The National Football League (NFL) is facing significant pressure on ending exclusive contract guarantees. This all comes on the heels of a recent arbitration ruling which discovered no collusion between teams on the issue of fully guaranteed player contracts. As many readers will remember, the NFL Players Association (NFLPA) lodged a grievance in 2022. Specifically, they alleged that league executives and member teams were knowingly attempting to reduce or restrict contracts. It is because of the massive publicity that surrounded this case when Deshaun Watson signed his fully guaranteed, record-setting contract with the Cleveland Browns.
The arbitration hearing was a ten-day spectacle in July and August of 2024. It was filled with testimonies from a number of NFL owners, including Robert Kraft (New England Patriots), John Mara (New York Giants), and Michael Bidwill (Arizona Cardinals). NFL Commissioner Roger Goodell testified, denying the charge of collusion between the teams.
Further, the NFL’s labor relations council presented a 20 minute seminar to team owners throughout the process. They wanted to point out a major trend in the direction of bigger guarantees in player contracts. This graph from the presentation was particularly eye-opening. It uncovered a stunning 92% surge over the past three years in the share of players getting signing bonuses and salary guarantees. Using just this data, some team executives have worried that this could spell disaster for roster management in future seasons.
On March 20, 2022, NFL executive vice president and general counsel Jeff Pash emailed Goodell. He briefed him on management council’s work to shape that presentation for the next go-round. Goodell’s response expressed urgency: “the tip of the market is most of the dollars and if we wait to see how it falls, it will be too late to counter.” This feeling mirrored worries that increasing guarantees in this way would establish a harmful standard for future contract negotiations.
In January, Christopher Droney, the arbiter of the case, issued his decision. He concluded that the evidence wholly failed to establish any collusion among the NFL clubs. He brought forth very clear, direct, irrefutable evidence, including emails and PowerPoint presentation slides from league officials. Surprisingly, this proof fulfilled only one of the three factors required to prove collusion. Droney remarked, “There is little question that the NFL Management Council, with the blessing of the commissioner, encouraged the 32 NFL clubs to reduce guarantees in veterans’ contracts at the March 2022 annual owners meeting.”
As we’ve detailed in this blog, the implications of this ruling ripple far beyond contractual negotiations. Baltimore Ravens quarterback Lamar Jackson wanted a fully guaranteed contract. If that’s not enough, he turned down two multi-year offers for three-year pacts that were offered to him. The Ravens put a franchise tag on him to hold his rights. Then they signed him to a five-year contract that was not fully guaranteed. The same thing happened with all of the other quarterbacks. Russell Wilson’s recent extension with the Denver Broncos is a good example, even though it didn’t have full guarantees.
For example, Kyler Murray’s agent, Erik Burkhardt, made the need for a fully guaranteed contract a core part of Murray’s negotiations. This focus was largely in reaction to Watson’s recently inked contract. In addition to his grand plan, Bidwill agreed to touch base with the Spanos family. They went into detail about the particulars of Murray’s contract and its implications for future negotiations with Chargers quarterback Justin Herbert.
Contract guarantees aren’t just a worry about financial unpredictability at the whim of NFL executives. Pash noted the need to better assess whether large guarantees are extending into free agency pools: “a better sense of whether the large guarantees are extending further into the free agent pool.” He continued that this topic will need additional discussion block by block in football operations meetings and with team owners.
While the former champions won some minds with worries about the proliferation of guarantees killing roster speculation and roster construction, other team execs seemed more sanguine. Bidwill commented on the situation: “I think many teams will be happy with it once they have a chance to review. Cleveland really screwed things up, but I was resolved to keep the guaranteed relatively ‘low.’”
Mara voiced skepticism regarding any collaborative efforts among teams to limit guarantees, stating, “Just the thought of me calling Jerry Jones or somebody and asking him not to guarantee [Dak Prescott]’s contract or somebody else’s contract — I mean, he would laugh at me, among other choice words, I’m sure.”
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