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Lamar Jackson and the NFL's Contract Cold War

It’s a natural instinct for sports fans to feel that we could, at times, do a far better job than the athletes, coaches, and executives that work in the games we know so well. Sometimes we can’t control it; I’ve even found myself blurting out the odd “I could’ve caught that!”, or “I would’ve run that route better!”, knowing full well that I would, in fact, not catch the pass in question or correctly run the route in question (and in the astonishingly small chance that I did those two things, I also know that to receive a tackle from any of the eleven defenders on the field would likely turn my skeleton into sawdust). I can’t apologize for such primal reactions, unfortunately.

Every so often, however, there are instances when someone on a team we follow makes a very avoidable mistake of epic proportions, where many members of the fanbase could have legitimately made a much better choice. For quite a few hours, I felt that way about the Baltimore Ravens’ failure to re-sign Lamar Jackson, the franchise quarterback (or so we thought), to a long-term deal.

I could probably count on one hand the amount of times that I’ve been more livid as a sports fan than hearing the news that Baltimore would be placing the non-exclusive franchise tag on Jackson, and I’ll refrain from listing them as they’re not memories I care to revisit. It’s a slap in the face to all fans of the organization, as it is inherently a very willful decision by the Ravens to avoid securing a competitive team in this league for the next several years to come.


The Ravens shockingly placed the non-exclusive franchise tag on Lamar Jackson Tuesday afternoon. Image from: The Atlanta Journal-Constitution.

But then I got to thinking, and I got to reading. And now I’ve begun to realize that the truth behind this seemingly bone-headed decision, both competitively and financially, by the Ravens organization is more sinister than a lack of faith in their star quarterback. It may be a unified front, a show of force, and a flex of power by all thirty-two team owners in the NFL against all of their own players.



First, and foremost: what the hell is a non-exclusive franchise tag? It’s a very valid question for those who don’t follow football or just watch it very casually, since it’s a concept that seems to exist only in the NFL. Before that, though, I need to explain restricted and unrestricted free agency (this is a concept that exists in other sports, like basketball). When a player has completed three or fewer seasons but has an expiring contract, they become what’s called a Restricted Free Agent (RFA), which still means that the RFA is free to negotiate with other teams, but with a caveat. The player’s original team is allowed to place one of four “tenders” on the player, with differing values attached to them, that allow either a “right of first refusal” (wherein the original team has a grace period to ponder whether they want to match an offer made by another team and thus retain the RFA) or yield some sort of draft-pick compensation should the RFA leave and sign with another franchise.

Importantly, like with tags -- as I’ll discuss later -- the player has little to no recourse if they are unhappy with the offer sheet given by their original team and if no other team is making an offer; their rights remain with their original team, and they won’t accrue another completed season (and potentially qualify for unrestricted free agency) if they sit out the whole year. Essentially, they’re stuck in limbo unless they play out that contract. A further breakdown of the RFA system in the NFL can be found here for those who want all the details.


Tyler Huntley, Jackson’s backup, is himself a Restricted Free Agent this offseason. Image from: Dylan Buell/Getty Images.

A player becomes an Unrestricted Free Agent (UFA) if upon the expiration of their contract the player has four or more accrued seasons in the league. In this case, the player truly hits the open market and is free to negotiate and sign with any other team that they please. Well, that’s almost true, at least.

This brings us to the NFL’s tagging system. The franchise tag is a one-year contract that every NFL franchise can use on a single player -- provided that they are a UFA -- and is available exactly once every offseason. It gives a guaranteed contract with non-negotiable salary to the selected player and, depending on the type of tag, can ensure outright that the franchise keeps the player.

The exclusive franchise tag completely prohibits the selected player from negotiating with other teams, and necessitates a salary worth either the average of the top five salaries of that player’s position from the current year, or 120% of the player’s previous salary, whichever is greater. The non-exclusive franchise tag is similar, but instead pays out either the average of the top five salaries of the player’s position from the previous five years or 120% of the player’s previous salary (again, whichever is greater), and does allow the player to negotiate with other teams. Should the player sign with another team, the player’s original team is subsequently awarded two first-round picks as compensation.

In some cases the franchise finds it more strategically valuable to place the non-exclusive tag on a player as it carries a lower salary and can yield two high-value draft picks if the player walks, but in either case it represents a major power imbalance between players and teams in negotiation.

Furthermore, a team is entitled to place the franchise tag on a player for multiple years in a row-- the only catch is that the price associated with the tag increases with each consecutive use. In the second year under the tag, the player is guaranteed 120% of their previous franchise tag salary, and in the third year is guaranteed either 120% of the average of the top five salaries at the position or 144% of their second franchise tag salary, whichever is greater. Former Seattle Seahawks tackle and Pro Football Hall of Fame inductee Walter Jones was famously tagged for three straight seasons before having to hold out -- a massive risk for the player -- to ensure a long-term deal. After Jones’ ordeal, the 2006 version of the league’s Collective Bargaining Agreement made it more expensive to franchise tag a player for the third time, and it hasn’t happened again since. More recently, Kirk Cousins, while he was still employed by the Washington organization, played under the franchise tag in both 2016 and 2017 before finally hitting the open market and signing with Minnesota.


Kirk Cousins was franchise tagged by Wasington twice in a row in 2016 and 2017. Image from: Patrick McDermott/Getty Images.

Suffice to say, the franchise tag imposes a particularly existential threat to young, elite players. They’re seeking, and in many cases deservedly so, a contract whose salary exceeds the value of any of their peers, but instead get no choice in the matter of playing under a contract with a much lower value, and with zero long-term security. If Cousins had suffered a catastrophic injury in the 2016 season (in which he played on a notoriously unsafe home turf, mind you), he would never even have gotten the chance to negotiate for elite money in his entire professional career. As previously mentioned, players could try holding out and forcing their team’s hand to either give them a long-term deal or trade them, but this both quickly spirals into toxicity in the media and can prevent the player from being in their best shape for the season as they would be sacrificing access to team facilities and trainers.

The franchise tag was introduced in 1993, before which the very concept of free agency at all did not exist in the NFL. In that instance of the league’s CBA, the free agency system (and with it, the salary cap system), as well as an early iteration of the franchise tag, was installed. That version of the tag was referred to as the “Elway Rule”, as it originated due to the Broncos’ then-owner, Pat Bowlen, refusing to sign the CBA as he was terrified of the idea of losing quarterback John Elway in free agency and wanted another season of cheap control over his player, and more time to negotiate a deal.

This is a notoriously complicated system, and I do not blame you if you’re more than a little confused at all the jargon I’ve thrown out. If you’re reading this and are thinking two things -- that the tag system seems extremely unfair towards players, and that owners in the NFL wield far too much power -- then you understand enough. The question that adds a lot more uncertainty in the tag system, particularly how it applies to young quarterbacks, is now: did Deshaun Watson’s contract break everything?




Deshaun Watson signed a five-year, fully guaranteed, $230 million contract with the Browns last March. Image from: Carmen Mandato/Getty Images.

I’ve already written about the moral depravity surrounding Watson’s contract in regards to his off-field conduct, so for now I’ll stick to the financial repercussions of his deal. To recap: after getting traded to Cleveland, Watson signed a monstrous five-year, $230 million contract. The concept of a talented player “resetting the market” like this -- where the value in their new deal far exceeds that of their peers and serves to set a new standard for the value of their position and how it fits into the ever-rising NFL salary cap -- is relatively common. The problem with Watson’s contract (again, strictly in an economic sense) is that it was fully guaranteed.

In other sports, this would not be news. In the NBA, for instance, most contracts are fully guaranteed, and there are established standards for the value of contracts that can be given to elite and cream-of-the-crop players, called “max” and “supermax” deals, as well as clear guidelines that determine when players are eligible for such contracts. These deals also are calculated using a fixed percentage of the cap defined in the league’s CBA, meaning that they automatically adjust to higher league profits (and, thus, a higher salary cap). This is a direct product of the NBA being a league where the players have quite a lot of influence, and a real voice to force, or at least force consideration of, changes that benefit them and their wellbeing.

Such power residing with the players may be the single greatest fear amongst team owners in the NFL.

In the wake of Watson’s contract, young quarterbacks across the league likely saw what his agent was able to accomplish with the Browns organization and thought, “if he can get that deal, why can’t I?”. As the NFL becomes more and more of a “passing league” every year and with modern offenses evolving rapidly, there’s suddenly a big boom of generational passers the likes of which we’ve perhaps never seen. After Watson, and with Patrick Mahomes and Josh Allen already signed to mega-deals, Jackson’s negotiations were always front of mind among GMs across the league; with Joe Burrow, Justin Herbert, Jalen Hurts, and Trevor Lawrence looming on the horizon, quarterback contracts had the potential to quickly turn into an arms race between team owners.

The major issue with that, however, is the way in which guaranteed contracts are actually paid out. Here, the finer details on how exactly the money travels is actually very relevant. The NFL’s CBA specifies that any future guaranteed money exceeding $15 million must be placed by the team’s owner into an escrow account. Per 33rdTeam, in the case of Watson’s contract $184 million would have to be placed into such an account-- thereby making a not-insignificant dent in the team owner’s personal finances in the short term. According to Forbes’ most recent valuation of Jimmy and Dee Haslam, the Browns’ majority owners, that amount going into escrow would represent close to 4% of the couple’s net worth.


Cleveland Browns majority owners Jimmy and Dee Haslam had to put nearly $200 million in escrow to sign Deshaun Watson. Image from: Joshua Gunter, cleveland.com.

You may be thinking that, while of course that value is not chump change, would these rich-with-a-capital-R owners really miss that money, especially considering the cost can be thought of as an investment in the team itself? Well, there are two problems with that. The first is that billionaires can be surprisingly stingy people! The second problem is that the league’s thirty-one (excluding the publicly-funded Green Bay Packers) majority owners can vary wildly in net worth.

For example, Carolina Panthers majority owner David Tepper -- with a net worth of $18.5 billion -- could sleep much more soundly at night after placing upwards of $200 million in escrow for a fully guaranteed contract for Lamar Jackson than, say, Las Vegas Raiders majority owner Mark Davis would, since he’s valued at a measly $1.9 billion. Therefore, this system tilts the NFL quarterback marketplace heavily in favor of the teams with the richest owners.

In addition, these team owners, who have publicly said things about their own players such as, “[you can’t have] inmates running the prison, don’t even want to entertain this power struggle with young quarterbacks. In their minds, paying their employees fair wages in accordance with the market and the company's profits, and with guarantees to cover freak injuries or accidents, is beneath them. And having to part with hundreds of millions of dollars in their own money up front? It’s sacrilegious!

So finally, this brings us around to the Lamar Jackson situation. All season, quarterback-hungry teams have been closely monitoring Jackson, who was in the final year of his rookie contract without a signed offer from Baltimore. Above-average starting quarterbacks rarely hit the open market. A young, elite quarterback? It just doesn’t happen-- so teams like Carolina, Atlanta, Washington, and Miami, who have had long-reported interest in Jackson, must have been foaming at the mouth when they heard the news of his non-exclusive franchise tag. A legendary all-out bidding war was set to unfold, so thought fans across the NFL.

Instead, there was silence. Then, as The Ringer’s Danny Heifetz noted (and whose excellent Twitter thread inspired this article), all four of the aforementioned teams, as well as a now-QB-poor Las Vegas, were suddenly out on Jackson entirely. The Falcons “would not be pursuing QB Lamar Jackson”. The Panthers were “not expected to be in the Jackson market”. The Raiders’ involvement in Jackson would be “very unlikely”. All three of these reports, as well as similarly worded ones coming from the Dolphins’ and Commanders’ camps, came out at approximately the same time on Tuesday.

How do we make this make sense? The answer that comes to mind is a tried-and-true method of NFL team owners-- good old-fashioned collusion.

By nature, collusion is of course an extremely difficult thing to prove. But as multiple previous lawsuit settlements have shown, it still runs rampant in football. In the case of Lamar Jackson, former players such as Robert Griffin III, J.J. Watt, and Ryan Clark have already publicly alluded to their suspicions against the owners. For Jackson, such collusion, officially, would be tricky to argue in court and would take years even if it were possible. Which means that at the present moment, if this collusion is indeed the case, he’s essentially screwed.

Could Lamar Jackson be the victim of collusion from the NFL owners? Image from: Bryan Woolston/Getty.

All of the intricate parts of the NFL’s economic system, the personal beliefs and politics of the team owners, and the power of previously-successful collusion amongst the billionaires who run the league have led to this.

So where do we go from here? I wish I had an answer for you, in all honesty. For the short term, it seems likely that Jackson will become the victim of a concerted effort by the team owners to forcibly drive down the standard value in guaranteed money that is handed out to franchise quarterbacks. If he wants to actually play this upcoming season and beyond, he doesn’t really have any other options than to sign the tag deal from the Ravens. In the absolute best case, this issue gets resolved such that quarterbacks have more power in negotiations, or can even be eligible for “supermax”-type guaranteed contracts, when the next iteration of the league’s CBA is written. Unfortunately, the current CBA lasts until 2030 (when all of the quarterbacks I’ve mentioned in this article will have long signed their new deals), and it’s unlikely that everyone in the NFL Players Association would even get behind it, given that it only benefits the top tier of players who make up a small minority of the NFLPA’s voting body. And even if the NFLPA does ratify it, the owners can reject it, which would spark a bitter all-out war and potentially a strike by the players (meaning no football at all).

In the next “best case”, either Jackson, another one of the upcoming crop of quarterbacks who are due a contract, or someone else in the future will need to stand up to the owners and lodge an official complaint or even file a lawsuit.

In fewer words: this issue will not get resolved without it first getting extremely ugly. But such is the nature of the National Football League, unfortunately; it’s the billionaires’ world, and we’re all just living in it. ■

Comments

  1. Arguably one of the best articles you've ever written! Its definitely gonna be interesting to see how the Ravens' season is going to end up, especially if Lamar ends up playing half-assedly (which I doubt will happen). I think its also important to note that every player comes with a ticking time bomb: time. Its inevitable that all the mobile QBs have a realistic expiration date. So if Lamar or any other player does choose to opt out of playing for a better deal, he's taking a BIG risk on his future stock as an athlete. Obviously, owners can use this to exploit players into taking deals that are less appealing than originally thought

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    1. Thanks! And that’s a good point, it’s fortuitous for these owners that the first big-ticket QB due up for a contract after Watson is Jackson, who’s had (a little unfairly) narratives surrounding his durability and sustainability of play his whole career. They can just point to that to cover themselves.

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  2. Great article. What makes this possible is that franchises have little to lose if they are not competitive. Their revenue stream doesn't get affected too much whether they are playoff bound, rebuilding, or eternally sucking in the guise of rebuilding.

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