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An offset is a mechanism that protects the team in the event a player is cut and signs with a new club. If a player signs with a new club, the guaranteed amount remaining on the player’s contract with his initial club is offset by the amount the second club pays him. With no offset, the player can receive money from both the club that cut him and the new club that signed him, sometimes called “double-dipping.”
Offset language first became an issue of contention between clubs and agents in signing top draft picks last year. An offset disagreement caused quarterback Ryan Tannehill, a Dye client and the draft’s No. 8 pick, to miss the first three days of Miami Dolphins training camp. The Dolphins insisted on an offset, and Dye was adamantly opposed to it.
The Dolphins and Dye ultimately resolved the issue by creating a contract structure that included offset language but front-loaded bonuses so that Tannehill received a large portion of his total compensation earlier than in traditional rookie deals. Under the terms of the deal, Tannehill received his entire signing bonus in the first 60 days of the contract. He also received early payments in the three remaining years of the contract in the form of training camp bonuses. Historically, large portions of bonuses are deferred.
This year, when offset language became an issue again for top draft picks, many teams and clubs resolved it by agreeing to an offset and adopting an accelerated payment schedule similar to that in Tannehill’s deal. The Nos. 1, 3, 4, 7, 9, 10 and 12 picks signed deals with offset language and accelerated payments.
“They say imitation is the greatest form of flattery,” Dye said last week. “However, regardless of how favorable the Tannehill payout schedule is, I will continue to fight to eliminate offsets in all contracts just as I have for the last several years.”
Dye noted that top-10 NFL draft picks are already receiving far less lucrative deals under the new CBA and he thinks it’s only fair that they should receive all the money guaranteed to them in the contracts with the clubs that drafted them.
“Philosophically, because of the significant haircut the top 10 picks took with the new CBA, I firmly believe that they should be entitled to keep all of the guaranteed money associated with being a top ten pick,” Dye said.
This year, Dye represented two first-rounders. Linebacker Alec Ogletree, picked by the Rams at No. 30, received a contract with no offset language. Cornerback Dee Milliner, selected at No. 9 by the Jets, agreed to a deal with offset language but with an accelerated cash flow. Milliner agreed to the deal after missing about a week of training camp over the offset issue.
Offensive guard Chance Warmack, picked No. 10 by the Titans, was the last first-rounder to sign a deal, after missing five days of training camp. It included accelerated payments and an offset. Warmack’s agent, Roosevelt Barnes, a vice president at Relativity Sports, said Warmack was receiving “the majority” of his signing bonus within days of signing the contract. Offset language “was the sticking point,” Barnes added.
Some agents debated last week whether a contract with deferred bonuses and no offset language was better than one with offsets and a faster payment schedule.
Ken Sarnoff, an NFL agent at PlayersRep Sports Management, represents offensive tackle Lane Johnson, the No. 4 pick, who signed a $19.853 million deal with a $12.8 million signing bonus with the Eagles before training camp. Johnson’s contract includes offset language and an accelerated payment schedule.
“Lane got his entire signing bonus payable in 15 days,” Sarnoff said. “We could have fought and made the offset a bigger issue and held Lane out, but he was adamant that he didn’t want to miss any time.”
One thing agents agreed on last week was that the selling points of each structure would be used in recruiting the top prospects for the 2014 draft.
One former NFL general manager, who requested anonymity because he did not want to be identified publicly discussing teams and agents, said the offset issue was overblown. The offset comes into play only if a team cuts a player and this general manager said the chance of clubs cutting a high first-round pick was remote.
“I think it’s just not that big of an issue, and I think agents and teams need something to disagree on,” the former general manager said.
Liz Mullen can be reached at email@example.com. Follow her on Twitter @SBJLizMullen.
Lagardère Unlimited is hiring longtime sports industry executive Andy Pierce away from Creative Artists Agency to lead the company’s North American sports platform as president and CEO.
In his new position at Lagardère Unlimited, Pierce will report directly to Arnaud Lagardère, chairman of Lagardère Group, the parent company of Lagardère Unlimited. Pierce was still officially an employee of CAA last week but had informed CAA that he was leaving, and an announcement is expected today.
Pierce has worked in the sports industry for about 30 years. His hiring to run Lagardère’s North American sports platform comes a little more than four years after he joined CAA from IMG.
“I have tremendous confidence in Andy’s ability to lead and grow our sports business in America.”
Lagardère Group chairman
Photo by:GETTY IMAGES
Lagardère Unlimited was formed by Paris-based Lagardère Group in 2010 when the French mass media conglomerate acquired the former Blue Entertainment Sports Television, which included NFL, NBA and tennis representation practices, as well as an events, media and television division. In 2012, Lagardère Unlimited acquired the former Gaylord Sports Management Group, which counts Phil Mickelson as a client.
“The platform that Arnaud and his team have accomplished over the last three years is quite amazing,” Pierce said in a statement provided to SportsBusiness Journal. “The company’s strategy has never been more compelling. I am incredibly energized and honored to help lead Lagardère Unlimited into the future.”
Pierce will become the first president and CEO of Lagardère Unlimited. Kevin O’Connor had been COO of Lagardère Unlimited since 2010, but he left that position in May to become senior adviser to Arnaud Lagardère.
Pierce has extensive experience in corporate consulting and golf as well as deep relationships throughout the U.S. sports industry, including a long history at IMG. His hiring at Lagardère Unlimited comes at the same time IMG is for sale.
Before joining CAA in 2009, he was IMG’s head of corporate consulting. Pierce started his career at IMG, originally hired as a golf agent, and worked there for 27 years. He was promoted to be one of the top executives in IMG’s golf division before running corporate consulting there.
When Pierce joined CAA in 2009, he had non-compete clauses in his IMG employment contract that prohibited him from taking clients to CAA, an IMG spokesman said at the time.
As of last week, Pierce was still under contract to CAA, but the details of his departure were being worked on, a source said. This source requested anonymity because the person was not authorized to speak publicly on contract matters.
It is not clear when Pierce’s contract expires or what types of restrictions it contains. However, Pierce worked at CAA’s headquarters in Los Angeles, and California’s employee-friendly laws do not allow the types of restrictions on employees common in other states. It also is not clear whether any CAA clients could follow Pierce to Lagardère Unlimited.
A CAA spokesman would not comment.
Lagardère Unlimited also represents tennis players and NFL players, including Kansas City Chiefs offensive tackle Eric Fisher, the No. 1 pick in this year’s NFL draft. In addition, Lagardère Unlimited also has an NBA player representation practice, but the agent who led that practice, Dan Fegan, left last year and joined Relativity Sports this year.
Lagardère Unlimited’s lines of business also include sports academies, events, media, marketing and consulting.
Arnaud Lagardère told SportsBusiness Journal in a letter in May that sports would play a large part in the growth of Lagardère Group and that he planned to grow Lagardère Unlimited through acquisitions, organic growth and hiring the right people.
“The sports representation business is a people business — I understand that,” Lagardère wrote. “Thus, it is important to surround myself with a quality team who shares not only in my passion, but in the passion of my existing team.”