rules, I'd be surprised if there was anything that mandated gauranteed contracts there.

Most NFL contracts are not gauranteed not because there is some rule in the CBA trying to keep players down, but because that is what the market will bear. The injury risk in the NFL is so high that owners rightly view a guaranteed contract as far more risky for them than a non-gauranteed one, and risk has cost. Conversely for the player, lack of risk has value.

A player and his agent are perfectly free to negotiate only for gauranteed contracts. For example, the Pats a few years back negotiated fully gauranteed contracts with Troy Brown and (I think) Tedy Bruschi (have to double check on Bruschi). However, if they do so, then they're probably looking at either a much shorter term deal, or much lower gauranteed salaries and signing bonuses. In the Pats cases, I think Brown was gauranteed $1M+ per year for a 2 year deal or something, and Bruschi ~2.5M for a 3 year deal. Players correctly realize that by taking the risk that they will not get injured, and negotiating non-gauranteed contracts, they will probably make a lot more money. So they do take the risk.

44
by Carlos (not verified) :: Wed, 02/21/2007 - 4:58pm

cjfarls - I already acknowledged that the CBA might be great from the fan perspective, but this discussion was promtped by a complaint about a player's complaint.

MJK - Nice strawman! There's no "myth" in asserting the two most obvious ways in which the NFL union has created a worse market for their members than their peer unions have.

45
by Wanker79 (not verified) :: Wed, 02/21/2007 - 5:27pm

Re: 44

You claimed that the reason NFL players don't have guaranteed contracts is because their union is weak. MJK pointed out that there is nothing in the CBA that prohibits players from negotiating guaranteed contracts, and therefore has nothing to do with the strength of the union. How exactly is that a strawman??

46
by Bobman (not verified) :: Wed, 02/21/2007 - 6:19pm

Pat, agreed with #41. Those numbers you use at the end, they are just the new team deals, right? Meaning that in a 13-month span, the position players got an additional $5-$7M from the previous year's franchise tag, right?

While it's true the long-term/bigger-money contracts are not guaranteed when the tag is applied (an injury in the tag year could end a career), those guys all made out very well. $29M for Shaun, $26M for Edge, etc.

47
by Pat (not verified) :: Wed, 02/21/2007 - 7:09pm

#46: No, it's combined already. God, if there was another $5-7M it would've been highway robbery. Seriously, giving roughly the same guaranteed money to RBs 2-3 years older is, um, overpaying.

I highly doubt that Alexander, James, etc. are complaining now about being tagged. They would've made less money.

48
by Subrata Sircar (not verified) :: Wed, 02/21/2007 - 8:20pm

In 43, MJK writes:
I’m not all that familiar with baseball’s or basketball’s contract rules, I’d be surprised if there was anything that mandated gauranteed contracts there.

Baseball mandates fully guaranteed contracts as part of its collective bargaining agreement. Basketball contracts are "mostly" guaranteed (they have complex bonus and if-traded clauses to handle the same salary-cap issues that face the NFL, and are voidable only in limited, highly-specific circumstances).

For example, consider the Aaron Boone situation from a few years ago; he blew out his knee playing basketball, and the Yankees were considering whether or not to void his contract. The media/legal conclusion was that they might be able to do so, but it wouldn't be worth the legal hassle as the union would (with precedent and CBA language on its side) fight tooth and nail to prevent injured players from being fired.

Also consider the Jay Williams situation in basketball; he suffered a horrific motorcycle accident in 2003. Since riding a motorcycle was specifically prohibited in his contract, the Bulls could have voided it, but chose not to do so (both because they didn't want to just cut him loose without insurance, and because they didn't want to antagonize the players), instead buying him out for about $3M. If he had been in a car accident, they wouldn't have had any recourse.

As far as the franchise tag goes, it's specifically designed to allow teams to hold onto their best-valued player for one year at a modest raise. That is only rarely in the player's best interest, so of course they complain. They might make the same money, but they might not ... and they have to play another year without getting a long-term deal, risking injury that would prevent that.

BTW, as far as competitive balance goes, I wouldn't say that baseball's behind the NFL in any real way. Don't forget, almost half the NFL makes the playoffs, and I seem to recall quite a lot of kvetching over the sad state of the NFC this year. 12/32 is bigger than 8/30, so of course more teams are competitive; the system's rigged to reach deeper into the talent pool.

Oh, and of course: Good article. I appreciate the historical context these kinds of articles bring to my understanding of football.

49
by Pat (not verified) :: Thu, 02/22/2007 - 2:49am

#48: BTW, as far as competitive balance goes, I wouldn’t say that baseball’s behind the NFL in any real way.

I don't want to turn this into baseball vs football, but let's just say, simply, it's really really hard to determine what relative "competitive balance" is, especially because the two sports are fundamentally different. Baseball naturally produces teams that are more "competitive" (i.e. close to 0.500) each year because of the way the sport works.

The only main difference between baseball and football in terms of long term winning percentage is that there's a striking correlation between franchise value in baseball and expected excess winning percentage, and there isn't one in football. Whether it's causative is another question.

50
by Jim A (not verified) :: Sun, 02/25/2007 - 12:39am

Excellent article. I think it's also worth mentioning that Wilber Marshall was also one of only three free agents to switch teams during 1977-1988 era when he signed with the Redskins in 1988. This was prior to the Plan B period but after the original Rozelle rule was overturned in the Mackey lawsuit. As I recall, the compensation awarded to the Bears was two first-round draft picks.

51
by Sid (not verified) :: Sun, 02/25/2007 - 3:54pm

RE: 22

That rule still exists. Teams have until a certain date to negotiate a long-term contract with the player. If they sign the player long-term after that date, they do lose the tag for the life of the contract.

52
by Mark Corsino (not verified) :: Tue, 07/17/2007 - 10:02am

Even though the deadline has come and gone, if Asante Samuel is traded, does still get to sign a long term deal withthe new tram or must he play for the franchise tag amount this season?