Rumor: Jason Pierre Paul Seriously Injures Hand in Accident

According to a report from WINZ in Florida, Giants star defensive end Jason Pierre-Paul has been involved in a serious accident involving fireworks which may have severely injured his hand. Pierre-Paul is currently a franchise player for the Giants, but does not have an active contract with the team.  He had been hoping to negotiate a long term extension with the Giants that would pay him in excess of $14 million per season. His one year tender offer was worth $14.8 million and now it could be worth nothing. Continue reading Rumor: Jason Pierre Paul Seriously Injures Hand in Accident »

Sheldon Richardson Suspended

Jets star defensive end Sheldon Richardson has been suspended for four games due to a violation of the leagues substances abuse policy. Richardson will lose $310,353 in salary and forfeit another $334,823 in bonus money. That is a major financial loss for a player scheduled to earn just under $1.32 million for the season. Richardson will also lose the guarantee protection in his current contract. Continue reading Sheldon Richardson Suspended »

Best & Worst 2015: The Worst Running Back Contracts

For the last two seasons I have done a summer “Best and Worst” contracts for each team in the NFL, but I decided this year to put that on hold since it recycles so many players and instead take a positional approach to the concept. So during the course of the summer I’ll do my choices for the top three and bottom three contracts at each position from a team perspective. As usual the rules are no rookie contracts allowed in the selection. Here are my selections for the worst contracts at the running back position.

Continue reading Best & Worst 2015: The Worst Running Back Contracts »

Using M&A Collar Provisions to Solve the Underpaid Star Problem (Part 2 of 2)

In this two-part series, I will propose a unique contract structure that can potentially help teams and star players agree to terms by addressing some of the risks faced by each. In Part 1, I will identify the unique concerns of star players and describe a method by which corporate attorneys address similar concerns in an analogous context. In Part 2, I will use the concepts described in Part 1 to design similar provisions applicable to the NFL context.    

As I explained in Part 1, star players face a large degree of uncertainty as to the future market price for their services, and they desire to minimize the opportunity cost associated with being locked into a contract. The longer the potential contract, the more uncertainty and opportunity cost faced by the player. In M&A transactions, a similar risk exists during the period between the signing and closing of a deal due to the fluctuation of share prices on public stock exchanges. M&A practitioners sometimes combat this problem by using “collar” provisions that cap and shift uncertainty-related risk at predetermined levels of market fluctuation. Today, I will explain how this concept can be used within the context of the NFL.

Continue reading Using M&A Collar Provisions to Solve the Underpaid Star Problem (Part 2 of 2) »

Using M&A Collar Provisions to Solve the Underpaid Star Problem (Part 1 of 2)

In this two-part series, I will propose a unique contract structure that can potentially help teams and star players agree to terms by addressing some of the risks faced by each. In Part 1, I will identify the unique concerns of star players and describe a method by which corporate attorneys address similar concerns in an analogous context. In Part 2, I will use the concepts described in Part 1 to design similar provisions applicable to the NFL context.

Every contract signed in the NFL carries risk for both the player and the team, but contracts involving star players carry somewhat unique risks. Most NFL players sign long-term deals with the knowledge that it is unlikely they will remain under contract for the duration of the deal, and thus their primary risk is that they will not receive all of the money they are purportedly scheduled to earn. These players simply attempt to maximize the amount of money they actually earn. The team, on the other hand, attempts to limit its risk related to injury or performance decline.

However, star players are much more likely to remain under contract for the duration of the deal, as they are less easily replaced by cheaper free agents or draft picks and more likely to continue delivering surplus value to the team.[1] Furthermore, the market price for star players tends to continually increase by a material amount. Therefore, the primary risk for a star player is the opportunity cost associated with being under contract and therefore being unable to receive a new, larger deal. Teams, however, understandably desire to capitalize on this surplus value, given the larger initial risks associated with star player contracts.

Continue reading Using M&A Collar Provisions to Solve the Underpaid Star Problem (Part 1 of 2) »

Best & Worst 2015: The Best Running Back contracts

For the last two seasons I have done a summer “Best and Worst” contracts for each team in the NFL, but I decided this year to put that on hold since it recycles so many players and instead take a positional approach to the concept. So during the course of the summer I’ll do my choices for the top three and bottom three contracts at each position from a team perspective. As usual the rules are no rookie contracts allowed in the selection. We start this week with a look at running backs.

Ryan_Mathews3. Ryan Mathews, Philadelphia Eagles (3 years, $11 million, $5 million fully guaranteed) Continue reading Best & Worst 2015: The Best Running Back contracts »

The Russell Wilson Guaranteed Salary Problem

This past weekend there was again much talk about Russell Wilson’s contract with the Seattle Seahawks, mostly centered around the guaranteed portion of the contract. This was something I speculated about months ago when the Seahawks mentioned “outside of the box” thinking on Wilson’s contract and it looks to be a divisive issue between the sides.  Wilson’s agent is primarily a baseball agent, a sport where contracts are fully guaranteed so it is a logical point for them to take. So let’s see if we can sort this out. Continue reading The Russell Wilson Guaranteed Salary Problem »