Explain to me NFL trade economics

[Jaguar]

You're right that the successful picks from beyond the top 10 are always way, way, way underpaid. I think that's acceptable, and probably a good thing. It rewards teams that make steals in the draft, and doesn't force them to pay for non-premium college players.

However, the objections are usually leveled at the premium college players. If that list above shows anything, it shows that players with a "proven" NFL track record are just as capable (or even more capable) of failure.

Is it really that outrageous that Amobi Okoye got a 15 million dollar contract in the same year that Corey Redding got a 50 million dollar one? Okoye is a smart guy, a three-year starter, and a hard worker; Redding has been cut twice. Is it really that outrageous that Brian Orakpo got a 25 million dollar contract to Albert Haynesworth's 125 million? Even the guys at the bottom of the top ten are paid too little, if anything.

Maybe it's just the top few picks, then, that bother people. I'm sorry, but it's absurd to fuss over the fact that Brandon Lloyd didn't get paid as much as Calvin Johnson when they got their contracts four years ago. Apparently some people think that a handful of mediocre years on the 49ers makes you a "proven" player, while being the best college receiver since 1996 is meaningless.

Only one of those two receivers had proven himself to be worthy of a monster contract, and that was Calvin Johnson. If Brandon Lloyd wanted to be paid like Calvin Johnson, he should have ****ing played like Calvin Johnson.

[flash9286]

New question to answer. Why do teams continually renegotiate contracts (e.g. Andre Johnson)? Don't they have all the leverage? Would owners be better off with guaranteed contracts?

[snoopy369]

Teams renegotiate contracts either to extend them or to move around money from one year to another. For example, if AJ's contract was
$5MM,$7MM,$9MM,$11MM,$13MM
(not actually possible as the first few years increase more than allowed, but that idea)
in the fifth year he'd be a $13MM cap hit, plus the signing bonus prorated. So $16 or $17MM cap hit.

In that fifth year, then, or even in the fourth, you have an incentive to offer him a new deal: 4 years for whatever, with a signing bonus covering part of his $13MM. Say, 4 years, $36MM, including $20MM signing bonus. So you have
$2MM, $3.4MM, $4.6MM, $6MM
plus $5MM bonus each year. That means he's only a $7MM + $3MM (the old bonus) this year, or $10MM hit, instead of $17MM.

Alternately, you could do it for the opposite reason - if you have a ton of cap space, you could renegotiate the contract so that this year's hit is much higher, and then in later years it's lower (say, set this year to have a bunch of bonus money that is probably going to be hit but still doesn't hit the no salary decrease rule, or just take the cap hit for the previous signing bonus all this year).

There are a lot of games people play like that, and there is a reason most teams employ at least one full time cap management specialist whose sole job is figuring out how to keep the team in the most favorable salary cap position...

[snoopy369]

Ah, I hadn't seen the latest AJ drama. I think in those situations it's just that a team does have an incentive to have happier players, and if their demands are not unreasonable then why not give them the extension they'd get anyway? I wouldn't be surprised if AJ didn't make some concessions to help their cap situation in any event.

[Jaguar]

A player in the nearing the last year of his deal, provided that he's good, has massive leverage. Almost as much as a free agent.

Why? Because he can just say "**** you, I'll play for one more year, and then I'm going somewhere else."

[flash9286]

That is understandable. But AJ had 5 years left on his contract. Chris Johnson's contract was to 2013.

[snoopy369]

Sure, but they're also the most valuable players on their teams. Not only would their team play much worse without them, but fans would stop coming.

Look at Vince et al in San Diego. He's not getting a deal, partly because SD owners are a bunch of hard-nosed folks who won't renegotiate as a matter of principle, but also because he lost the support of fans when he got in trouble with the law, and because he's not nearly as important as AJ or CJ are to their teams. Hence, no new deal.

Fans leave in droves when they feel their favorite player is being screwed by their team.

[Al B. Sure!]

Fans leave in droves when they feel their favorite player is being screwed by their team.

Unless his name is Donovan McNabb

[flash9286]

Professional sports has to be the only situation in which people believe a contracting party should be able to disregard a contract because they have "outperformed the contract." Also, heard Woody Johnson appealed to the parol evidence rule .

[Al B. Sure!]

Flash, you have to consider something though...

Take Chris Johnson's situation. Here you have a late 1st rounder that was drafted on a team that had, at the time, two 2nd round young prospects at runningback in LenDale White and Chris Henry (hey they both at the time were thought to be pretty good backs). His bargaining position was so poor that he had to accept what the Titans were giving him, as does pretty much every player drafted after the first half of the 1st round... Chris Johnson couldn't be like, "I'm capable of rushing for 2000 yards within the next two years. Trust me, guys. Pay me the big bucks."

So after rushing for 2000 yards, we come to the situation where he's making only $550K and is one of the lowest paid starting RB's in the league.

Now, you might say, well he can suck it up because it's his contract and he can hit paydirt when he reaches free agency but what if he breaks his leg? Anything can happen and his career could be over on any given Sunday and for all his talent and all he did for the Titans, he would never have been properly compensated.

Suppose he didn't like the Titans' offer. What is he to do? He can't sign with another team until a year later when he can reapply for the draft. He can't go back to school because he signed an agent before getting drafted.

So when it comes to rookie signings, there's a clear asymmetry in the bargaining positions of the teams and the players.

Also, teams reneg on contracts all the time. I mean, what are 'cuts'?

[snoopy369]

Salaries aren't guaranteed in the NFL, Al.

[Al B. Sure!]

Salaries aren't guaranteed in the NFL, Al.

What does that have to do with the intrinsically unfair bargaining position of rookies who weren't taken in the first half of the first round?

[flash9286]

Flash, you have to consider something though...

Take Chris Johnson's situation. Here you have a late 1st rounder that was drafted on a team that had, at the time, two 2nd round young prospects at runningback in LenDale White and Chris Henry (hey they both at the time were thought to be pretty good backs). His bargaining position was so poor that he had to accept what the Titans were giving him, as does pretty much every player drafted after the first half of the 1st round... Chris Johnson couldn't be like, "I'm capable of rushing for 2000 yards within the next two years. Trust me, guys. Pay me the big bucks."

So after rushing for 2000 yards, we come to the situation where he's making only $550K and is one of the lowest paid starting RB's in the league.

Now, you might say, well he can suck it up because it's his contract and he can hit paydirt when he reaches free agency but what if he breaks his leg? Anything can happen and his career could be over on any given Sunday and for all his talent and all he did for the Titans, he would never have been properly compensated.

Suppose he didn't like the Titans' offer. What is he to do? He can't sign with another team until a year later when he can reapply for the draft. He can't go back to school because he signed an agent before getting drafted.

So when it comes to rookie signings, there's a clear asymmetry in the bargaining positions of the teams and the players.

I'll give you that there is some unequal bargaining power because of way the draft works. But that is really more a player union issue. Presumably, the player union got something in return for screwing the rookies. There could different rules that gives the rookies more bargaining power. The rookies benefit if they stay around long enough to became veterans. And I'm not exactly sure of the rules, but if CJ really thought he was really going to be that good couldn't he have signed a shorter term deal? (I can't remember off the top of my head if rookies have a floor on how long their rookie K last).

Also, teams reneg on contracts all the time. I mean, what are 'cuts'?

Teams don't reneg, it is written into the contracts that they have the right to cut the players and not give them any non-guaranteed money. That is why the thing that really matters is guaranteed money. I'm tired of hearing how NFL Ks aren't guaranteed. Guaranteeing NFL Ks wouldn't change anything, NFL Ks are effectively guaranteed through signing bonuses already.