It’s a good time to be an in-demand NFL player, as record spending is making the league’s top free agents richer than ever. As of Tuesday, NFL teams had spent $1.9 billion on unrestricted targets through the first six days of free agency, with $922 million of that guaranteed. Last spring, teams spent $1 billion guaranteed over six weeks. For valuable players hitting the market at the right moment, big deals are the new normal.
For everyone else, though, settling is. The rising salary cap, which sits at $167 million for the 2017 season — up $12 million from last year and $47 million from 2011, the first season of the league’s current collective bargaining agreement — has altered spending patterns in the NFL. And though earnings are rising for the top free agents, a confluence of events has caused them to shrink for those lower on rosters, eradicating the NFL’s middle class and costing its lower tier much of its leverage.
Larger training camp and practice squad rosters mean more players competing for spots on the active roster, robbing those on the fringes of true bargaining power. The rookie wage scale, introduced in 2011 to theoretically push more money toward veterans, has actually hurt aging nonstars, who wind up negotiating below-market deals based on their low initial salaries. And of course, NFL teams remain self-interested even amid the rising cap, reducing their own financial burden using little-known, widely implemented mechanisms like split contracts and per-game roster bonuses.
It wasn’t supposed to be like this. "The goal of [the 2011 CBA] was to give more money to the middle class," says Mark Dominik, a former Tampa Bay Buccaneers general manager, who’s now an analyst for ESPN. "Instead, what happened was teams rewarded star players, and it created a cavernous pit between types of contracts. It’s a have-and-have-not league."
NFL teams have always considered lower-rung players disposable. Now, however, franchises have become expert at stacking the deck against those with the least leverage, further splitting rosters into two clusters with vastly different circumstances.
"We’re in a challenging time," says Rams general manager Les Snead. "I’ve heard [former Colts executive] Bill Polian talk about the concept of ‘monetary dysfunction,’ where you have problems in the locker room because guys are saying, ‘Hey, why is this guy getting this money?’ … The market used to be outdated annually; now it’s outdated on a player-by-player basis. The paradigm shifts constantly. … There’s going to be a natural jealousy."
During the 2015 season, Ronnie Hillman led the Super Bowl champion Denver Broncos in rushing yards and touchdowns. At training camp seven months later, the Broncos, flush with running backs, released Hillman from the $2 million contract they’d signed him to earlier in 2016. Instead of resuming his role as Denver’s lead back, Hillman had to face the open market a week before the season began. Absent his leverage, he signed a league-minimum deal with the Minnesota Vikings two weeks into the season worth a prorated $760,000 and featuring what is called an "injury split," which would cost him hundreds of thousands of dollars if he wound up on injured reserve.
As guaranteed money has risen for the NFL’s haves, split contracts have become increasingly prominent for the have-nots. These deals put the risk almost entirely on the player by not guaranteeing the full amount of money unless he stays healthy all season. For example, Donald Brown’s deal with the Patriots last season called for $965,000 total, but a prorated drop to $453,000 if Brown hit IR. This mechanism used to be reserved for late-round draft picks and veterans with extensive injury histories. But according to multiple NFL team executives, over the past few seasons splits and other similarly pro-team, anti-player contract clauses like per-game bonuses have started to creep into more veteran deals than ever before. Nick Greisen, a former NFL player who now sells injury insurance to NFL players, estimates that players leaguewide lost $28 million in salary due to these injury clauses in 2015, up from $19 million in 2013 and $23 million in 2014.
"[Teams] are going to try to keep their money in their pockets as much as possible," Hillman says. "The league is cheap, man. And you kind of learn they don’t really take care of you like that." Hillman, who was placed on waivers by the Vikings and picked up by the Chargers in November, says he signed his split contract because "I knew I wasn’t going to get hurt," but also says he feels for the growing group of players facing slanted negotiations. Hillman believes that the CBA should include more provisions to protect veterans and laments how quickly players are flushed out of the league if they find themselves off a roster for even a moment. "There are lots of things you’d want to change about the CBA," Hillman says. "But for me, it’s definitely how they handle players out of the league, trying to get another [team]. I can’t complain about that because I got picked up, but just hearing how other players struggle to get back in, or look to the [National Football League Players Association] for help, it just sucks to see your friends go through it." (The Vikings declined to comment.)
Since the cap started rising, NFL teams have performed a master class in reducing their own financial risk at the expense of lower-earning players. In addition to identifying the proliferation of injury splits, people inside the NFL — from team executives to agents — point to the growing number of contracts built in part on per-game bonuses, which stem from being on the active roster, meaning that to get their maximum salary each week, a player must be on the 46-man game-day roster, not just the 53-man overall roster. Greisen says his data shows that players lost $20 million leaguewide in 2016 due to per-game bonuses.
According to former agent and salary cap analyst Joel Corry, teams started to sparingly insert per-game bonuses for oft-injured players around 2001. The clause spread slowly. In 2006, Andrew Brandt, then the vice president and head negotiator for the Green Bay Packers and now an analyst for ESPN, inserted per-game bonuses into contracts for running back Ahman Green, who’d dealt with injuries, and defensive back Charles Woodson, the former Raiders star who hadn’t played a full season in his last four years in Oakland. Woodson got healthy and regained superstar status in Green Bay, which helped the clause gain popularity.
"NFL contracts allocate the most risk to the player of any sport," says Brandt. "And like any business, once you have a policy — and we liked [these bonuses] — it was easier to point to other players and say, ‘Hey, our star, Charles Woodson, did this,’ and then you start to make it look like every player has it. It was something that was fortuitous, that a couple guys [coming] off injury signed it, when it seemed so antithetical to everything [players would sign], but then it became universal."
Now, the clauses are a staple in a copycat league full of teams eager to protect their interests and control costs. Colin Kaepernick’s 2015 deal, for instance, included up to $2 million in per-game payments; he lost $875,000 when he went on injured reserve that year. Robert Griffin III stood to gain $750,000 in per-game bonuses last season with Cleveland, but played just five times due to a shoulder injury and earned just over $200,000 in bonuses instead. Jason Fitzgerald, who founded the website Over the Cap and has consulted for half a dozen NFL teams, says these bonus clauses are a way for teams to gain an edge on players who won’t agree to a split contract. He cited Green Bay’s Jordy Nelson, who has suffered injuries but is valuable enough to dodge the split language historically reserved for bottom-of-the-roster players. Instead, Fitzgerald says, Nelson took $500,000 of his contract per year in per-game form.
"As an agent I hated those things with a passion, because a lot of things can cost players money," says Corry. "Things like if late in the season, when a team has clinched a playoff berth, they want to rest starters and make a guy inactive, then you’re costing the guy money. But you’re seeing those deals a lot more."
Different people trace different paths to today’s haves-and-have-nots league. The 2011 CBA — the decade’s most argued-over collection of pages this side of Jonathan Franzen — certainly shaped the larger football labor market, but it doesn’t come close to explaining everything. George Atallah, the NFL Players Association’s assistant executive director of external affairs, says the league’s distinct classes are the teams’ doing. "The things we are seeing are not a function of the system," Atallah says, "they are a function of how teams behave."
In fact, Atallah says, in many ways the CBA is working as hoped: During negotiations, the union’s goals were to maximize players’ share of the league’s revenue and make as much money as possible available to free agents. Atallah mentions that the percentage of guaranteed money has risen from just under 50 percent before the latest CBA to around 65 percent now. But he notes that teams’ insistence on putting bad language in deals is problematic, saying that the union’s job at this time of year has shifted to advising agents on the kind of contract clauses to watch for and fight against.
And that language is pervasive: Brandt notes that in the same way coaches crib schemes from others, copycat front offices mimic the contract negotiations occurring elsewhere. When teams gather at the annual meetings, the league’s management council (a group of owners and team executives) often discusses contract structures. "They are careful not to recommend, ‘This team is doing this or that,’ but they’ll show you examples of language and what teams are doing, and you learn best practices," Brandt says, adding that the presenters are careful not to even imply that teams should collude. Most of the talk in these meetings, Brandt says, focuses on themes like splits or voiding certain guarantees under extenuating circumstances, such as suspensions or off-field problems.
Brandt traces part of the have-nots’ decreased leverage to the rookie salary scale, which prohibits players from negotiating a new deal for the first three years of their contract. While that pushes more money to veterans as intended, it does so only in some cases, as this year’s notable free agents are discovering. The scale also depresses the value of some second contracts, since teams are negotiating extensions with players who are still on heavily cost-controlled deals. "You get to say, ‘You can take the offer we’re putting in front of you or you can play another season for a million dollars,’" Brandt says. "It takes a very, very special player to turn down an extension in their fourth year, because the rookie contracts are so low." As such, the pool of players who hit the open market at a peak time is remarkably low, because true superstars typically get locked into below-market deals a year early, or find themselves playing on franchise tags.
Joe Banner, a former Eagles and Browns executive, says he’s shocked by how many players are willing to take deals that are based on old contracts, especially with the rising cap increasing teams’ spending. "I’m baffled by the two distinctly different worlds," Banner says. "There are two markets — the players who re-sign off old deals and players who let the market value them. We have seen instances where the gap is so large that it’s hard to believe that that’s the best they could have done." This, he says, is part of the problem in the NFL: Players who should have leverage are signing deals well below what’s warranted due to the "perceived risk" (potential injury and declining play, among others) of not signing as soon as possible.
And that’s how the NFL split into two classes.
Fitzgerald paints a grim picture of a league in which teams are getting even craftier at gaining leverage over lesser players and exploiting them in deals. He points to the ripple effect caused by one little-known clause in the CBA: If a player on a multiyear contract is injured for the last game of a season, 50 percent of the money he’s owed (up to $1 million) the following season becomes guaranteed, even if he can’t play that year or was otherwise not going to make the team. To avoid that penalty, Fitzgerald says teams are trending toward more one-year deals for bottom-of-the-roster players — another way injury-prone, aging players can find themselves sapped of bargaining power or out of the league.
"They are a monopoly," says Greisen, who has sold insurance policies against split contracts since the 2015 offseason. "And you’ve only got so many teams and thousands of players: It’s a supply-and-demand problem that goes on, and the teams have all the power." Greisen has insured more than 100 NFL players against incentives, including a total in the "mid 50s" specifically for splits. "These guys are going to sign a certain contract, certainly if you only have one offer — but even though you may have three offers, it could be a situation where every team is not willing to [take out] the split."
When it comes to analyzing team spending, former Oakland Raiders CEO Amy Trask references the old adage: Never attribute to malice that which is adequately explained by stupidity. She doesn’t think the league’s financial inequality is a function of the cap; rather, she believes that some teams just don’t have the cash to give to players, or have banking arrangements that prevent them from spending too much in a given year.
"I think that people who point to the cap as the reason are using the cap as a lazy convenience," Trask says. "I think there could be different distributions of wealth, there could be a different method of [having an NFL middle class]. But people just say ‘The cap, the cap, the cap.’"
Few inside the sport see real change coming soon. "Teams use every opportunity to cry poverty," Fitzgerald says. "They’ll use anything and everything in order to say they don’t have the money to pay veterans." The current contract mechanisms seem firmly entrenched, and agents worry that unless players can find a way to gain leverage where seemingly none exists, the problems will persist and the player class gap will widen.
It’s great to be an NFL player these days — except when it’s not.
