Getting inside the Crabtree negotiations
It seems like every year there’s one negotiation that stands out as the last remaining battleground between a player and a team. The fact that this year’s last man standing is Michael Crabtree is not surprising, for a few reasons:
Crabtree appears to have a “herd” of enablers around him, including a cousin who’s a self-proclaimed adviser and enjoyed his 15 minutes of fame earlier this summer when he announced that Crabtree might sit out the season;
Eugene Parker, Crabtree’s agent, is going to pursue his concept of “value” to the fullest extent and will be pleasant, professional and maddeningly patient in trying to get the deal he wants;
The 49ers were admittedly elated when Crabtree fell to them in the draft and have not wanted (and don’t want) to inject a contentious tone into the negotiations.
The deadline has passed for any potential trade of Crabtree; that ship sailed on Aug. 14. Crabtree will be a 49er. Pay no attention to the rumor of him sitting out the season.
Now there’s a report of a requested meeting by the president of the club, Jed York, to try to inject a fresh new voice into the negotiations, which have been handled by the club’s able contract negotiator, Paraag Marathe. This is a nice public relations move by the team to show it’s doing everything it can to sign the player, although probably not something that will have much effect.
This negotiation has been dissected by many, including myself and my NFP colleague Bob Boland yesterday. Here, though, is a more in-depth look into the issues and the points of contention that may be taking place:
Parker’s calling card is to try to negotiate the shortest length possible on contracts. In Green Bay, I negotiated two first-round picks with him in the past five years -- for Ahmad Carroll in 2004 and Justin Harrell in 2009 -- and like clockwork, Eugene’s first and foremost request was a contract of four years in length, matching the number of years required to reach free agency. Parker understands that the most important thing about a first contract is to set up the second contract, where the true money is made.
Recently, Parker has negotiated two remarkable wide receiver contracts, those of Larry Fitzgerald in 2008 and Greg Jennings in 2009. Beyond the top-of-market APY (Average Per Year) and guaranteed money of these deals, Parker was able to have a term of four years in length, allowing both Fitzgerald and Jennings to have another shot at the free agency spending spree before they turn 30. These are gold standard contracts.
When I negotiated the contract of Jason Peters for the Eagles with Parker this spring, Peters was made the highest-paid offensive lineman in the NFL, but only with a six-year term. Parker fought hard but eventually agreed to a six-year deal kicking and screaming along the way.
Although there hasn’t been a four-year deal in the first round for 10 years – not since Parker client Chris McAlister in 1999 -- Parker will try with Crabtree, knowing he will have to let go of that demand but try to use it as a bargaining chip for a concession. He does not have any leverage to ask for that term.
These deals are for five or six years. The 49ers are willing to pay more guaranteed money to have a six-year deal, but Parker will take less to have the five-year term, a term he will accept while feigning disappointment to not get a four-year.
Total Base Contract and Guaranteed Money
Despite all the banter about whether Crabtree, the 10th pick in the draft, deserves to be paid like a top five or top seven pick, that argument is a nonstarter -- and Parker is smart enough to know that.
The contract of B.J. Raji at No. 9 is the most relevant. Normally, the team would try to slot in Crabtree between Raji and the 11th pick, Aaron Maybin, but the 49ers have generously not even tried to slot Crabtree, focusing on the Raji deal above.
Raji has a five-year deal (it’s written as a six-year but voids to five with minimum play time) with a conventional option bonus/one-time incentive structure. The base deal is worth $22.5 million; the guaranteed amount is $17.7 million (79 percent of the base contract). The increases from the 2008 pick, Keith Rivers, are 14.6 percent for total and 14.7 percent for guarantee.
This is essentially the deal that the 49ers have offered, bringing Crabtree right to the brink of the pick before him. It has not closed the deal, however, a huge source of disappointment for the club, as it would be for me if I were doing this deal.
The escalator provides upside in the contract based on the player’s performance. This is where things get tricky. In negotiating another first-round receiver’s deal this summer, I spent many more hours on the negotiation of the escalator than the hard dollars of the deal on Jeremy Maclin’s contract with the Eagles.
Issues to be resolved include the following:
- the year(s) in which the ability to escalate kick in;
- the year(s) in which the salaries start to escalate;
- the thresholds for the ability to escalate -- number of receptions, number of touchdown receptions, amount of reception yardage, playing time percentages, etc.;
- ability to void the contract prior to expiration due to superior performance;
- honors escalators for all-rookie, rookie of the year, Pro Bowl, other honors.
These are all negotiations in themselves, creating upside for the player beyond his base contract. The 49ers are certainly trying to adjust these escalators to penalize Crabtree for time missed this year, while Parker is trying to infuse these escalators with easier thresholds and levels of performance while pushing most of the performance criteria past this season.
Parker created a monster with the rookie contract of Fitzgerald, who earned so many escalators early in his contract that the deal became unworkable for the Cardinals, with cap numbers approaching $20M in the latter years. Thus, Fitzgerald and Parker had extraordinary leverage in last year’s extension with the Cardinals when he received the striking contract discussed above. This is what the 49ers are trying to avoid with the escalator.
Raji had a maximum escalator of $6M, with $5.3M of play time, $700,000 in honors incentives. $1.8M of the escalator was in the fourth year, $4.2M is in the fifth year. Parker is seeking considerably more, in line with Darrius Heyward-Bey’s maximum escalator of $15.8M, although $6.5M of it is what we consider “fluff”, escalators that rival the performance of a Jerry Rice or Randy Moss -- funny money that the team doesn’t expect to be earned.
The 49ers would like to have a larger base salary to inflict some sort of penalty (1/17th per week) for Crabtree missing these games early in the season.
Parker and Crabtree want the minimum salary, meaning that Crabtree is only missing out on 1/17th of first-year minimum ($310,000, or $18,000 a week)) and the rest in the form of roster bonus or signing bonus, earnable upon signing the contract, unaffected by this holdout period.
So, to answer a question many people have emailed me, what would I do if I were representing the 49ers? Not much different than what they’ve been doing, but here are some guidelines:
1. Maintain a positive working relationship with Parker despite the holdout. Patience is required here because Eugene is as composed as they come and will not be infl uenced by fan or media pressure to sign. He has probably imbued Crabtree with some of the same.
2. Try to cut through the charade of the player wanting to be paid outside of the slot. For every argument like that, the team could say that if they didn’t draft him, he may have slid way down the draft and they could be negotiating around the fact that they saved him a lot of money by taking him. He was the 10th pick, for better or worse.
3. Offer a substantially similar APY and guarantee as the Raji deal, a generous offer off of a reasonable deal done by the Packers. It’s more than the 49ers want to pay and takes the deal to the brink of jumping the slot ahead and potentially rewarding the player for holding out, but my sources say that deal has been contemplated all along.
4. Offer upside escalators between the amount of Raji and the amount for Heyward-Bey, although have a great deal of “fluff” in the escalator -- performance levels only achieved by the top receivers in the game. This lets the player shout to the world that his contract has a maximum value of, say, $35 million, while everyone inside the industry knows it’s really a deal of $22M, with another $6M of reachable escalators. The team will also make sure the escalators are evenly balanced for performance in years one through four, extracting a penalty for missed time this year.
5. Insist on a six-year term, knowing they would agree to a five-year term. I believe, however, they are beyond posturing about years at this point.
6. Insist that much of the compensation for 2009 be in the form of guaranteed salary rather than a combination of that plus signing bonus, roster bonus, etc. With a cap number of $2M, if the entire amount was salary, Crabtree would be losing $118,000 per week missed, a $100,000 difference compared to what he would be losing with minimum salary. With that structure, the team does not need to make hollow threats about lowering the offer. It will be lowered automatically.
7. Be as nice and patient as possible. The more that Parker, or any agent for that matter, can create angst and anger from a front office, the more they are getting inside the heads of management. Never let your adversaries become your enemies.
8. Crabtree appears to have a healthy opinion of himself. I never engaged in personal discussions of “who’s better” with agents or players; there was nothing to be gained from that. I would appeal to Crabtree’s sense of self with heavy upside at high levels of performance. One tenet of negotiations that I hold paramount is the following: Never underestimate the importance of ego and insecurity.
The 49ers do a good job in contract negotiations and have certainly thought through all of these issues. This is a tough one, but the mark of a good negotiator is to never let them see you sweat. The 49ers have to be frustrated, as are their fans and media, but they have to keep their eye on the ball. As they know, these few weeks are about five years of contract. This, too, shall pass, and the Crabtree summer of discontent will be a distant memory...I think.
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