Extension: To Sign Or Not

As mentioned in this space on Wednesday, this is a key week for contract extensions for NFL Players.  Monday is the deadline for teams to allocate salary and non-prorated bonus into the 2008 Cap year.  In other words, after Monday teams can still negotiate contract extensions through the end of the season but the bonus money in those extensions will necessarily prorate over the life of the contract rather than be contained this year.

With the average team having 7M of Cap room available for the latter half of the season and virtually no players on the street of any value requiring the use of Cap funds, this Cap room is either going to be used by the clubs on existing players for extensions to their current contracts or not used at all.  In that case, the clubs will look to “roll over” Cap room into the Adjusted 2009 Team Cap, giving it more cushion next year.  The rollover is achieved through various “phony incentives”; for example, giving a third-string quarterback a 5M bonus for 10 touchdown passes in the team’s final game.  At the Packers, we used these bonuses with Craig Nall a couple different times, with Craig and I laughing about me coming down to yank him out of the game if he threw a couple touchdown passes in meaningless games.

Regarding extensions, Eagles cornerback Lito Sheppard had some interesting comments this week about the difficulties teams and players face with extending players early in their contracts.  The player is signing the deal for security and to eliminate the risk of future injury or downturn in performance prior to his free agent year.  A player that continues to ascend in performance will then watch the marketplace pass him by, as it has for so many players who signed long-term deals prior to the last couple of years when the Cap went up significantly.

Sheppard stated the following regarding his advice to teammates who may be approached to sign extensions, to the Philadelphia Inquirer: “It's a dirty game and it's almost like they're forcing you to take the new deal when you come to the table. I don't necessarily feel like that happened to me. But after my [rookie] contract was up in my fifth year [2006], I was coming off my second Pro Bowl and that's when Nate Clements signed that $80 million deal [for eight years, with San Francisco]. I would have been in his boat. That was exactly during my time when I was a free agent. That was the dramatic change from when I took my deal into what it would have been.”

Sheppard made the choice that many players will have to make this weekend.  Do they take the security of a new deal and eliminate the injury risk?  Or do they roll the dice towards a potentially much bigger payday either at the footsteps of or in free agency?  Sheppard obviously feels he made the wrong choice.  That is hard to live with, especially with the whisper crew – other agents, friends, teammates, etc, -- telling him he is underpaid.

Teams address these perceived or real inequities in player contracts in differing ways.  Some ignore the whining and continue without change, some rip up contracts and reward the player who is making noise, and some look for a middle ground, as we tried to with the Packers to create a solution all sides can live with.

One thing is certain:  these situations are never easy for either side.  Ask Lito and the Eagles.

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