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SBJ/20100823/This Week's News
Lockout fears prompt changes in rookie deals
Published August 23, 2010
The contracts of first-round NFL draft picks have changed this year to reflect a belief in the marketplace that there may be a lockout in 2011 and that it could potentially delay the start of the regular season, according to multiple sources.
Notably, the timing of when clubs will pay option bonuses has changed from the first two weeks of the league year, which begins in March, to around the time the first regular-season game is played in 2011, whenever that may be. Option bonuses, which give clubs the option to extend deals by another year and are paid to rookies in their second year in the league, have accounted for a significant portion of guaranteed money top NFL rookies have received in recent years.
Additionally, 25 of 32 first-round picks received signing bonuses this year versus 16 last year, according to the NFL Players Association, an increase of 56 percent. Signing bonuses are paid in the first year of a player’s deal, when he signs his NFL contract, and in the case of 2010 draft picks will be paid this year.
The NFL collective-bargaining agreement expires March 4, and if there is no new labor deal by then, the NFL can lock players out.
Mark Levin, NFLPA director of salary cap and agent administration, said that this year 26 of the 32 NFL first-round picks have option bonuses and in each case the time period in which that bonus has to be paid was extended out at least six months, or whenever the first NFL regular-season game is played in 2011.
Agents said that is because there is uncertainty in the marketplace as to when a lockout might occur and how long it may last. The option bonuses do not specify when the first 2011 regular-season NFL game could be played, and agents said there is a feeling in the marketplace that it may not be played in early September, but later in the fall next year. Agents requested anonymity because they did not want to speak publicly about their clients’ contracts or their discussions with NFL clubs.
Levin acknowledged that negotiators were trying to account for when a lockout might occur in the language of the option bonuses. “For example, if there was a lockout from March to July, [clubs] don’t have to exercise [the option bonus].”
“Now that the [period of time] to exercise has been extended to the first regular-season game, if they only lock out for a couple of months, they would be able to make that decision under the language of the contracts,” Levin said. “We wanted the agents to put it in the contract so you couldn’t leave it in the hands of an arbitrator.”
Many first-round NFL player contracts have both signing and option bonuses, although some have had either one or the other. Option bonuses have become more prevalent in recent years because they are a way agents can increase the amount of guaranteed and overall dollars going to the players under the complex rules that govern rookie contracts.
The NFLPA, which certifies agents to negotiate contracts with NFL clubs, advised agents to put more money into signing bonuses this year, Levin said. “We advised agents to try to get more money in Year One,” he said.