NFL Insider's Guide to the Art of Free Agent Contract Negotiations
NFL free agency is a giant game of poker that began last Friday. Since 11 p.m. CST that night, I have been able to speak with NFL personnel and front office executives about my impending free agents. In years past, most of this work was done at the NFL Combine. By the time I left Indianapolis, I would have a feel for which teams were interested in my clients and how much they would be willing to spend.
The NFL Combine had a different feel this season due to the new “negotiation” period. Free agency officially starts at 3 pm CST on March 12, but agents are allowed to speak with interested NFL teams before this time to work out a new contract. The agent and the NFL squad can have a deal firmly in place but cannot sign officially until after 3 p.m. CST on Tuesday.
Any good agent will use the offers they have as leverage to make deals with other interested teams. If I have the structure for a contract for one of my clients with one team, I will use the terms of that deal as my starting point with others. The new negotiation window has changed this practice because teams are not willing to be the basis of the deal. If a team wants a player, they know they are going to have to make a strong initial offer to keep the other suitors from matching the deal.
I have fielded calls and talked to personnel on almost all the NFL teams this weekend. This new negotiation window is new for the teams as well, and many organizations are leery about how to proceed. Each team may be targeting three or four players, but since they have to wait to sign the players until Tuesday, most teams do not have a hard commitment. This makes the hours until Tuesday run longer than normal.
I had one executive tell me he is frustrated by the new window because his team is not making any form offers until Tuesday morning. The organization does not want the agents to “shop the deal” to other teams like I described above. The team is also afraid the numbers will get into the media, and this could hurt their negotiation power with other free agents.
This same executive is very interested in one of my free agent clients, and I have known since the combine the framework of the contract the team will offer. The hard part about free agency is that you can never get too high or too low in your feelings or demands. Just like I work to get the best deal for my clients, NFL executives are doing the same thing for their owner.
The rumors this offseason are that the Miami Dolphins are going to make a heavy push to sign Pittsburgh Steelers wide receiver Mike Wallace. That is a great plan for General Manager Jeff Ireland if he can pull it off. But Ireland also knows Wallace will have other suitors, such as the Minnesota Vikings. So Ireland will hedge his bets and will also be talking to the representatives for Green Bay Packers wide receiver Greg Jennings and other free agent receivers. Teams will use that leverage against the agent and player as well.
Being creative and flexible in contract negotiations is a very important component that is often times overlooked. One team may like to structure their contracts in a certain way. Yet another team will use completely different tools to work their deals. Understanding all the angles and the negotiations tools at their disposal allows the good agents to get the best deal for their clients.
I am negotiating with two NFL teams for one of my clients right now.
Team A offered the player a large signing bonus but base salaries for the three years of the contract. The team is willing to guarantee the first two years of the contract. The signing bonus is guaranteed the minute the player signs the deal. By structuring the contract this way, the team can take the signing bonus and split it into thirds for cap space relief. So if the bonus was $3 million, Team A could put $1 million into each year to lessen the cap hit.
From the player’s perspective, the deal is solid because they get instant money in terms of a signing bonus that they can invest and grow. The two years of the base contract being guaranteed means the player does not have to worry about his contract for at least two years. With a minimum base salary in the third year, more than likely, we can re-negotiate or he can play the deal out and hit free agency again.
Now Team B is taking a completely different approach to the deal. They want the player to sign a four-year contract but are offering zero signing bonuses. They are guaranteeing the first three years of the deal which includes incentives. If these incentives such as the amount of playtime this player has are met in the first three years of the deal, a trigger is activated to guarantee the fourth year. The money is relatively the same in both deals the first three years. But if my client believes in himself and can stay healthy, the fourth year salary from Team B is significant.
In the second scenario, my client knows he will have a team and a job for three seasons guaranteed with the chance of a solid pay day in year four if he plays well. But he is also turning down a significant signing bonus, “instant money” that can be used now. This is like choosing to take the lump sum if you win the lottery or take pay outs over time.
My job is to present both deals and work to incorporate pieces of each into the others deal. If I can find a happy medium with one of the teams, my client can have his cake and eat it too.
This may sound silly talking about millions of dollars, but location and history play major factors in where free agents sign as well.
Most people would instantly pick Miami over Green Bay just on the weather. But players with families will take less to go to a winning team in Wisconsin just because of schools and the community. Former Ram Steven Jackson, who has never won a playoff game, has said he wants to play on a winning team. There may be a team willing to offer him more money, but if he feels like the team is in the playoff hunt, he will take less money.
Some teams like Buffalo and Cleveland have to make huge initial offers to free agents hoping the dollar figure will convince the player to look past the lack of winning lately and the weather. Some teams have to overpay free agents because of factors out of their control.
I think there will be eight to 10 big money deals announced on Tuesday night, but after getting a feel from speaking with NFL personnel, most of the deals will be worked out Wednesday and Thursday. Once the first shoe drops and teams are able to see which players are off the market, the next wave of signings will take place.
So while much has been made of the new negotiation window, nothing much has really changed. The top-flight players will be signed quickly, but the meat of the teams will sign in the first few days after free agency officially opens.
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