Thoughts on Andre Johnson and the Lessons to be Learned from his Contract

Not unexpectedly Andre Johnson is expressing unhappiness with the Houston Texans according to Brian Smith of the Houston Chronicle. In the article Johnson questions whether Houston is the place for him to finish his career and stated he will not attend offseason activities.

At 32 years of age Johnson knows that his career is no longer rising and he is going to spend the declining years on what is a rebuilding team.  He can look around at older veterans like Reggie Wayne and Steve Smith and see the way their franchises played hardball with them and the lack of interest that may be on the market for aging players. This was his last opportunity to try to get a new deal to at least make it a financially strong reason to play his career out in Houston but the Texans looked to have turned down that idea leaving him unhappy on a team that looks to be looking towards the future rather than the present.

Johnson carries a salary cap charge in 2014 of $15,644,583 and a cash contract value of $11 million. If traded before June 1, Johnson’s cap charge for the Texans would be $11,964,166 representing a savings of $3,680,417 against the cap. If traded after June 1 the Texans would take a $4.644 million cap charge in 2014 and a $7.319 million charge in 2015. In either scenario the trade would help rather than hurt the Texans salary cap.

The more difficult aspect of the trade is to find a trade partner. Johnson has $34.5 million remaining on his contract, a huge number for a player that is about to turn 33 years old. While Johnson plays at a far higher level than his peers at that age, players like Anquan Boldin and Wes Welker are working for $6 million a season. To complicate matters Johnson would likely want an extension or some type of guarantee on his contract.

Only 12 potential destinations could absorb his $11 million salary without touching the contract. Of those 13 only the Bengals, Eagles, Packers , and Colts would be considered sure fire contenders and most of those squads are set at the WR position. Fringe playoff teams with the room would include the Jets, Dolphins, and Bills. Buffalo would certainly have no interest and Miami is already overspent at the position.

Johnson does risk money in a hold out. This was not the first time that Johnson had been unhappy with the Texans. Back in 2010 Johnson made it known he was unhappy with a contract extension that had multiple years left on it as lesser players began earning more money as the salary cap and importance of the wide receiver position grew. The Texans gave in that time, but in a very minimal way, which I’ll discuss below. To further protect themselves from a holdout threat they tied $250,000 in salary escalators and another $1 million in week 1 roster bonuses to offseason attendance.

There is no arguing the fact that Johnson has always been underpaid. He had been as productive as any of the top paid receivers in the NFL but never reached those financial thresholds. For players considering representing themselves in contract negotiations Johnson’s career should be studied closely and perhaps a warning sign for either not looking for an agent or at least consulting with someone well versed in the NFL contracts and the salary cap.

Johnson represented himself in 2007 when he signed a 6 year extension with the Texans. Johnson had two years remaining on his rookie contract at the time so this extension would take him to the age of 33, meaning it would be the only big contract of his career. Johnson had been scheduled to earn $15.7 million in the 2007 and 2008 seasons of his rookie contract and would have likely increased that number to $16.7 million via escalators.

In his negotiated extension he received a raise of just $3.325 million, none of which would be paid until 2008. He was guaranteed next to nothing and the contract structure was such that he never carried a cap hit in the extension years that would exceed $8.65 million. In addition the signing bonus was so small that he could have been released very quickly had he been injured or ineffective. For that tiny guarantee and raise he was locked in at a price of $7.468 million per year for the next 8 years.

The following season Larry Fitzgerald received a contract extension from the Arizona Cardinals that was worth $10 million a year and only added another two years onto Fitzgerald’s contract. Fitzgerald received $20 million in real guarantees and millions more in injury protection. Fitzgerald played on a better team and had better numbers but the contract terms were a major difference.

After back to back 1,500 yard seasons in 2008 and 2009, Johnson made it known he needed a new deal. The problem for Johnson was that the contract he negotiated for himself in 2007 was so bad that he had destroyed any leverage possible. This go around Johnson hired an agent but there is only so much that could be done. The Texans basically eased the situation adding another two years onto his contract to make him happy. In terms of base contract value Johnson only received a small raise. Originally set to earn $13 million in 2010 and 2011, Johnson would now earn $17 million, a $4 million raise. His 2012 through 2014 seasons remained identical.

Unlike other high end receivers Johnson’s contract contained escalator clauses that, if earned, would push his average contract value over the first five years of the deal to $50 million, thus matching Fitzgerald’s annual value of $10 million a season.  To reach the full numbers Johnson would be required to finish in the top 5 in any of a number of receiving categories. Johnson ended up earning all but $2.2 million of the escalators. In addition Johnson stood to lose at least $1 million a season in the 2012 to 2014 seasons if he held out his services.

While the contract did earn Johnson some added guarantees they paled in comparison to other players and Johnson could still have easily been released after the 2011 or 2012 seasons.  He was one of the best bargains in the NFL- a top quality player with almost no ability to hold out and playing under reasonable salary cap allocations. The Texans would make a mess of his contract over the years with constant restructures (his contract was reworked every year for cap relief), but the base deal was extremely team friendly.

While the deal would be a slight victory for Johnson it was short lived. Fitzgerald would put about 100 less receiving yards than Johnson in 2010 and 500 less yards than Johnson’s 2009 season he used as leverage for his contract, but would be rewarded with a monster contract in 2011 that averaged over $16 million a season with $45 million in various guarantees. Since that time Johnson has caught 21 more passes for 334 more yards than Fitzgerald. On a per game basis it’s no contest as Johnson averages 89.5 yards a game to just 66 yards a game for Fitzgerald. Despite that Johnson was paid just $36.8 million compared to $51.65 million for Fitzgerald from 2010 to 2013.

Since that time Johnson’s contract has been surpassed by the likes of Percy Harvin, Mike Wallace, and Dwayne Bowe, who have a total of five 1,000 yard seasons between the three of them. Johnson has seven. Of those seven, four are for more than 1,400 yards. It’s a travesty that Johnson has been paid the way he has, but these were mistakes or miscalculations that were made back in 2007 and more or less compromised his entire earning potential. Now he is left staring at a rebuilding team with no QB to throw him the ball. He knows odds are he’ll be released following the season but with the likes of Ryan Fitzpatrick throwing him the football his stats stand to suffer and as a 34 year old free agent teams are going to say that it was age related more than team related and he’ll finish his career as a bargain player for some other organization. He probably deserved better but the NFL is a tough business and players should beware of what one bad decision can do to your financial future.