Saturday, May 28, 2022

NFL insider notes: Deshaun Watson’s game-changing deal and its ramifications hottest topic at owner’s meetings

WEST PALM BEACH, Florida – The Deshaun Watson trade and subsequent contract extension continue to send shockwaves around the league, and it will, unquestionably, be the primary topic of all informal discussion at the NFL‘s owner’s meetings this week here in West Palm Beach.

There won’t be anything on the formal agenda about it, but, trust me, the entire league (team presidents, owners, general managers) is still buzzing about the unprecedented contract, and all of the angst, turmoil and tumult it will cause for other organizations moving forward. Dee and Jimmy Haslem, with one negotiation, created a bold new horizon in terms of player compensation that may transform the way NFL players are paid to an extent that nothing previously has.

It is a complete and utter game-changer. And the rest of the league, by and large, is not happy about it.

For a player in this much peril, facing suspension for allegations of sexual assault and sexual misconduct – with 22 civil cases still pending – to receive an $11 million a year raise, landing a fully guaranteed $230M contract without ever signing an autograph or doing a public appearance for the Browns, let alone playing a down, is staggering. The reality moving on is that, immediately, every quarterback of any distinction will be seeking no-trade language and fully guaranteed contracts, whether they be three years in length or seven. It is now the new norm that all agents will seek.

Make no mistake, the business of football – for now, at the highest price-points for QBs; eventually for other positions as well – has changed forever. There is no going back now … not for Haslam, not for any owner. I was chatting about this with longtime NFL team president Joe Banner over the weekend, and on top of all of the already-noted consequences of this contract, he pointed out another I hadn’t been focused on: the NFL’s regulations for funding fully guaranteed contracts.

Per current league rules, all future fully guaranteed money due in a player contract must be placed in escrow at the time the deal is consummated. It’s antiquated and has long been a bone of contention for the NFLPA. It was implemented long before the NFL became the 365-days-a-year revenue and content monster it is now, and it was put in place on the surface to prevent a team from defaulting on a contract to a player. Yeah, quaint, ain’t it? Those days are long gone, but for decades many owners have hidden behind it as an excuse as to why they wouldn’t guarantee more than a year or two. I can’t go around putting $50M, $60M, $100M, in escrow every time someone wants a fully guaranteed deal. Only, well, Haslam just put about $185M in escrow to make good on what he still owes Watson beyond 2022 (and he did so by also only putting $1M in the QB’s base salary to limit any financial damage to him by an upcoming suspension).

So, yeah, that’s over.

Either other owners are going to step up like he did, or suddenly these billionaires are going to decide that the union was right all along, and these escrow accounts are a silly idea from a bygone time and let’s do away with that! Because the cost of doing business for top starting quarterbacks is now $45-$50M a year, fully guaranteed, and Lamar Jackson, Kyler Murray and Russell Wilson will be the next three to benefit from this paradigm shift. The first two will either get similar structure and language in extensions with their current teams or will end up dealt to an owner who will provide it; the Broncos are locked into doing as much with Wilson after just trading a haul of picks and players to land him with just two years left on his outdated contract.

This Watson deal may have just drawn another delineation between the wealthy and the uber-wealthy within the ownership group. Or those willing to spend like the Haslams, and those who will not embrace the reality of five-year, $250M fully guaranteed deals. Like it or not, this Watson deal has ushered the NFL into the kind of financial outlays that have long been the norm in the NBA and MLB. If Watson got this, under these dire personal circumstances, how long until the NFL gets its first $300M (fully guaranteed) man? It’s suddenly much closer than anyone would have dreamt 10 days ago. What does this mean for guys like Bengals owner Mike Brown and Chargers owner Dean Spanos, who haven’t been known as notoriously heavy spenders but have extension talks with Joe Burrow and Justin Herbert looming in less than a year?

“In this case, next March 1, the Browns are going to have to deposit I believe the number is close to $180M in what amounts to an escrow account, where the guaranteed money gets held that is owed to the player in the future,” Banner told me during a discussion on Inside Access on 1057 The Fan in Baltimore. “… Not when you think about a quarterback like Lamar Jackson in a market like Baltimore, or a (Joe) Burrow in Cincinnati or (Justin Herbert) in LA, but what really in terms of economics is the San Diego team, I don’t know if those owners are going to be in a position to put $140M, $150M, $180M into an escrow account nine months from now. I’m not sure that’s something all teams can do.”

In the interim, if Steve Bisciotti (Ravens) or Michael Bidwell (Cardinals) don’t think operating like this is good business, then it only takes one other owner who isn’t fearing this sudden sticker shock to find a suitor. Find two, and you have a robust trade market. Panthers owner David Tepper’s desperate pursuit of QB help is well documented, Arthur Blank was willing to pay top QB compensation to Matt Ryan for the duration of his time in Atlanta, and Seattle has never feared a big payroll and suddenly has a need at QB, too.

“This is actually a huge advantage to high revenue, high profit teams, and a huge disadvantage to the smaller-market teams,” Banner said. “And I suspect the league will do something about this. Maybe not affecting Deshaun but going forward, because I know they get accused of greed when it comes to this and I’m not going to fight them on it, but this rule comes down to competitive balance, which they really, really do care about.

“They think it’s what has made the league successful and profitable, so they won’t want to leave it in a situation where the Cincinnatis and Baltimores of the world may be at a competitive disadvantage because of the structure of this deal. So I’m looking forward to seeing how they address that, because I don’t think there is any chance they don’t address it in some way. And in the meantime, the Baltimores of the world are in a much more difficult situation than they were previously in terms of trying to re-sign these guys. The number goes higher. The guarantee goes higher, but so do some of these behind-the-scenes kind of nuanced issues that the public may not see that often. They’re going to have a huge impact on places like Baltimore.”

 This will be the discussions going on as owners eat lunch and dine together. It will be what’s whispered in hallways. It very well could lead to meaningful trade talks in realtime, given the sweeping blockbusters that have already taken the league by storm so early in this offseason. The stakes have been raised, exponentially, and the ramifications have only just begun.

All eyes on sale of Broncos

One of the items other owners are most interested to glean from these meetings are updates on the sale of the Broncos. It’s been clear for years that in 2022 this team was going to go to market, and there has been plenty of vetting already done behind the scenes. This was no surprise.

The closer this price goes to $4 billion, the happier these billionaires will be. For a multitude of reasons. If it approaches that number, many in league circles believe it will prompt other owners who have been sitting on the sidelines to begin to elicit purchase invites for their franchise. Post-pandemic (for now at least), with the business of football booming and with more sponsorship and broadcast deals (Sunday Ticket) and gambling revenue still to come, and the game growing internationally now beyond just the United Kingdom, there are dollar signs in the eyes of many owners.

The Seahawks will only stay in the Allen family for so long. Saints owner Gayle Benson has already announced she will sell that team at some point. There are plenty of rumblings about other owners not being as enthralled with ownership as they once were, and eyeing 2022/2023 as the opportunity time to cash out. For now, all eyes remain on Denver, and a transaction that several league sources believe will be complete by October. Perhaps even sooner.

Tweaking OT rules 

These meetings are devoid of the type of juicy on-field rule proposals that we have seen in the recent past. Much of the focus this week will be on tweaking overtime.

Based on initial conversations, I don’t get the sense that the proposal to incorporate two-point conversions into the process (a team that wins the coin toss and produces eight points on the opening drive then ends the game) has all that much traction. If a change is made, I’d expect it to be one that stipulates that both teams get a chance to possess the ball in the overtime period. But I’m not certain that has enough momentum, either.

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