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Agent’s Take: Has the NFL been colluding against fully guaranteed contracts? Or is it just an illusion?

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The Athletic’s Kalyn Kahler reported last week that NFL general counsel Jeff Pash wrote in an Oct. 20 memo to club owners, presidents, general managers and attorneys that the NFLPA filed a grievance alleging that teams and the league colluded to forestall fully guaranteed contracts from being offered to players. The idea for the NFLPA’s claim is “the incontrovertible fact that no other quarterback or high-profile player has signed a completely guaranteed contract after Browns‘ quarterback Deshaun Watson signed his contract last March.”

The NFLPA contends that fully guaranteed contracts would change into the norm for the NFL’s top players due to the Watson deal. The memo alleges that prior to, during and after an Aug. 9 ownership meeting by which the owners met to approve the Denver Broncos sale, there have been discussions amongst owners, league and teams executives about agreeing to not sign veteran players to lucrative fully guaranteed contracts.

Pash added that the NFLPA is not in search of to terminate the collective bargaining agreement if the claims are proven. As a substitute, the NFLPA has asked the arbitrator to award damages and permit “certain quarterbacks” adversely affected to terminate their contracts. 

No person expected Watson to get a completely guaranteed five-year, $230 million contract in connection along with his trade from the Texans to the Browns, especially considering the various sexual assault and misconduct allegations he was facing. Watson just finished serving an 11-game suspension for violating the league’s Personal Conduct Policy. He had 4 years price $136 million remaining on the four-year contract extension averaging $39 million per yr he signed in September 2020 before signing the Browns contract.

The Browns “pulled a rabbit out of hat” with the assistance of the brand new contract. Watson had narrowed the teams he was willing to waive his no-trade clause for all the way down to the Falcons and Saints. The Browns had missed the cut prior to a latest contract entering the equation. 

Watson had unique circumstances where multiple teams were recruiting him to waive his no-trade clause. In a way, Watson was more like a free agent than the standard contract-extension candidate where there is a closed negotiation only with the player’s team. Essentially, David Mulugheta, Watson’s agent, was in a position to leverage Cleveland’s desperation to get his client into the sort of contract that is routine for NBA superstars.

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The “certain quarterbacks” probably means two signals-callers who signed lucrative contracts after the Watson deal: Kyler Murray and Russell Wilson, in addition to Lamar Jackson, who’s playing under a $23.016 million fifth-year option. 

Raiders quarterback Derek Carr signed a three-year extension averaging nearly $40.5 million per yr lower than a month after the Watson deal. Carr clearly wasn’t all in favour of pursuing a completely guaranteed contract. His deal only had $24.9 million fully guaranteed at signing with $65.3 million in overall guarantees. The guarantees in Carr’s current deal are lower than within the five-year extension he signed in 2017 that made him the NFL’s first $25 million-per-year player. The 2017 extension had $40 million fully guaranteed at signing and $70.2 million in total guarantees.

Carr acknowledged that he structured his latest deal in a way that will make it easier to maintain other core players around. Wide receiver Hunter Renfrow and tight end Darren Waller subsequently signed extensions.

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A probable major impediment to Murray getting a completely guaranteed contract was the NFL’s funding rules. The brand new collective bargaining agreement ratified in 2020 modified the NFL’s archaic funding requirements, which necessitated teams putting into an escrow account the quantity of any guarantees in a contract apart from those only for injury, including ones in future contract years. The present rules are as follows:

The NFL may require that by a prescribed date certain, each Club must deposit right into a segregated account the current value, calculated using the Discount Rate, less $15,000,000 (the “Deductible”), of deferred and guaranteed compensation owed by that Club with respect to Club funding of Player Contracts involving deferred or guaranteed compensation; provided, nevertheless, that with respect to guaranteed contracts, the quantity of unpaid compensation for past or future services to be included within the funding calculation shall not exceed seventy-five (75%) percent of the overall amount of the contract compensation. The current value of any future years’ salary payable to a player pursuant to an injury guarantee provision in his NFL Player Contract(s), shall not be considered owed by a Club under this Section until after the Club has acknowledged that the player’s injury qualifies him to receive the long run payments. The $15,000,000 Deductible referenced in the primary sentence of this Section 9 shall apply to the 2020-28 League Years only. This Deductible shall increase to $17,000,000 for the 2029-30 League Years.

The funding issue is most problematic for NFL teams with the poorest owners (amongst a gaggle of the super wealthy). Under the funding rules, the Browns will likely be required to place $169 million in escrow by March 31, 2023 due to Watson’s contract. In hindsight, the NFLPA probably must have made the elimination of the funding requirements more of priority in collective bargaining since owner solvency will not be a legitimate concern prefer it was when the principles were instituted.

The Cardinals aren’t considered a money wealthy team. The signing bonus in Murray’s rookie contract when he was 2019’s first-overall pick wasn’t paid in a lump like 2019 second-overall pick Nick Bosa got from the 49ers. $6,839,924 of Murray’s $23,589,924 signing bonus was deferred until March 1, 2020.

Murray signed a five-year, $230.5 million extension price as much as $238 million through salary escalators within the latter days of July when training camp began. There’s $160 million in overall guarantees where $103.3 million was fully guaranteed at signing. A further $29.5 million in latter years of Murray’s contract, which is not guaranteed for injury at signing, may change into completely secure to bring the overall amount that might be guaranteed to $189.5 million.

Murray’s contract originally contained an unprecedented clause requiring 4 hours of independent film study during each week of the regular season to forestall his guarantees from voiding. The controversial clause was faraway from Murray’s contract a number of days later due to the distraction it was causing. The insistence on such clause would appear to suggest that the Cardinals were adamantly against giving Murray a completely guaranteed contract.

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The conditions gave the impression to be favorable for Wilson to follow in Watson’s footsteps with a completely guaranteed contract. Wilson, who had two years left on his contract price $51 million, must have had considerable negotiating leverage due to his acquisition cost. The Broncos gave the Seahawks multiple players (tight end Noah Fant, defensive lineman Shelby Harris and quarterback Drew Lock), 2022 and 2023 first-round picks, 2022 and 2023 second-round picks and a 2022 fifth-round pick for Wilson and 2022 fourth-round pick. 

The NFL’s funding rules weren’t a problem for the brand new Broncos ownership group led by Walmart heir Rob Walton. He is well the NFL’s richest owner. Walton has an estimated net price of $63.2 billion, which makes him the seventeenth richest person on this planet, in accordance with Forbes.

Wilson signed a five-year, $245 million extension shortly before the beginning of the regular season. His deal comprises $165 million in guarantees with $124 million fully guaranteed at signing, which is the second most ever in an NFL contract.

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Any likelihood Jackson, who represents himself, needed to get a completely guaranteed contract this yr went out the window after Murray’s and Wilson’s deals. The Ravens and Jackson ended contracts talks right before the regular season began in accordance along with his self-imposed deadline for a latest deal.

It was reported that Jackson wants his deal fully guaranteed. Jackson reportedly turned down a five-year offer price $250 million with $133 million fully guaranteed. The offer had the second highest average yearly salary and money fully guaranteed ever in an NFL contract.

Ravens owner Steve Bisciotti was critical of Watson’s deal shortly after he signed in the course of the NFL owners meetings at the top of March. “I wish they hadn’t guaranteed the entire contract,” Bisciotti said. “I do not know that he should’ve been the primary guy to get a full guaranteed contract. To me, that is something that is groundbreaking, and it will make negotiations harder with others.” He also added, “However it doesn’t necessarily mean that we’ve to play that game, you recognize? We will see.”

Negotiations are expected to resume in January after the regular season ends. Jackson is destined to begin playing the franchise tag game if each parties remain firmly entrenched of their positions on a completely guaranteed contract. The exclusive franchise designation will likely be almost certainly. 4 of the last five times quarterbacks have been designated as franchise players the exclusive tag has been used. Jackson could be prohibited from soliciting a proposal sheet from other teams with the exclusive version.

The 2023 exclusive quarterback franchise number will likely be the common of the top-five 2023 quarterback salaries (salary cap numbers with some minor adjustments) at the top of next yr’s restricted free agent signing period on April 21. It currently projects to $45.248 million. This number is subject to vary depending on latest quarterback deals, contract restructures, pay cuts and/or releases between every now and then. 

Collusion is difficult to prove. The NFLPA might be going to wish some form of “smoking gun” to prevail of their claim and get the specified relief. Obtaining electronic communications (texts and/or emails) of NFL owners and/or team executives discussing not doing fully guaranteed contracts, in the event that they exist, would surely qualify. It will be interesting to see whether the initial contract proposals Murray and Wilson’s agents made to the Cardinals and Broncos were for fully guaranteed contracts.

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