Salary Cap Update: The Contract Brickdown

We are trying to guide you through the salary cap minefield this off-season. All information has been checked and verified to the best of our abilities, but given the difficult nature of obtaining contract details, we appreciate any corrections, feedback, additional information and questions and will update these posts periodically to reflect this.

More details have started to flow in respect of the D’Brickashaw Ferguson contract extension, once again via [embargo lifted] PFT.

Although PFT claims to have a copy of the contract, all of the information they provided would have been freely available from the NFL Player’s Association and therefore, Jason from the unofficial Jets cap site is working his sources to try and ensure that there are not any additional clauses that they didn’t mention.

We’ll get to reflecting on their take in due course, but lifting the important details from the article, we can glean the following:

* No upfront bonus money was paid, instead the Jets are using a mechanism whereby they will guarantee salary as and when it becomes due.
* Although this money is classified as guaranteed, if he is off the roster at the certain points, for whatever reason, then the Jets will not have to pay him this money.
* He will receive a total of approximately $5.3m in 2010, an increase of approximately $2.2m on what he was due to receive from his old deal. Only $600K of this is base salary, with the balance made up of a $3.1m roster bonus and a $1.6m signing bonus, both due within the next few weeks.
* He has a salary of approximately $5.6m in 2011 and also an option bonus of $3.9m, the timing of which is flexible. If he is off the roster by February 2011, he won’t receive any of this money. Also, if he is off the roster between February and the payment of the bonus (which can be paid as late as September), then he won’t receive the bonus.
* His salaries of approximately $10m in 2012 and $7.25m in 2013 work in similar fashion and will only become guaranteed if he is not cut before mid-February.
* PFT just released more details, which include a fake $1.3m incentive (based on blocked punts) to boost the total value of the contract and annual $1m bonuses which depend upon him not holding out in 2014 to 2017.
* There don’t appear to be any guarantees in case of injury.

An interestingly laid out deal, to say the least. Let’s analyze PFT’s take and how this affects the Jets in their efforts to keep the core together after the jump.

How about a hand for Mike Tannenbaum?

One thing the PFT article doesn’t contain is an iota of praise for the Jets General Manager for putting together a deal which has a reasonable base value, doesn’t destroy their cap situation and (if the details have been reported correctly) offers them protection against Ferguson getting a career threatening injury or failing to continue to play at a high enough level to earn the money in the contract. That’s not exactly a surprise though.

How about a hand for D’Brickashaw Ferguson?

PFT seems keen to bash Team Brick for accepting a deal like this one, but Ferguson has signed a deal which helps the team towards their goal of keeping the core together. His money due for 2010 and 2011 in his existing deal was not guaranteed anyway, so it’s not like he gave anything up. He gets a $2.2m bump right away and then will get another $5.6m if he’s still on the team at the end of the season and another $3.9m before the 2011 season is due to start. The only real risk to him is a career threatening injury, but if that happened at any point before the start of the 2011 season under his old deal, all he would have received is his 2010 salary ($3.1m), so he is much better off. If he stays healthy, he’ll continue to earn money at a rate commensurate with the top tackles in the league, as he should. Bassett quite rightly pointed out to me that they can probably convert the “guaranteed” salary into something more concrete once a new CBA is in place, so both parties might have this in mind.

Cash flow issues?

While PFT barely alludes to it, some might view this as a further indication that the Jets don’t have the financial resources to cope with a huge outlay at the moment. (Bart Hubbuch – or one of his orderlies – is probably typing away as we speak). However, this seems to be to be more symptomatic of the league-wide reluctance to guarantee huge sums in advance of what might be a lockout season. Alternatively, since they’ve done the deal early, it stands to reason that the big money should be delayed. This is something which the Jets typically do, even for guys that aren’t getting an early extension (eg Bart Scott). The deals for Scott, Faneca and Rhodes all had small signing bonuses with bigger roster bonuses and guaranteed salary after the first year. The fact that they structured it like this might also indicate that they are contemplating paying an upfront sum on a certain other contract extension.

Fluff and nonsense

PFT is quick to characterize the amount of “fluff” in the initial contract figures, due to the fact there is so much guaranteed-but-potentially-not-necessarily-guaranteed money in the deal. However, this is hardly anything new. Contracts often contain clawback provisions, whereby bonus money is recoverable if a draft pick busts. Mark Sanchez, Bart Scott and Lito Sheppard all had eight-figure bonuses that were classified as guaranteed, but would only apply if they were still a Jet one year after joining the team. Obviously, barring a serious meltdown or injury, the Sanchez and Scott money was pretty much “guaranteed to be guaranteed”, whereas the Lito bonus was anything but. Similarly, Kerry Rhodes had some money that was classified as guaranteed, but that he lost when he was traded from the team and would have lost even more if he was cut. Also, almost $4m of Vernon Gholston’s “guaranteed” money depended on him becoming a regular contributor (and in the end, they removed that clause and replaced it with a smaller amount and a future roster bonus). That’s what goes on around the league, not just with the Jets, so it isn’t any huge revelation to see the deal “exposed for what it really is” in such a way. It doesn’t seem appropriate to bash the agents, either. Finally, calling the $60m with $34m guaranteed report “fluff” and then characterizing the deal as a one-year, $5.3m deal in the headline to the article strikes me as a tad ironic.

But what if I get injured?

This is a concern that many Jets players have reportedly had, especially after what happened to Leon Washington, although Darrelle Revis is the only one who seems to regularly address the point with the media. Ferguson is obviously confident that he is a durable player and will be able to play for many years at a high level. More importantly, it seems he wouldn’t want to collect huge sums of money if he was unable to earn it. If a player is concerned about potential lost earnings they can probably take out insurance. That won’t come cheap, but that’s exactly the reason why the Jets are not prepared to land themselves in a situation where they are paying for someone who can’t earn their keep. The bottom line is that, as long as he can play at a level that merits this kind of money, he will be able to do so, and it has hopefully been set up in a way that any chance of a future holdout is mitigated, particularly with 4 x $1m at stake if he decides to hold out.

What does this do to the Jets cap situation?

As you may recall, I tried to put together a theoretical scenario whereby the Jets re-signed not only the core four, but also Cromartie, Edwards and Holmes by 2011. I assumed Brick would get a 6 year, 60m deal bolted onto what he was due up to the end of 2010, but he actually got (exactly) that sum bolted onto what he was due for 2011 as well. Despite this minor difference, the crucial factor is that 2011 cap number, which will affect their ability to sign people in the next capped year. In my estimate, his 2011 cap number was just over $10m and we have calculated the actual 2011 cap number to be just under $9.6m, so they have actually created additional cap space in that year of around $3m, slightly higher than I suggested. In other words, they are still on course, if resigning everyone is the path they choose to take. I wonder if the fact that they didn’t give Ferguson any upfront money and were able to create that additional cap space now means that they will forward a contract offer to Darrelle Revis with some upfront guarantees in it. We will have to wait and see.

Shame on you, Florio

I don’t think a light-hearted quip about Leon Washington and Joe Theismann and their respective leg injuries will ever be appropriate. I’d like to say I lost all respect for you with that comment, but…[/embargo reinstated]

I think that sums up the main issues. We can expect more details to filter out, but for now it seems appropriate to congratulate Brick and the Jets on what looks like a fair deal for both parties.




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