Arrington's Knee: The Waiver

The Denver Broncos’ marriage to running back J.J. Arrington appeared doomed from the start. Although it appeared a deal was struck on the first day of free agency, it was held up at the league level due to issues with the contract. Those issues may have revolved around injury protection for the Broncos, and the delay in working out the issues may have been fortuitous for them.

The Broncos have now waived Arrington, a player they targeted on the first day of free agency in February. Although the money is relatively small, the fact that a player who signed in the first week of March is now being terminated – failed physical or not – is highly unusual.

The Broncos did protect themselves. Arrington’s contract had $1.8 million of bonuses staggered throughout the offseason, written in a way to gauge Arrington’s progress with his knee and see how it responded during offseason workouts and minicamps. And, of course, it did not.

The contract bonuses were set up this way:

$100,000 upon signing

$300,000 on June 15

$600,000 on Aug. 10

$800,000 at the start of the season

Thus, the Broncos had three flashpoints past the signing of the contract to check on Arrington’s knee and determine if he would be kept around. Arrington did not make it to the first snapshot date of June 15 and his contract was terminated, failed physical.

With these bonuses now turning to dust, what about a potential injury grievance against the team? That argument is a non-starter, as Arrington agreed to an injury waiver written into the contract, protecting the team from grievance liability in the event his contract was terminated because of the pre-existing medical condition he had at signing. And what was that pre-existing condition? According to his contract, it was the following:

Right Knee Partial Lateral Meniscectomy and Lateral Femoral Chondyle Osteochondral Lesion and Related Pathologies

Teams and agents often spar about the language in these injury waivers. In the past, I’ve used very similar language to the above. The team, of course, wants it as broad as possible to include all directly or indirectly related injuries to the pre-existing one. The agent wants to limit the scope of the waiver with as much specificity as possible, especially with knees. The language above shows the Broncos were able to have a fairly broad waiver to protect their risk.

So Arrington walks away from his three months with the Broncos with a parting gift of $100,000 and appreciation for his time spent. The Broncos, who signed two other running backs – Correll Buckhalter and LaMont Jordan – in free agency and drafted a running back – Knowshon Moreno – in the first round, appear content to move on from this failed union.

Time will tell if another club takes a similar calculated risk on that knee.

Wednesday Whys

Why is President Obama’s choice for nomination to the United States Supreme Court, Sonia Sotomayor, well known in NFL circles?

Sotomayor’s connection to Major League Baseball has been well documented, but she should be a hero to NFL teams and their scouting staffs everywhere. In 2004, Ohio State running back Maurice Clarett (remember him?) was a true sophomore who wanted to challenge the eligibility requirements of the NFL Draft, claiming that the rule only allowing entry into the draft after three years removed from high school was an unreasonable restraint of trade.

Clarett sued in U.S. District Court and won, temporarily making him and USC wide receiver Mike Williams – and potentially all underclassmen — free to enter the draft. The NFL, of course, appealed the ruling, arguing one of the canons of labor law: As long as the rule was collectively bargained, it was immune from antitrust attack.

Upon appeal, the District Court decision was reversed by the U.S. Court of Appeals for the Second Circuit and a panel of judges including – you guessed it – Sonia Sotomayor. Her ruling read, in part, “The NFL argues that federal labor law favoring and governing the collective bargaining process precludes the application of the antitrust laws to its eligibility rules. We agree.” It did not matter that Clarett was not a member of the bargaining unit, the NFLPA, at the time the rule affecting him was agreed to. Labor law is clear that restraints include not only present members of a bargaining unit, but future members as well.

As for scouting staffs, one can only imagine what havoc a different ruling by Sotomayor and her panel would have wreaked. Without a delineation on eligibility for the draft and a ruling that the NFL rule was an unreasonable restraint of trade, all bets were off on who was eligible. This would have meant that NFL teams would have had to start scouting sophomores, freshmen and even high school players for the draft! And we think the manpower and expenses of college scouting are bad now? It truly would have been anarchy.

We have new Supreme Court nominee Sotomayor to thank for preserving scouting as we know it.

Why is it news that Tom Brady is back practicing with the Patriots?

Because he’s Tom Brady, I guess. There’s no news here; we can all stop staring (at his new wife) and go home.

Brady moves the meter and drives the product, so any news is good news for the media, the Patriots and the NFL when it involves Giselle’s husband.

The fact that Brady looks healthy after his horrific injury in the opening game last season is to be expected. The Patriots would not have dealt Matt Cassel within hours of the opening bell of the trading period in February without strong feelings about the availability and readiness of their superstar. The Patriots placed the franchise tag on Cassel for one reason only — to get value for him in a trade rather than losing him in free agency with only the hope of a compensatory pick at the end of the third round of the 2010 draft. Brady’s health was not the issue, or so they hope.

Why would Anquan Boldin fire agent Drew Rosenhaus after all their time together?

Boldin has apparently tired of waiting for a new contract, whether from the Cardinals or anyone else. Drew did secure one contract extension for Boldin but not another. Drew was able to wrangle what was then a large contract extension out of the Cardinals in 2005 with two years still remaining on Boldin’s rookie contract. At that time, I was dealing with Drew on Javon Walker, and Drew rightly used that precedent from Arizona to sell the fact that he was able to secure that deal for a similar player with a team that had previously shied away from such extensions.

Soon after that, Javon let us know that he was no longer working with Drew, although the fact that there was a new agent did not change our unwillingness to tear up Javon’s contract. Boldin wants a new contract badly and, to this point, been been unable to secure it. He obviously feels a new agent will help that process. Time will tell.

Like Walker, Drew was not Boldin’s first agent, and now, like Walker, not his last.

And, finally, a Why to Ponder…. Why do baseball managers wear uniforms?

Is there a reason for this? Can we imagine NFL coaches throwing on jerseys and football pants to call the game on the sideline, or NBA coaches suiting up to call out defenses? Some of the images are not pretty.

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.

Monday Money Matters

From all of us here at the National Football Post, we want to wish you a safe and happy Memorial Day and cherish the efforts and sacrifices of those protecting our freedom everywhere. In thinking of them, I recall a quote from Winston Churchill, a favorite of my colleague Michael Lombardi:

“It’s not enough that we do our best; sometimes we have to do what’s required.”

On to Monday Money Matters. The NFL allowing teams to open sponsorship categories involving state lotteries (and potentially liquor deals to come) is another sign of the times. No longer can the league stand on principle against the unspoken connotation of lotteries – the “G” word (gambling) – in denying teams the right to secure a new stream of revenue from these potential sources. Opening up the category of lotteries gives teams another place to look to guard against the projected drop in future revenues, as sponsorship budgets for the coming year – or lack thereof — are being set now. The Patriots and Redskins – two of the most proactive teams in sponsorship sales — have already jumped on board and set market rates with their state lottery boards, while the Jets, Giants, Ravens, Lions, Titans and Vikings are in similar discussions.

The issue of gaming connotations with sponsorships is not new. At the Packers, we had strong relationships with the Oneida Tribe (on whose land I still own a home) as they were one of the four gate-naming rights partners (the Packers will never – although I should never say never — sell the naming rights to Lambeau Field). The Oneidas are also owners of several casinos around Green Bay and Wisconsin bearing their name. The Packers were long allowed to have this sponsorship, with reluctant acceptance by the league. …

Beyond opening up those sponsorship categories, last week was perhaps as good a week as the NFL could have in this economy, as a good chunk of the broadcast side of the business has fallen into place for the future. Deals were struck with three important and gold standard partners – Comcast, CBS, and Fox – with perhaps more to come.

Brian Roberts of Comcast and Roger Goodell of the NFL became personally involved to overcome years of stubbornness, rhetoric and posturing on both sides as an agreement was reached for Comcast to provide NFL Network to a larger base of subscribers at a much more reasonable rate than the NFL had been previously demanding.

As with any negotiation, it was more about building relationships than numbers crunching in order to solve the issues. These negotiations had become stale and at impasse, so a new group of negotiators became involved: Goodell, Roberts and their CFOS – Anthony Noto of the NFL and Mike Angelakis of Comcast. The freeze of negotiations was also melted by a personal visit from owners Jerry Jones and Robert Kraft to the Comcast offices in Philadelphia earlier in the year. Finally, the deal between the NFL and Comcast is done. Look for Time Warner to be the next target in the NFL Network’s crusade for carriage.

With the Sunday Night package still outstanding after NBC’s rights expire in a couple of years, having Comcast as a partner can only be beneficial, even if for leverage purposes only.

Further, the NFL extended its AFC and NFC packages with CBS and Fox for two additional years. Although the increases in the rights fees were modest, any increases in this economy – especially at the mega-numbers we are talking about with these deals – is impressive. Moreover, like the earlier Direct TV deal, the money is largely guaranteed even in the event of a lockout in 2011, a development that is more significant than we may know.

With the bulk of the broadcast negotiations now out of the way, the NFL can focus on the remaining critical issue for the future: labor. NFLPA boss DeMaurice Smith addressed the NFL ownership at the meetings in Florida last week and, although there was nothing substantive from his address, the fact he was face-to-face with that group is only positive.

Smith appears to be proactive in his media and team appearances. Now the focus will be to see when he is proactive in jump-starting negotiations on a new Collective Bargaining Agreement. At stake is football without a Cap in 2010 and football at all in 2011. …

Enjoy your holiday.

Favre And Vick, Oh My!

These are interesting times in the media coverage of NFL players. On the field, it’s time for minicamps and OTAs (Organized Team Activities), the necessary spring development of the fall product, a galvanizing time for the team to learn from and about each other in building the team dynamic for the coming season. No matter whether the team has a lot of turnover or hardly any at all; each group is different and each group dynamic is separate.

From a front-office perspective, I found this time of year intriguing in watching the team bond, seeing who the alpha dogs were going to be, seeing which players were coming out of their shells, which leaders were developing, etc.

Off the field, though, it’s quite a different story here in May 2009. The two central figures of media coverage this month may not play a down of football this year (or they might). They are admired and reviled at the same time. They are now both surrounded by friends and family while somewhat isolated in their large southern homes. Their moves are being tracked with copious detail every day. They have reporters delivering updates from in front of their homes, although what passes for news is quite fluid with these two players.

The two names, of course, are Brett Favre and Mike Vick. Their situations are born of vastly different circumstances, yet there is one thing they clearly share: Neither of the teams with whom they achieved rich glory and fame wants them back.

Eleven months ago this week, Brett had the fateful conversation with Packers coach Mike McCarthy in which McCarthy’s answer to Brett’s request for his helmet was, “We’ve moved on.” Those words still ring in Brett’s ears.

Vick is technically still the property of the Atlanta Falcons. However, in a preemptive statement, Falcons owner Arthur Blank let the world know that Vick will not be playing for the Falcons again (his version of “We’ve moved on”).

Two superstars. Two faces of their franchises, adored in the cities they came to symbolize. Two drivers of the product for the Packers, the Falcons and the NFL. Now – for different reasons – they are not welcome to play in those spaces anymore.

The coupling of these names brings back a bad memory for me. It was the playoff game of Jan. 4, 2003, a season where we at the Packers felt we had a respectable shot to win the whole thing. With an 11-0 record in playoff games at Lambeau Field, things seemed in place against the underdog Falcons. They would be coming into the freezing temperatures of Lambeau Field — although it was a balmy 28 degrees — and pack it in soon after trying to compete in the brutal weather. Or so we thought.

My images from that game remain: a blocked punt for a touchdown by the Falcons early in the game, a bad early sign; Vick running wild – through, around, over and in between our defense, making even the most mobile of our defensive linemen, Kabeer Gbaja-Biamila, appear slow-footed; snow falling, temperatures dropping and the realization that the cold and long offseason in northeastern Wisconsin was upon us sooner than we anticipated; the absolute quiet of the evening, both in our box and, unfortunately, in the stadium (it was perhaps the quietest I have ever seen Lambeau aside from the time Lawrence Tynes kicked the game-winning field goal in the NFC Championship game a year ago); the noise and celebration a couple of boxes away, where Arthur Blank and his guest, Georgia governor Sonny Perdue, were pumping fists, high-fiving and relishing the win; the speculation about Favre retiring starting a few hours later.

Favre and Vick, together on the field that night, are now together as lightning rods that the media has latched on to in this spring of 2009. Watching the media cover these two stories is like watching four-year-olds play a soccer game, where clusters form around the ball wherever it goes. Similarly, clusters form around the Favre home in Mississippi and the Vick home in Virginia, moving with the “news” of Favre staying retired/un-retiring, surgery/non-surgery, talking to the Vikings/not talking to the Vikings, etc. and Vick’s arrival from prison and sighting around the house. Soon, the cluster will move to Vick’s construction job and Favre’s throwing to high school kids. As with the four-year-olds and their soccer game, no one knows where the cluster will move next.

Favre and Vick, the media antidote for a lull in the NFL calendar. Cluster ball at its best.

Wednesday Whys

Why is Jim Johnson taking a leave of absence from the Eagles?

Johnson is leaving to devote more time to his battle with cancer. He’s a special man. I have been around the Eagles these past couple of months and have noticed his impressive resolve in the face of obvious pain and fatigue. Johnson – beyond his obvious prowess as a defensive coordinator – appears to be as humble and polite a man as one could find. He treats all employees the same and with the appropriate respect and grace. We wish him well and will keep him in our thoughts in these difficult times.

Why were the NFL and Comcast finally able come to an agreement after years of dispute? As is true in any business, especially the business of football, everything is a negotiation.

Tisdale's Teachings

Wayman Tisdale is someone every NFL player – as well as professional athletes in any sport – should emulate. Tisdale passed away last week at age 44 after a two-year battle with cancer, succumbing to the deadly disease with a positive outlook and an omnipresent smile filling the room even in his darkest days. Tisdale should be remembered and revered for several reasons, perhaps the most impressive being that he achieved great success in two careers, athletics and music.

I met Tisdale only briefly when I worked for David Falk representing NBA players.

Monday Money Matters

The NFL Salary Cap has risen again. Due to a new mechanism that was created in the most recent amendments to the Collective Bargaining Agreement in March 2006, there is now close to $1M more per team of available Cap room – around $30M league-wide — than there was a week ago. Although the reason for the increase is a bit technical, I thought I would give readers a look at why this increase happened – two different times over the past couple of months – and how the amount is artificially inflated due to the fact that 2009 is the last year of the Cap.

The Cash Adjustment Mechanism (CAM) was developed by the NFL and the NFL Players Association as a method to ensure Cap adjustments based on actual Cash spending on an annual league-wide basis. There are two types of accounting in the NFL