Just Say No to Guaranteed Contracts
One interesting item that has repeatedly come up in the past week is the possibility of a new NFL labor deal including guaranteed contracts.
Currently, NFL player contracts are not guaranteed. So, if a player isn’t performing up to his expected level, the team can cut him, void his contract and not have to pay him another dime.
If the NFL institutes guaranteed contracts, any team who signs a player to a contract cannot cut that player at a later date and void the remainder of his contract. If, say, the Green Bay Packers sign Player A to a five-year, $50 million contract and player A tears up his knee in year two and never returns to his previous form, the Packers would still be on the hook for the final three years of his contract, whether Player A played another down for them or not.
It’s the same system used in Major League Baseball and the NBA.
It’s the reason the Milwaukee Brewers had to pay Bill Hall $6.8 million in 2009 to warm the bench, before the team designated him for assignment and traded him to the Seattle Mariners. It’s the same reason the Brewers sent a large chunk of cash to Seattle in that deal – to cover the final year of Hall’s contract, which is worth $8.4 million. Bill Hall is making out like a bandit even though he was playing so badly the Brewers essentially were ready to cut him.
It’s also the reason the Milwaukee Bucks are stuck paying Michael Redd, who has an average salary of $15 million per season and a player option for 2011, even though Redd has played only 51 games over the past two seasons.
It’s obvious why NFL players want guaranteed contracts. Their peers in the NBA and MLB have them. Plus, they play the most violent game and have the greatest chance of suffering a significant injury of anyone in major pro sports. NFL players want to make sure they’re taken care of and for good reason.
But guaranteed contracts are bad for the game. The owners, I’m sure, agree.
Can you imagine the Packers paying four or five guys who either have suffered career-ending injuries or just haven’t lived up to expectations? If those guys make big money, the system makes it increasingly tough for owners to turn a profit, considering they’re paying not only the guys who aren’t earning their money, but their replacements. It changes the main focus of building a team from being competitive to watching the bottom line.
Look at the Bucks and how hamstrung they are with Redd’s contract. It’s impossible for them to make a run at any big-ticket free agents. It’s tough for them to re-sign their own players — the team didn’t even consider matching the contract tendered to restricted free agent Ramon Sessions prior to this season because doing so would have put them over the luxury tax threshold. And still, the Bucks hold onto Redd and his mammoth deal simply because they have to.
The current NFL system allows general managers to shape their teams with the best players they can acquire. It’s the basis of having a competitive league and what makes the NFL great.
Guaranteed contracts are great for the players, but they’re a terrible move for the owners, and they’re even worse for the fans, who are forced to watch a watered-down product where guys who make $20 million a season get the best seat in the house — the one on the end of the bench.
Monty McMahon is one of the founders of Total Packers. He is probably the most famous graduate of UW-Oshkosh next to Jim Gantner.