The 49ers Options With Chris Borland

Linebacker Chris Borland’s decision to retire from the NFL after just one season, due to fears about long term health concerns, has sparked a number of debates on the subject. The initial debates were about what this meant for the game and how player’s might react in the future to news about the dangers of football, but I think now we are starting to consider what are the potential negative financial implications associated with the retirement and what San Francisco may do to recover money from Borland.

In the NFL players are often paid a signing bonus upon signing a contract. For draft picks it is almost a certainty that they will receive a signing bonus. As long time readers of OTC know, signing bonus money is subject to forfeiture over the life of the contract for a number of reasons. The most common reason is drug/PED suspension, but a lesser known provision allows a team to recover money if a player opts to retire rather than honoring his contract.

Often a retiring player has expressed his potential desire to retire at the time a contract is signed. In other cases the player is a well established veteran who has given the NFL, and usually that team, so many great years of service that the player is lauded on his way out the door. There are also a number of situations where retirement allows the team and player to graciously end a career rather than having to release the player whose skills have declined significantly. An injury can also cause a player to retire and many times such players will be released for procedural purposes, such as David Wilson of the Giants.

One notable case I can recall where money was returned was when the Broncos traded Jake Plummer to the Buccaneers and Plummer refused to report and retired. Tampa did go after the bonus money because they had zero relationship with Plummer to consider his decision reasonable. Barry Sanders retired abrputly at the peak of his career in part because he wanted to play on a more competitive team and also returned a significant portion of his bonus money. The Lions had only two years before signed Sanders to a lurcative extension and and no idea that he would consider retirement an option.

With Borland we have a very unique case. Borland wasn’t injured. He wasn’t a veteran. He hadn’t been traded/drafted by a team he refused to play for. He decided that the risk of playing in the NFL was not worth the potential financial reward.

I think there are many reasons that a player who expressed interest in the NFL would change his mind the way Borland did. The 49ers were not exactly the ideal location for any player in 2014. He looked around him and saw guys injured. The organization was in disarray with a head coach being pushed out the door, a QB under heavy scrutiny, and a player being kicked off the team for a domestic issue off the field. He played with the greatest linebacker of the last decade, who himself decide it wasn’t worth it anymore just a few days before. He still would have to play at least two more years  before there was any significant financial reward. These things can quickly change the view of being in the NFL after actually experiencing it.

But regardless of why he chose to do it or if it was some grand gesture on his part, the 49ers should strongly consider going after his salary. There is precedent that is going to be set with this case. While Borland received a very modest (by NFL standards) signing bonus of $617,436, we should not get caught up in the amount of the bonus. What if Jedeveon Clowney, who struggled with injuries and had questions surface about his play, decided to retire after one year after receiving a $14,518,544 signing bonus? Not only is there the opportunity cost lost to the team but this would be a major financial loss. While the numbers are dramatically different the approach should be the same.

This is the same kind of logic that has forced the NFL Players Association to fight for the salary of Aaron Hernandez, who is likely going to be convicted of murder.  It has forced them to defend Ray Rice and Adrian Peterson. While many people look down on it they are doing it because they need to do it for the benefit of the other 2,000 or so player who play in the NFL. For as bad as it may look to to try to obtain nearly $4 million for Hernandez to likely use on lawyers, had they not acted on his behalf the NFL could potentialy throw aside contractual guarantees for a number of reasons.

The NFL has to protect the interest of the teams in this case while also protecting the contract structures of future draft picks. If Borland’s decision becomes considered acceptable around the NFL, teams will no longer be willing to use the signing bonus as a large first year payment for the player.  Instead they will increase yearly salaries and guarantee the compensation in order to protect it from being paid in the event of early retirement. That defers the time it will take for a player to earn his actual salary which is certainly not good for the players.

The 49ers are entitled to 463,077 of Borland’s salary, which is 3/4 of his signing bonus, if Borland does not reconsider his decision to retire. Recovering $155,468 of that money should be easy. That is the amount of Peformance Based Pay that was earned by Borland for 2014. The 49ers will simply withhold that payment as a form of recovery. The other $307K will need to be turned over by the player unless there is any other cash witholding in the possession of the 49ers.

  • McGeorge

    >>But regardless of why he chose to do it or if it was some grand gesture on his part, the 49ers should strongly consider going after his salary. There is precedent that is going to be set with this case.

    Consider this – What if Chris Borland’s advisers told him that. SO he doesn’t retire he just “doesn’t play hard” Not obviously bad, just missing a key play once or twice a game that results in a TD. That’s hard to prove. “I took a wrong angle”. “I missed the tackle because I was off balance from shifting direction”. Etc.

    The team is better off if he doesn’t want to be there. Going after him would also set a precedent. “Don’t retire, play bad and get cut”. Not what you want on a team sport.

  • Peter Noakes

    I can see a team going after salary where a player doesn’t honour his contract by not being in shape.drug abuse,or criminal activity or a number of other factors but Borland by all accounts played very well last year so there isn’t any questions about him earning his rookie salary and his performance based pay – which by my understanding is a league based pay -because he has already earned this money by what he did LAST YEAR.
    A Signing bonus is really a one shot bonus that is really just spread out over the life of the contract as a loophole by teams to lessen their salary cap hit – it is just a mechanism that allows NFL teams to pay players without taking the full hit at the time they are paid.
    The signing bonus is not given for the player signing a 3/4/5 year contract but for just signing and then allowing teams to lessen the cap hit because this money gets spread out unlike yearly salaries.
    If his NFL team wants some of their signing bonus back then they should have made it into a roster bonus instead -thats what a roster bonus is – a bonus for being on the roster whereas a signing bonus is for signing.

    • MattR

      OTOH, the team can argue that the signing bonus was for signing the contract and agreeing to its terms, which includes playing for the full length of the deal. IMO, an NFL signing bonus can be some combination of two categories – salary that is being called a signing bonus for cap purposes and a bonus designed to entice the player to sign the contract by paying them extra in the first year. I believe the team should have the right to recoup the latter money in most circumstances. And I would hope that agents insist on language that would protect the money in the former category (ie. I assume that when Patrick Willis and Justin Smith renogiated their contracts to convert salary into a signing bonus to give the 49ers cap relief, their agents made sure that there was no forfeiture language associated with those signing bonuses)

      • Peter Noakes

        interesting point regarding Willis and Smith’s reworked contracts.
        I just think that the 2 reasons a team signs/hands out a signing bonus is to entice a player -that player is a vet and the bonus is an allure used during free agency and to allow a team a loophole around being stung for a larger cap hit.

      • David J. Kubik

        I kind of agree with you about the signing bonus. It all depends on how the contract is written. In Borlands case the salary escalation isn’t that steep. So, I would say that the sining bonus should not be protected, because the signing bonus wasn’t given for cap purposes. For a guy like Jimmy Graham, who receive a big signing bonus for cap purposes to replace salary then he should be given the bonus money. When it comes down to it, Borland did not fulfill his contract.

  • MattR

    I thought injury was generally an exception to the retirement clause. The CBA says forfeiture applies to a player who “voluntarily retires” and I cannot remember a team ever going after the signing bonus of a player who retired due to injury. Whether or not Borland’s retirement would qualify is a different matter that will probably have to be decide by an arbitrator if the 49ers try to pursue the bonus money.

    Additionally, while the 49ers can demand the full amount of the signing bonus be repaid at this time, they are only entitled to receive this year’s portion ($154,359) this year (Borland can choose to repay the rest with 2 additional, equal payments on June 1, 2016 and 2017).

  • eddiea

    We know why Willis retired (injuries). We know why Smith might (injuries/age). In each case 49ers, most likely won’t ask for repayment. With Borland, imo, if he had just retired/quit we wouldn’t be having this convo. But, he said he did this b/c he might get CTE. If he was afraid of this he shouldn’t have ever been an NFL player or accepted the signing bonus which is to be repaid if contract isn’t fulfilled, do to player action. It would be nice if 49ers didn’t ask for it back but dead money is bad for teams.

    • McGeorge

      >>. But, he said he did this b/c he might get CTE. If he was afraid of this he shouldn’t have ever been an NFL player or accepted the signing bonus which is to be repaid if contract isn’t fulfilled,

      He’s probably been playing football for 15 years. CTE has been in the news the last several years. It may have taken a while to sink into him, especially as he’s new to the NFL.

      Anytime something is “new” and not completely proven, it takes a while to accept it.
      By not completely proven I mean that it’s not like a guy gets a few concussions and he’s immediately acting weird. It takes a while and is proven with long term studies.

      Football is the only sport I follow and I don’t want it to end. Good thing there are less educated poor people to keep on playing it for my entertainment 🙂
      God bless them. If only the US could get football to increase in popularity so we could get kids from other countries, and play football for me to watch, and then go home with brain damage.
      In all seriousness, I can see football losing kids, as parents wouldn’t want their kids to play. I wouldn’t want my kids to play football.

  • Drew

    Love this discussion. If I were the 49ers I would not expect to collect any of the bonus as the signing bonus’ main distinction from a roster bonus is that it is earned at signed, not at specified dates the player is on the roster. If the 49ers held on to his Performace Based Pay, I am sure that Borland could successfully collect that as well as that money was earned during 2014 and is paid out in 2015.

    My question is this: What if Borland un-retires in 2016? Can he sign anywhere? Is his contract with the 49ers over once he submits his retirement papers? Or would he go back to the 49ers on his rookie deal? I am not 100% sure how that would work but it would be interesting considering that his free agency value would be enormous after the season he had last year. I would imagine he have made more after 4 years via that route than if he simply played out his 4 year rookie deal.

    • MattR

      I am not really certain about this, but I believe the 49ers have a couple options. They can release him now and take the cap hit this year (or wait until June 1 to split the dead money hit across two years). I think Borland would then be subject to waivers but I am not really sure how that would work since it is the offseason and because he has retired. But more likely, the 49ers will put him on the Reserve/Retired list. If I understand that correctly, they can keep him on that list for the length of his contract and maintain his rights for that entire period. Each year, they would take a cap hit for that year’s portion of his prorated signing bonus. (If they are able to recover signing bonus money, he is responsible for paying it back in yearly installments and the team receives a cap credit the next year for the amount repaid) If Borland decides to return, the team can choose to take him back for the remaining portion of his contract (without him having to pay back any more of his signing bonus) or release him (while retaining the option of going after any remaining prorated portions of his signing bonus).

      IMO, it doesn’t make much sense for the 49ers to relinquish his rights before they have to. In the worst case, he may have some trade value if he decides to come back in a year or two.