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Apr 10

Poison Pills and Alex Mack

With the news of the Alex Mack contract with the Jacksonville Jaguars fresh in the news a phrase I had not heard in some time is resurfacing- “poison pill”.  A poison pill contract is a type of contract that is given to a player whose rights are still controlled, whether by the restricted, franchise, or transition designations, by another team. The offer sheet is then written with a specific clause that does not allow the other team to match the offer sheet.

The most famous “poision pill” contracts were used by the Seattle Seahawks and Minnesota Vikings who got into a bit of a struggle over free agents. Minnesota fired the first shot when they signed Seahawks G Steve Hutchinson to a $49 million contract, which contained the stipulation that if Hutchinson was not the highest paid offensive lineman on the team the entire contract would guarantee. Seattle already had a highly compensated lineman (Walter Jones) and thus could not match the offer sheet. Seattle fired back signing Vikings WR Nate Burleson to a similar deal that would guarantee if he played at least five games in the state of Minnesota. Burleson quickly became a Viking.

The NFL would eventually ban this practice, explicitly stating “no poison pills”.  Now the terms of an offer sheet must apply equally to both teams. That means you can not craft an offer sheet that gives bonuses for playing games in a certain state or guarantee if the contract is higher than a specific positional players already on another team. For the most part the practice was gone.

Based on some rumors it sounds as if Mack and the Jaguars are going back to an offer sheet made by the New York Jets in 1998 to Patriots’ running back Curtis Martin as a basis for Mack’s offer sheet. The Jets devised a contract where Martin would be paid $4 million guaranteed for the 1998 season, which was a pretty high number in 1998 and near impossible for the Patriots to fit in their cap, but with a twist.

About one month after signing the contract, Martin would have to decide whether or not to exercise a player option that kept in place the remaining five years of the contract. If he did not invoke the option he would become a free agent in 1999 and the team would not have the ability to name him a Franchise or Transition player. If he did exercise the option the remaining years would stay and Martin would be paid an option bonus of over $7 million.

From the Patriots perspective what the contract was trying to accomplish was clear.  Because the decision period was so short, it was almost a given that Martin would void the contract and waltz to the Jets in 1999 if they matched the offer. Since he could not be declared a Franchise player the Patriots would get no compensation when that occurred. In addition if Martin did invoke the option the Patriots would have serious maneuvering to do to get their roster cap compliant. They also knew that Martin was going to exercise the option once he was a member of the Jets. In essence, Eugene Parker (Martin’s agent), Bill Parcells, and Jets cap manager Mike Tannenbaum crafted two contracts- one that would apply to New England and one to the Jets- in one offer sheet. New England protested but eventually Martin became a member of the Jets, who he would finish a Hal of Fame career with. This type of “poison pill” is not banned by the NFL, since it treats both teams equally on paper.

With the Cleveland Browns having so much salary cap space, the only way to steal Mack away is to craft an offer sheet that they can’t match for other reasons. I thought this might be accomplished through well above market cash flows on the front end of the contract, but it sounds as if the Jaguars want to be more certain. Most reports make it sound as if Mack does not want to return to Cleveland primarily because they did not show real interest in keeping him long term at the start of the process. Perhaps the constant turnover in the front office also plays a role in the decision. Using Martin’s contract as a template essentially gives Mack the out he wants. Questions of injury would certainly be an issue but that would be the risk that one takes. They could push the option date further thus giving him time to assess his health and the market, but the further that’s pushed out the more chance there is that the Mack would stay in Cleveland which does not protect the Jaguars interests, though they would likely have moved on by 2015 anyway.

If the Browns lose Mack they have nobody to blame but themselves. Because of the disparity in costs between a center and elite tackle, the tag game should have never really entered the equation. At a $10 million contract Mack would be one of the most overpaid players in the NFL.  It is a position where you simply should begin negotiations as soon as you know you want the player. Considering the cap space and low payroll the Browns have if they must have gone the tag route they should have used the franchise tag to protect their interest. The cost of the franchise tag was only $1.6 million more and it gave the team the ability to receive two first round draft picks if Mack signed with another team.  Now they get nothing if they do not match the offer sheet. The Browns have been poorly managed for years with a revolving cast of characters in charge of the franchise and this is just the latest potential mishap for the team.


 

  • KJinCton

    Interesting article. I now know more than I did before I read it…:-)

  • DubyaJD

    Disagree with your assessment of the current Brown’s front office handling of Mack. Mack wanted to become a FA and have the market establish his value and, although, leaving Cleveland was not his #1 motivation, he would not shed a tear if he had to leave. The Browns really wanted to keep Mack on a long term deal, but for the reasons cited and the way Joe Banner handled the initial negotiations (or lack thereof) the Browns could not get Mack to seriously negotiate a long term deal with the team. So they did the next best thing, they put the transition tag on him and sat back and waited for another team to negotiate the contract that they could not. Now the Browns have the option to accept the deal that Jags negotiated or let Mack go. It’s not an ideal situation for the Browns to let another team dictate contract terms for them, but without the transition tag they would have had no opportunity to keep Mack beyond one year and would have had to use the franchise tag to get that. . . .and who knows, Mack may spend the entire five years of the contract with Cleveland. This is a win for both sides.

    • Edward Rychwalski

      Interesting take DubyaJD. I hadn’t thought of that. I assume Mack would be pretty pissed if that actually happens. That is assuming they actually wanted to keep him. If, as Jason suggests, they don’t really want him ,then his assessment is probably more accurate.