The Standoff Begins!
I’ve been asked many times, “When do contract negotiations start up for draft picks?” The answer is that a majority of teams will wait as long as possible to get things done. Why? A few common reasons: Hold on to your money longer and earn interest, keep your draft picks hungry and out of trouble by not lining their pockets with big summer cash, and see how the market shapes ups for certain rounds. Keep some cap salary powder dry for as long as you can.
The public has been brainwashed to believe that all rookie holdouts are driven by the player/agent side. The majority of times, they’re initiated by the agent, but many teams are guilty of not even starting the negotiating process until a few weeks, or even days, before camp. I’ve had many draft picks wait until 10 days prior to camp before their team was even willing to start the process. It’s usually kicked off by the team’s capologist giving me a cap number that he feels is equitable for that particular slot. That’s it. I then compare that number to last year’s and previous years’ cap numbers, the increase in the cap, the team’s rookie pool allocation and the number of draft picks they have. Usually the number is a little low but surprisingly close. Every now and then, it’s right on. For picks in the second round and lower, it’s fairly simple to formulate a contract from the cap number for the slot.
I’ve always tried to get my deals done as early as possible, but I usually get resistance from most teams for some of the reasons I listed above. The majority of agents are insecure about doing early deals as well because they’re afraid a slot below them may come in with a better deal. So everybody waits until the market forms, but few are willing to form the market. I personally don’t want other agents’ contracts dictating my deals so I don’t hesitate to be one of the first in the pool.
We in the agent community know who does good, average and bad deals. So I will always take a look at what agents are representing players drafted next to my client(s). If they’re inexperienced agents, I’ll definitely work hard to get a deal done before they complete their deals.
A lot a cap managers/negotiators are under some of the same pressure as the agents. And so, the standoff begins. No one wants to be the cap guy who paid a premium in a certain round and screwed up everybody else’s allocations. Cap guys are quietly critical of each other’s deals because the contract comps affect everybody. Before negotiations open up, teams try to pre-allocate their rookie cap pool numbers for each round.
You’d be surprised at the amount of money and terms that hold up a contract. For example, it could be the payout terms of the signing bonuses. More and more teams have deferred payment of signing bonus monies.
Historically, the Cardinals’ Bidwills are the worst. They mandate that their draft picks receive their signing bonuses over a three-year period. This practice is occasionally acceptable for first rounders, but they do it across the board. If a fifth rounder receives $100,000, for example, they want to give him $33,000 in each year of a three-year deal. So imagine a kid trying to buy a car and get settled in a new city. After signing, he receives about $18,000 after taxes and has to pay his agent $3,000, purchase or pay back $3,000 for career disability insurance, maybe pay off some loans and help out his family. Needless to say, the money is gone quickly. Mr. Bidwill (and other teams that do this), please do right by these young men and pay out their entire signing bonuses when they sign their contracts. That’s why it’s called a signing bonus.
One of the most interesting signing bonus-related stories that happened to me occurred in 1991.
I had a linebacker drafted by an NFC team in the fifth round of a 12-round draft. We’ll call him B.B. He went to a Division II school in Texas and was not the sharpest crayon in the box. However, he could run fast and hit hard. The GM I dealt with is now out of the league, but he was a memorable character.
B.B. got his signing bonus. It was about $68,000, and he signed about three weeks before camp. The dirt-poor young man had never seen more than $50,000 in his life. In May, I loaned him about $1,000 or so to hold him over until he got his signing bonus. I also set him up with a banker in his new city who helped him set up a savings account. We wanted to make sure he had enough money to eat and train back in his small Texas town.
I didn’t get to know this player well, nor get to spend a lot of time with him as I usually do with others.
Soon after camp kicked off, B.B. said his back tightened up during the first few drills. The personnel director called me at the time and told me that B.B. looked lost and out of shape.
The next day when practiced started, there was no sign of B.B. It took us about a day to find him; he somehow made his way back to Texas to get looked at by his own doctor, or so he said. I called his college team doctor, who said he hadn’t seen B.B. in seven months. His college position coaches finally tracked him down and convinced him to return to his NFL team.
The team rehabbed his back for a few days and threw him back in to practice. He even went to see the GM and apologized for skipping town and promised he would never do it again. Then they literally hugged it out.
After a horrible showing at the next practice, he was AWOL again. His stuff was gone from his room and nobody knew where he was. In the meantime, the GM called to berate me, telling me that B.B. was “stealing his signing bonus, failed his drug test and was using cocaine and marijuana,” an allegation I could never confirm.
He also told me that if I didn’t get his signing bonus money back, they would never draft another one of my players again. Then the personnel director began calling me, pleading with me to get the money back because the GM had told him that he was going to fire him because he was the one who drafted B.B. It was a pretty stressful week for an agent trying to launch his career. I was feeling the heat and not sure what to do.
B.B. didn’t have a cell phone, so I couldn’t get hold of him. Later that day, I got a call from his banker. She told me that B.B. had just come through the drive-in window in a cab asking to withdraw the balance of his account, which was $36,000. He wanted the whole thing in cash, sent through one of those tube systems. Needless to say, the whole thing seemed fishy to the banker. She also called the team to notify them that one of their players was there demanding his money in cash. The bankers told B.B. to come back later in the day to get the cash. When he did, through the drive-through again, the GM was waiting there for him and demanded he turn over the rest of the cash.
I didn’t know it at the time, but B.B. signed over the balance of his account to the team and was cut. The personnel director kept his job and I had about 10 players sign there over the next few years.
It really amazed me at the time how many people were involved with wrestling away the signing bonus from the player. Even the owner was involved, as the bank, I believe, was trying to appease him as well.
Today, the signing bonus component of the contract is filled with so much language that it hardly resembles a “signing bonus” anymore. Teams have done a good job protecting their cash investment.
To date, there has been one 1st rounder, two 5th rounders, one 6th and two 7th rounders done thus far. These deals have been put in the books by experienced agents. However, don’t expect to see a lot of deals get done early this year with the exception of a few top first rounders that teams feel they have to get into camp early. By the way, expect any f irst-round QBs who get done early to start for their respective teams. Also, I do want to acknowledge that agents are sometimes guilty of foolish holdouts for reasons that are not always in the best interests of their clients. I’ve seen holdouts go a few weeks, including one with the Packers and their first-round pick one year in which the difference was only $10,000 from the Packers’ day-one camp offer.
One problem that’s developed over the years is the competition between agents and agencies. So if one of larger firms has a pick slotted next to a competitor, I guarantee you there will be some competition on the deals. Neither firm really wants to go first. Both firms also want to beat the other’s deal and then use it as recruiting material the following year. For the most part, though, the majority of seasoned agents do what’s in the best interests of their clients. But there are still a handful of egomaniacs who make all of us look bad.
By the way, I later found out that B.B., my former client, was overwhelmed by the small amount of cash he received, quit working out that summer and was seen running with some shady characters. He went on to work as a gas station attendant in his Texas hometown.