Funding rule comes into focus
Further, there is the bigger issue of the NFL funding rule for future guarantees. In simplest terms, teams must fund future guarantees that go out past the current year, placing the money in escrow. Teams have traditionally hidden behind the funding rule when explaining to agents why they can’t fully guarantee contracts, as they did not (or said they did not) have that cash to put into escrow. That excuse is weakened by what the Browns did.
Here is the problem though: There are several teams that simply do not have the cash resources, as Haslam does, to fund this kind of contract. Two of those teams will be directly in the crosshairs of this deal next year. Joe Burrow and Justin Herbert will be extension eligible a year from now, with every reason to receive an even better contract than Watson. But those teams are not owned by billionaires; they are, in essence, family businesses. The Brown family (Bengals) and Spanos family (Chargers) do not have the $180 million in cash to place in escrow as Haslam is doing for the Watson deal.
And believe me: They know it and are, well, pissed.
The Browns have done what every player and agent have wanted a team to do for decades and, conversely, what every NFL team has fought against for decades.
It is still stunning (and a bit icky) that it was done with this player.
The recent weeks have seen some upheaval in the wide receiver market in a variety of different ways.
Davante Adams and Tyreek Hill have now both moved—with great glee—from Super Bowl-contending teams and receiving passes from future Hall of Fame quarterbacks to lesser teams and lesser quarterbacks. Money was certainly part of it for Hill, but like Adams, something seemed amiss—from both sides of the relationship—between the team and the player. As I always say, even as someone who managed the salary cap for a decade—team management is less about numbers and more about relationships. There is more to these situations than meets the eye.
With the new top tier pay for wide receivers set, the next domino fell as the Bills addressed Stefon Diggs’s existing contract. I’m not sure what to believe with the numbers—the reports are all agent-driven, so it’s hard to know the real numbers—but whatever they are, the Bills “won” these negotiations simply due to the term of contract.
The Bills secured Diggs for an additional four years, beyond the existing two years they already had. Now with Josh Allen also locked up through 2028, the Bills—no matter the money—are in the driver’s seat with these contracts. They have contract control for six and seven seasons while the cap rises and the “out years” of these contracts are nonguaranteed (unlike for Watson).
New wide receiver strategy?
With the receiver market exploding, we may see a change in financial and personnel strategy. The Packers and Chiefs were signing other core players on their teams to extensions; they appeared to make conscious decisions not to prioritize Adams and Hill, and they are already on to the next, with both teams talking about the cap space and draft picks.
We are now at a point where teams are able to leverage rookie-contract wide receiver pay in the way they have leveraged rookie-contract quarterback pay. Teams like the Bengals, Dolphins and Eagles have Ja’Marr Chase, Jaylen Waddle and DeVonta Smith on highly undervalued contracts for at least two more seasons, as the CBA will not allow renegotiations with these players until they have played three seasons. These players will be making roughly $4 million per year, while similarly talented veteran players at their position are making $15 to $25 million per year. Their teams have a built-in advantage.
The CBA rookie-pay system is the gift to NFL front offices that keeps giving.
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