Packers save on Harris

This week’s release of longtime Packer Al Harris illustrates a couple interesting money issues.

As a vested veteran, Harris would normally be entitled to termination pay – the balance of his salary – upon release by the Packers. However, since Harris started the season on the Physically Unable to Perform (PUP) list, he is not entitled to termination pay and the remaining balance of his $2.5 million salary ($1.18 million). Thus, the Packers, who acquired Harris in 2003 from the Eagles, have no further financial obligation to Harris.

Harris received his weekly paycheck of $147,000 (1/17th of his $2.5 million 2010 salary) from the Packers through the first nine weeks of the season. However, since he was never active for a game, he did not receive any of the $62,500 per game 45-man active roster bonuses (up to a maximum of $1 million for all 16 games). In his deal for the rest of the season with the Dolphins, Harris will earn about that same $147,000 amount per week should he now earn similar 45-man active roster bonuses on top of his salary.

I first inserted 45-man active roster bonuses in 2006 in deals with Ahman Green and Charles Woodson, both coming off seasons curtailed by injury. The Packers and many other teams now use the structure in all veteran contracts. It also is a way of dealing with players grumbling about new contracts, providing easily earned incentive money as long as the player was active and a compromise between tearing up their contracts and giving them new ones  – as they wished – and doing nothing.

The one unanticipated problem with these clauses was at the end of the season when we had clinched playoff berths and coach Mike McCarthy – unaware of these clauses – decided to rest some starters who were otherwise healthy. Players and their agents were rumbling about those roster bonuses and we had to renegotiate a couple deals to make these players whole.

First-round treasure to trash

Harris, after clearing waivers, signed with the Dolphins, who created a roster spot by cutting ties with 2006 first-round draft pick Jason Allen. In a chain reaction, Allen was then claimed by the Texans, who had made an aggressive push to sign Harris before he agreed with the Dolphins. 

An interesting clause in Allen’s first-round rookie contract protected the Dolphins from paying the guarantee if they released Allen due to a recurrence of hip injuries he had while in college at Tennessee. This clause certainly met resistance from his agent, as Allen did not sign until two weeks into his rookie training camp. As it turned out, Allen’s hip is not the reason for his release, rather the upgrade in Harris.

Pennington: expensive insurance policy

Speaking of interesting clauses in Dolphin contracts, the promotion of 34-year old Chad Pennington to starting quarterback will cost the team $3.25 million. Pennington’s contract has an escalator clause taking his salary from $2.5 million to $5.75 million in the event he takes over the starting quarterback position from Chad Henne, which he will do Sunday.

Pennington’s contract had another interesting clause, although now moot. On his one-year deal, were he traded from the Dolphins prior to the October 20 deadline, he would have received a “trade bonus” of $1.515 million.

With the two clauses above, Pennington could have earned an additional $4.765 million were he made the starter and traded prior to October 20. The Dolphins truly wanted Pennington to stay and may not have had full confidence in Henne.

With the release of Allen and the ascension of Pennington, it certainly can be said that – unlike other teams hoarding money this season-- that the Dolphins are willing to spend to improve the team mid-season.

And in a couple other notes:

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