SBJ/Aug. 5-11, 2013/Labor and Agents

Despite workaround, Dye still doesn’t like offset language

Liz Mullen
Veteran NFL agent Pat Dye Jr. said he will fight in future years to avoid offset language for rookie clients, even though he helped invent the contract structure that clubs and agents used this year to give more cash upfront to players who accepted an offset.

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 lmullen@sportsbusinessjournal.com. Follow her on Twitter @SBJLizMullen.

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