Contract Lessons Learned From Myles Garrett’s Suspension

The big NFL news of the day centered around a crazy ending in Thursday night’s football game where a brawl broke out in the final seconds when Browns defensive end Myles Garrett hit Steelers quarterback Mason Rudolph with Rudolph’s football helmet. Garrett was suspended for a minimum of 6 games and it is a costly suspension- $1,139,912 to be exact- and possibly more if the Browns also go after $1.787 million in bonus money, though I highly doubt the Browns will do that. It was as dirty a play as I can recall and certainly right up there with Albert Haynesworth’s head stomp of Andre Gurode back in 2008. While Garrett deserves the max penalties here this is a good learning example for those looking to work as a sports agent or negotiate contracts on the team end because the structure of Garrett’s contract will ultimately cost him more money because of the suspension.

NFL contracts are made up of various components. You can read all about those in Crunching Numbers (on sale on Amazon, yes I know a shameless plug) but for 1st round rookies the majority of contracts come down to three elements- Paragraph 5 salary (base salary as we call it on OTC), an August roster bonus, and a signing bonus. The total amount isn’t in question but the way that the deals are divided up generally in and in particular the split between roster bonuses and P5 salary.

Many rookies in the NFL are able to negotiate contracts that typically break down as follows- a large signing bonus that is dictated by the CBA’s slotted salary system, minimum P5 salaries each season, and a larger roster bonus in the final three contract years that is earned in August to reach the maximum year over year raise allowed by the CBA. Though the contracts are going to be worth the same amount of money no matter how it is broken down there is one important consideration.

When a player is suspended by the NFL or the team every week’s salary is forfeited for games missed. Roster bonuses are not. That forfeiture calculation is entirely different and it is also not mandatory except in the case of a PED violation where typically they are. The difference can be costly. Lets look at how Garrett would have fared had he negotiated a more favorable contract structure.

Component Salary Max forfeiture Min Forfeiture
Paragraph 5 $645,000 $227,647 $227,647
Roster Bonus $2,584,750 $456,132 $0
TOTALS $3,229,750 $683,779 $227,647

So at a minimum Garrett’s contract structure cost him $456,133 and more likely $912,265.  Again none of this is to condone Garrett’s actions just that when people look at rookie contracts as a nothing issue sometimes they don’t fully protect the player as well as they could be protected.

So how uncommon is Garrett’s structure?  Well we can go back and look at the data to see. This contract structure more or less was invented in 2012 in what I called “the Tannehill compromise” so let’s use 2013 as a starting point and see how many top 5 and top 10 picks used the “Tannehill compromise” structure rather than the standard one Garrett used.

Year Top 5 Top 10
2013 60.0% 70.0%
2014 60.0% 50.0%
2015 80.0% 50.0%
2016 40.0% 50.0%
2017 40.0% 50.0%
2018 100.0% 100.0%
2019 80.0% 60.0%
AVG 65.7% 61.4%

While not incredibly uncommon Garrett certainly was in the minority here. It is also worth noting that a larger portion of top 5 players did get the more player friendly structure in the first three years of their contract but not the fourth.

Garrett is also only the second first overall selection since 2013 to not get the favorable structure. I would imagine that this happened because the prior year Jared Goff also took a less favorable structure from the Rams. The reason for this was because the majority of the considerations here really deal with offsets on guarantees and the Rams always give their top picks a “no offset” clause on all guarantees. So I would imagine the Browns leaned on that with Garrett but did not have the same luck the next year with Baker Mayfield.

I heard on ESPN radio this morning the hosts (I cant recall who but I think it was Mike and Mike Jr on the discussion) kind of focusing on voiding of guarantees but who cares about that. If Garrett was a bad player that would be an issue. He isn’t and guarantees mean nothing for good players because they are not getting cut.  For them its just words on a piece of paper and they don’t get to have those words there any more. So yes he will lose his guarantee in 2020 but it’s meaningless.

So in the end it’s a small thing but small things can be costly. And this should not just be something heeded by people representing top draft picks. There has been a movement in recent years to raise P5s very high while reducing signing bonuses and to a lesser extent offseason roster bonuses. For players the less you have in the P5 the less risk you have from situations like this. Get as much money as you can in up front bonuses- either signing or roster- and you should be more protected.