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The 5 O'Clock Club: What happens if the NFL changes to fully guaranteed contracts?

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It’s 5 o’clock somewhere...

The 5 o’clock club aims to provide a forum for reader-driven discussion at a time of day when there isn’t much NFL news being published. Feel free to introduce topics that interest you in the comments below.

So, if you read the sports pages, you are aware of the annual hubbub — that seems to be louder than usual this year -- about NFL contracts, and how they don’t stack up to the big-dollar guaranteed salaries of other sports, most notably the NBA.

At least one national sports journalist thinks that NFL teams should start writing fully guaranteed contracts.

Me? I think that most people (including players... maybe especially players) don’t have any idea what would happen if the NFL adopted fully guaranteed contracts as the norm, or the rule. Hey... it works in the NBA, it’ll work in the NFL, right?

Personally, I don’t think it’s that simple.

For the past couple of weeks, I’ve been thinking about writing an article to explain what I think the consequences would be. Well, thank goodness for my procrastination...errr... patience. Jason Fitzgerald, from OverTheCap, recently published a well-written article on this very topic. While he doesn’t discuss every point that I would have included, and he brings up some issues that I hadn’t thought about before, all in all, his article is a very good proxy for what I might’ve written -- especially since it means I don’t have to do a damned thing except copy & paste.

The major issue at play is the basic lifecycle of the NFL player. For even the best players at most positions the cycle is pretty similar- development year or two on a rookie contract, peak in years 3-5, begin noticeable decline in year 7, keep fighting for a job until no teams want you anymore.

The way current contracts are primarily negotiated is that teams pay a large premium on the frontend of a contract in hopes of receiving a benefit on the backend of the contract if the player breaks out from the cycle mentioned above and is still playing at a really high level in year 8 and 9.

For example look at the Patriots contract with Stephon Gilmore. The Patriots are paying him $32 million in the first two years of his contract and guaranteed him $40 million across three years with the hope to gain a benefit on the backend of salaries of $11 and $12 million at a time when cornerbacks will likely be earning $17-18 million a year. If Gilmore flops terribly the Patriots will have overpaid him by millions but at least be free in years 4 and 5. If he does well they have a great deal.

Once you move to a fully guaranteed structure teams are going to adjust accordingly. Once you remove the benefit of the backend teams aren’t going to pay as much up front because there won’t be a year four or five in the contract. As they absorb more risk they are going to be less likely to inflate the front end of the contract. The contract will only go as far as the current guaranteed deal likely goes (the exception being the QB position).

Right now we can look at Gilmore as being paid about 7.9% of the projected cap in the first three years of the deal for the possible benefit of paying him just 5.7% of the cap at the end of the contract. Remove the benefit and the team is going to cut the first three year’s salary from $42 million to $36 or $37 million to limit their risk and eliminate years 4 and 5.

How much would a team pay on a 5 year contract in that situation? Well we knew the Patriots were willing to take on an effective $42 million of risk to invoke those final two year options so at least $42 million. But beyond that they will probably use the cost of a replacement level talent which for that position is in the ballpark of $3 million a season. So lets call it a five year contract worth $48 million.

What is better for the player? $42 million guaranteed with the potential to earn $65 million over 5 years or a straight five year contract with $48 million fully guaranteed at signing? Or is the player better off taking the $36 million over three years with the potential of free agency awaiting?

Jason goes on to list an entire 22-man offensive & defensive roster of notable players who currently are not under contract in the NFL, who would be under contract today if the last contract they had signed had been fully guaranteed. You might want to click through to the article to see a sobering list of players who would be collecting paychecks today, had their last contract been fully guaranteed. It makes for some scary reading.

At the top of the list is Ryan Fitzpatrick, who — under a fully guaranteed contract system — would still be getting paid on the contract he signed with the Bills.

Two other names that will be very familiar to Redskins fans are Jason Hatcher (Redskins) and Dashon Goldson (Buccaneers), both of whom would be collecting checks this season.

I don’t know about you, but these players are already fading into the distant haze of my memory. The very idea that they would be getting paid today under a hypothetical guaranteed contract system is off-putting.

I’m guessing we can all agree that these three players don’t really belong in the NFL right now. If NFL clubs had to fully guarantee every dollar of every contract, the structure of contracts around the league would be much different to avoid having to pay players beyond their ‘use by’ dates; most likely, players would get shorter contracts, for less money per season. They would have to sign a series of these short contracts (1 to 3 years), and there might well be a lot more movement of players between teams.

This might not be a bad thing... but I don’t think it’s necessarily what journalists, fans and players expect when they talk about fully guaranteed contracts in the NFL. Things might be better for players, or things might be worse — but things will not be the same.

As Jason Fitzgerald pointed out in his article, under a fully guaranteed salary structure, a player like Stephon Gilmore would have faced perhaps 3 likely contract options in his last negotiation, based on extrapolations from his current contract:

  • His current contract of 5 yrs/$65m - $31m guaranteed at signing / $40 total guarantee
  • fully guaranteed 5 yr/$48m
  • fully guaranteed 3 yr/$36m

What would NOT have happened is this: Gilmore would NOT going have gotten a fully guaranteed 5yr/$65m deal.

The NFL is not the NBA, no matter how much NFL players want it to be.

But then there’s this, from Richard Sherman:

“If we want to get anything done, players have to be willing to strike,” Sherman said at Wednesday night’s ESPYs in L.A., via Deadspin.com. “That’s the thing that guys need to 100 percent realize. You’re going to have to miss games, you’re going to have to lose some money if you’re willing to make the point, because that’s how MLB and NBA got it done.”

Unfortunately for the NFLPA, NFL players don’t have a history of success when it comes to strikes, for many of the same reasons why they don’t get guaranteed contracts: their careers are short, and players feel like they need to maximize game checks. This also keeps the NFLPA relatively weak, as their membership is very young, and turns over rapidly. Most players can’t really afford to think of winning benefits for the next generation of players.

So what do you think?

  • Do you agree with the many players, journalists and fans who feel that guaranteed contracts are the fair and equitable path forward for the NFL?
  • Are you inclined to think the way I do... to believe that players, journalists and fans don’t understand the consequences of guaranteed contracts... that NFL players will not be better off with this change, but would — in fact -- be taking a huge risk that may hurt players or the league?
  • Or do you have some other, perhaps more nuanced, opinion on the matter?

Poll

What do you think about guaranteed contracts in the NFL?

This poll is closed

  • 13%
    It may take some time, but guaranteed contracts are inevitable, and good for the game
    (14 votes)
  • 14%
    Guaranteed contracts are inevitable, but bad for the game
    (15 votes)
  • 21%
    Guaranteed contracts are the right idea, but the players will never win this fight with the NFL owners
    (23 votes)
  • 29%
    Fortunately, guaranteed contracts will never come to pass in the NFL
    (31 votes)
  • 20%
    It doesn’t really matter... with the pressure coming from concussions & CTE, 20 years from now the NFL won’t exist anyway
    (22 votes)
105 votes total Vote Now