Rookie contract offset language silliness

[Guiness]

There are a couple of stories at PFT about first round players who are not signed, and the opinion is that it is because of offset language. The stories are about the 'phins and Eagles, but I assume the other 9 of the top 10 are unsigned because of this.

http://profootballtalk.nbcsports.com/2013/07/10/lane-johnson-doesnt-want-to-hold-out-doesnt-want-offset-language/
http://profootballtalk.nbcsports.com/2013/06/05/dolphins-insistence-on-offset-language-is-expected-to-spread/#comment-2645788

I think this is silliness. The rookie contracts are in control, this feels like nickel and diming them to me. How likely is it to pay off, and even if it does, how likely is it to be significant? Not many first rounders get cut before the end of their rookie contract, and if they do it’s because they’re a washout. Is anyone going to sign them for less than the minimum?

I see the point to 'you shouldn't get paid twice'. The problem is that there is no give (from the team) that I can see to go along with this take. I'm genuinely curious if there is something a team can offer in exchange for allowing offset language.

The contracts are so strongly slotted, the rookies will sign for the same amount whether or not they have offset language. Given the choice between $4M with no offset, or $4M with offset, that's not really a negotiation, more of a demand.

Some of the people replying have this theory that a player will purposely tank in order to get extra money or play for the team he wants to...get real.

[Patler]

There are a couple of stories at PFT about first round players who are not signed, and the opinion is that it is because of offset language. The stories are about the 'phins and Eagles, but I assume the other 9 of the top 10 are unsigned because of this.

http://profootballtalk.nbcsports.com/2013/07/10/lane-johnson-doesnt-want-to-hold-out-doesnt-want-offset-language/
http://profootballtalk.nbcsports.com/2013/06/05/dolphins-insistence-on-offset-language-is-expected-to-spread/#comment-2645788

I think this is silliness. The rookie contracts are in control, this feels like nickel and diming them to me. How likely is it to pay off, and even if it does, how likely is it to be significant? Not many first rounders get cut before the end of their rookie contract, and if they do it’s because they’re a washout. Is anyone going to sign them for less than the minimum?

I see the point to 'you shouldn't get paid twice'. The problem is that there is no give (from the team) that I can see to go along with this take. I'm genuinely curious if there is something a team can offer in exchange for allowing offset language.

The contracts are so strongly slotted, the rookies will sign for the same amount whether or not they have offset language. Given the choice between $4M with no offset, or $4M with offset, that's not really a negotiation, more of a demand.

Some of the people replying have this theory that a player will purposely tank in order to get extra money or play for the team he wants to...get real.

On the other hand, the minimum salary for a 4th year player in 2016 is likely to be about $800k, so it is not an insignificant amount, either.

I wonder if this is important to the teams because with the shorter, smaller contracts, they anticipate making more decisions on players' futures after three seasons, even if they are contracted for four.

[Guiness]

On the other hand, the minimum salary for a 4th year player in 2016 is likely to be about $800k, so it is not an insignificant amount, either.

I wonder if this is important to the teams because with the shorter, smaller contracts, they anticipate making more decisions on players' futures after three seasons, even if they are contracted for four.

Everything is relative...yes, $800K is significant, but it's peanuts compared to what a top 10 first round rookie made just a short time ago. I'm torn, I can't call the reason the teams are doing it greed, because that money is part of the cap, and if they don't spend it on the rookie, they have to spend it elsewhere, and teams that take care of the cap are more successful. But it feels like with the slotting, there's nothing to fight over, so they are making something up to fight over! Do you want to risk a holdout over this? As I said, it appears to me that the teams have nothing to offer in exchange for accepting this language.

[Patler]

Everything is relative...yes, $800K is significant, but it's peanuts compared to what a top 10 first round rookie made just a short time ago. I'm torn, I can't call the reason the teams are doing it greed, because that money is part of the cap, and if they don't spend it on the rookie, they have to spend it elsewhere, and teams that take care of the cap are more successful. But it feels like with the slotting, there's nothing to fight over, so they are making something up to fight over! Do you want to risk a holdout over this? As I said, it appears to me that the teams have nothing to offer in exchange for accepting this language.

I don't see why a player should be allowed to double dip. He is guaranteed a certain amount. Why should he get more for being cut?

I suspect the teams would like the offset to be a standard clause in all contracts. Could even come up if a player gets in legal trouble, or causes a problem on one team so is released, but another team is willing to give him a try.

I don't know if it still is the case or not, but a few years back offsets were allowed for veterans who were released with guaranteed contracts and subsequently signed with another team.

[pbmax]

I don't see why a player should be allowed to double dip. He is guaranteed a certain amount. Why should he get more for being cut?

I suspect the teams would like the offset to be a standard clause in all contracts. Could even come up if a player gets in legal trouble, or causes a problem on one team so is released, but another team is willing to give him a try.

I don't know if it still is the case or not, but a few years back offsets were allowed for veterans who were released with guaranteed contracts and subsequently signed with another team.

Teams might like the offset language to be standard, but they can't even get their front office employees and coaches to agree to it 100% of the time.

If I were either a player or coach, I would want the leverage the no-offset language gives me as much as I would want the money.

[Cheesehead Craig]

For those of us unfamiliar with the term "offset language", here's helpful definition:

"Offset language is a contract term which states that if a team releases a player (per a number of potential reasons, including poor performance), the unpaid money they guaranteed him in the contract is offset by money he will potentially receive from another team when they pick him up. An offset language clause is something that teams optimistically want included in a contract for any player, but especially for rookies who have yet to show their true NFL potential (or lack thereof).

To explain in more detail, under a standard contract, since the salary is fully guaranteed for the duration of the contract term, even if a player is not performing at the expected level and is released by the team, the player will still get paid their original guaranteed salary. Additionally, with an absence of offset language in the contract, if a new team picks up the player upon release, the old team will still have to honor the player’s guaranteed salary. This leads to a “double dipping” of sorts, because the player will now receive his original guaranteed salary in addition to the salary offered by the new team.

For example, assume a team guarantees a rookie $40 million over three years and they pay the player $30 million of it before the player is released and subsequently picked up by another team who offers the player $50 million over the next 3 years (including a year of the original contract). With the absence of offset language in the contract, the rookie could potentially make $90 million over a five year span. However, with offset language present, the rookie would receive $80 million, $50 million from the new team and $30 million ($40 million – $10 million offset) from the old team."

Got it from HERE (http://rulingsports.com/2012/07/18/why-do-8-top-rookie-nfl-prospects-still-not-have-signed-contracts/)

[MadScientist]

Teams might like the offset language to be standard, but they can't even get their front office employees and coaches to agree to it 100% of the time.

If I were either a player or coach, I would want the leverage the no-offset language gives me as much as I would want the money.
The other thing is that a cut player will most likely not get much from a new team, so basically with the offset they are working for free. Some sort of compromise should be worked out with a partial offset.

[MadScientist]

For example, assume a team guarantees a rookie $40 million over three years and they pay the player $30 million of it before the player is released and subsequently picked up by another team who offers the player $50 million over the next 3 years (including a year of the original contract). With the absence of offset language in the contract, the rookie could potentially make $90 million over a five year span. However, with offset language present, the rookie would receive $80 million, $50 million from the new team and $30 million ($40 million – $10 million offset) from the old team."

Seriously, does anyone see this as a scenario that would ever happen? Who releases a guy with $10M guaranteed left that would be worth 3/50 to another team? Players released will almost certainly sign for less than the amount they have guaranteed coming to them.

[Patler]

Teams might like the offset language to be standard, but they can't even get their front office employees and coaches to agree to it 100% of the time.

If I were either a player or coach, I would want the leverage the no-offset language gives me as much as I would want the money.

Sure, but that is exactly why the teams are pushing for it. The more common it becomes, the more likely they can get it included as a standard provision in a subsequent CBA.

[pbmax]

Sure, but that is exactly why the teams are pushing for it. The more common it becomes, the more likely they can get it included as a standard provision in a subsequent CBA.

I agree, but agents have already set precedents over width swaths of picks this year. I think most of the 20s got offset language excluded. Its obviously a bigger issue up top, but like large guaranteed money near the top of the draft, I expect the offset language to trickle up into other picks each year. Not the reverse.

[Guiness]

Seriously, does anyone see this as a scenario that would ever happen? Who releases a guy with $10M guaranteed left that would be worth 3/50 to another team? Players released will almost certainly sign for less than the amount they have guaranteed coming to them.

Yup, that was my point. A player who washes out with the team that drafted him is most likely going to sign a 1yr minimum contract. I also like the way they bandy around the word 'guaranteed' in there. As we've seen over the past couple years, there are a lot of definitions NFL teams use when saying 'guaranteed'! I know it's an extreme case, but Hernandez had a fully guaranteed contract...that NE has already said they are not paying out.

Patler, I agree that players should not be able to double dip, but I also don't like that teams can weasel out of guaranteed contracts.

but: the word that tells the reader they can ignore everything before it!

These are supposed to be negotiations, there has to be some give and take. I've been reflecting on it, and I actually came up with one carrot the teams can offer: players get their (singing bonus) money right away instead of a month or so later. If they don't sign, the teams can wait until a day or two before TC starts.

[Patler]

Seriously, does anyone see this as a scenario that would ever happen? Who releases a guy with $10M guaranteed left that would be worth 3/50 to another team? Players released will almost certainly sign for less than the amount they have guaranteed coming to them.

The example is far-fetched, but the concept is valid. Aaron Maybin lasted only two years in Buffalo after signing a five year contract as the 11th pick in the first round. He was subsequently signed by the Jets.

[Patler]

Patler, I agree that players should not be able to double dip, but I also don't like that teams can weasel out of guaranteed contracts.

How is it weaseling out? The player still gets everything he was guaranteed, just from a different checkbook.

Isn't the offset amount dollar for dollar that he gets from a second team?
If he has $2 million remaining on his guarantee, is released, and signs a minimum contract for $800,000, the first team offsets $800,000 and pays him $1.2M, right? He still gets his $2M.

[Guiness]

The example is far-fetched, but the concept is valid. Aaron Maybin lasted only two years in Buffalo after signing a five year contract as the 11th pick in the first round. He was subsequently signed by the Jets.

Most of the discussion has surrounded top 10 picks, but Maybin is a good one.

I was trying to come up with examples, and the only ones I could find that were cut and resigned were Leaf and Derrick Harvey(?). Jamaal Anderson maybe? He was released by the Falcons and signed by the Colts a month later, I assume he had time left on his contract. Probably no guaranteed money though.

[Guiness]

How is it weaseling out? The player still gets everything he was guaranteed, just from a different checkbook.

Isn't the offset amount dollar for dollar that he gets from a second team?
If he has $2 million remaining on his guarantee, is released, and signs a minimum contract for $800,000, the first team offsets $800,000 and pays him $1.2M, right? He still gets his $2M.

I was talking about the team that signed him to the original contract...they're avoiding paying him part of a fully guaranteed contract because of, IMO, weasel language.

I'm dealing with the CRA (our equivalent of the IRS) and I know weasel language when I see it! I am being taxed on tax money I collect for the gubernment. Figure that one out!

[Guiness]

The example is far-fetched, but the concept is valid. Aaron Maybin lasted only two years in Buffalo after signing a five year contract as the 11th pick in the first round. He was subsequently signed by the Jets.

That example if pure PR. Why didn't they use your much more realistic and understandable example of $2.0M, $1.2M and $800K? Because you might actually feel for that guy, but no one is upset if a guy gets paid $80M instead of $90M.

It's even more unrealistic when you consider that with the new rookie wage scale, even the #1 pick gets nowhere near the $40M over three years they describe! Cam Newton got 4yr/22M, under 8M/yr while the example is for 13M/yr lol