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SBJ/May 12 - 18, 2003/Labor Agents
Agents: ‘Flat’ bonus hurts rookie class
Published May 12, 2003
No. 1 NFL draft pick Carson Palmer's $49 million, six-year contract with the Cincinnati Bengals may be record-setting, but it may also signal a flat year for compensation for all NFL rookies, agents said.
Some agents are grumbling that Palmer's combined signing and option bonus of $14.01 million is only $10,000 more than last year's No. 1 pick, Houston Texans quarterback David Carr. Carr's signing and option bonus of $14 million, which was guaranteed, was $3 million, or 27 percent higher, than that of Atlanta Falcons quarterback Michael Vick, the No. 1 pick the year before.
"It hurts everybody," said one football agent, who asked not to be named. "When you have the first pick, the whole draft negotiates off the first pick. It sets the tone."
Another agent said he expected Palmer's signing and option bonus to be about $16 million, based on Carr's increase over Vick's deal.
Still another said he expected guaranteed money of at least $15 million, adding, "You expect progress, and you really didn't get any here."
But Mark Humenik, general counsel for Athletes First, whose CEO, David Dunn, negotiated Palmer's deal, bristled at the notion that the Palmer deal is flat.
"That is ludicrous," he said. "The total value of Palmer's deal in the first three years is $2 million more [than Carr's]."
Palmer can earn $18.25 million in the first three years if he participates in 35 percent of the plays during his rookie year with the Bengals, or 45 percent in his second year with the team.
Carr can earn $18.25 million in his first three years too, but he must hit a much more difficult target to do so — either being a top-five quarterback in one of five performance categories or being chosen for the Pro Bowl. If Carr does not hit one of those targets in the 2003 season, his three-year total compensation will be $16.25 million.
Humenik also noted that Palmer's deal is "front loaded," so that he gets his signing bonus much earlier. "Palmer will have in his pocket at the end of the first league year $11.08 million," Humenik said, adding that that's a 91 percent increase in cash flow over Carr's first-year deal. "In fact, Carr doesn't even reach $11.08 million in cash flow until the end of his second year."
Palmer's agent Dunn had to wrestle with the problem of a flat rookie pool when negotiating the quarterback's contract this year. But agents noted that most of the first-round draft picks last year, including Carr, got increases in guaranteed money and the rookie pool was flat last year as well.
Mike Sullivan, director of Octagon Football, which represented Carr and Vick, did not return repeated phone calls for this story.
But other agents noted that while Palmer may have much easier escalator targets on the front end of his deal, Carr's escalators on the back end are slightly easier to hit than Palmer's.
Carr can earn $7.75 million in additional salary in the last few years of his contract if he is rated one of the top five NFL quarterbacks in one of five categories: passing yards, touchdown passes, completion percentage, passing rating or interception percentage. If Carr doesn't hit any of those five categories, he can also earn that $7.75 million if he makes the Pro Bowl each year in the last five years of his contract.
But while Carr has six chances to earn a bonus that ranges from $1 million to $2 million annually in those last five years, Palmer has only three chances to earn an extra $1.25 million a year in the last four years of his deal.
Palmer must be one of the top quarterbacks in the league in one of three categories each year to get his $5 million. Those categories are total passing yards, touchdown passes and completion percentage.
But Humenik said an analysis showed that Carr's three more chances to earn his top quarterback incentives is not a big advantage.
Humenik said that if neither Carr or Palmer hit their top-five-quarterback incentive targets, Carr will earn $37.5 million over six years and Palmer will earn $40 million over six years.
Still, that kind of increase, wasn't enough for some agents.
"It's flat guaranteed money," said one agent. "If you are the GM of a team and you have a high draft choice, you will say, 'Look at the numbers, it's a flat deal. So we are going to give you the same deal that the guy [with the same draft position] got last year. And you can't say no.'"