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Option bonuses could be a sticking point for first-round contracts

As talks continue to progress slowly, if at all, between first-round picks and the teams who love them (but not so much to overpay them), one of the sticking points for most of the round-one contracts comes from a phenomenon that has been used in recent years to maximize the money paid to players taken at the top of the draft.

Due to the nuances of the rookie salary pool, which makes it difficult if not impossible to satisfy the player’s full range of financial expectations via a large signing bonus (we’d provide more details, but you’d be asleep quickly), the option bonus has become a key tool. 

The option bonus is paid routinely in the second year of the contract.  Technically, the option bonus adds another year onto the player’s contract, as it did with Bucs quarterback Josh Freeman, a 2009 first-rounder who per PewterReport.com received his option bonus earlier this year, expanding his deal from four years to five.  But it’s primarily a vehicle for paying the players; indeed, most contracts containing option bonuses have a “non-exercise fee” in the same amount of the option bonus, meaning that the only real option for avoiding the payment is cutting the player.

So what’s the problem in 2010?  With labor uncertainty running rampant in league circles, it’s unclear that there will be a 2011 league year.  And this has raised concerns that first-round rookies signed in 2010 could be stiffed out of their option bonuses if there’s no football in 2011.

The problem, as it’s been explained to us, is that the teams aren’t willing to agree to contractual terms that would result in the option bonuses being paid in 2011 regardless of whether a work stoppage occurs.  And so the compromise used by first-round picks could end up being the same one used by the Jets in the D’Brickashaw Ferguson deal.

In that contract, a copy of which we obtained last week, the option may be exercised “not earlier than the first day of the League Year immediately following the 2010 League Year, and not later than the day after the 1st regular season game the Club has played in the same League Year.”  In English, “Sure, there might be a lockout, but you’ll get your money whenever football comes back.”

For the players, it means that they’ll have to settle for waiting to get paid, if there’s a work stoppage.  They may not like it, but it’s likely the best that they’ll be able to.

Of course, they can also sit out the entire year, re-enter the draft in 2011 and not get paid at all if there’s no football, and when they get paid it’s be subject to a new rookie wage scale.

So, yeah, we suspect they’ll end up agreeing to defer the option bonuses in the event of a work stoppage.

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8 Responses to “Option bonuses could be a sticking point for first-round contracts”
  1. Stillerz says: Jul 15, 2010 10:01 AM

    GET THE CBA DONE it is absolutely ridiculas that a corporation as big as the NFL can’t iron out a contract. Teams and players are already feeling the effects and unfortunatly, if Godell and Smith can’t get their heads out of their asses, the fans will feel the effects next year in the form of NO SEASON

  2. toddyarbroughjr says: Jul 15, 2010 10:15 AM

    I’m all about paying the more talented players more cash, but a rookie who has never touched an NFL field should not be getting paid more than a veteran player who has put his body on the line for years and proven himself. Especially since the newbie has still got SO much to learn. I know he’s got potential, but make him work for the PRIVELAGE of earning that paycheck. And I feel like EVERYONE’s signing bonus should be minimal. The bulk of the money should be due because of your play. But I do sympathize with the injury ridden players who deserve more than a boot when they get hurt, so maybe an injury clause should be implamented rather than a large signing bonus, though not as big as one. This way if you truely are hurt and out the season, you still get paid. If they cut you due to an injury you are still guarunteed a percentage of your contract. And just continue to use incentives to push players to work harder and that way if a player meets all expectations he earns more money, and if not (J. Russell) than you aren’t out a crap load of cash.

  3. Braylon_the_Bearded says: Jul 15, 2010 10:15 AM

    yeah seriously, this CBA needs to get done immediately. it should be the NFL’s top priority! the NY Jets have a ton of contract issues that wouldn’t exist right now if there were a CBA in place. Other teams are suffering from it too. There are gonna be players holding out through training camp and maybe into the start of the season because GM’s don’t want to play with money until the CBA is done.

  4. Brewster says: Jul 15, 2010 10:16 AM

    Pretty low hit count this morning on these posts Florio
    You need to get that Tebow/Nike shoe endorsement deal posted to drive up the comments.
    Cue the “Jesus in cleats” comments.

  5. severs28 says: Jul 15, 2010 10:20 AM

    Get the CBA done! That is all.

  6. SomeFans says: Jul 15, 2010 10:50 AM

    “NY Jests have a ton of contract issues that wouldn’t exist right now if there were a CBA in place”
    Dont make lame excuses for poor management and desperate signings. The jests went all in and will fail as usual for that franchise.
    They will look like a RV squad in two years without enough good players to field a team. Same old jests.

  7. 81megatron81 says: Jul 15, 2010 12:02 PM

    you mean queue? moron.

  8. GreenAsGrass says: Jul 15, 2010 12:13 PM

    @some fans
    “They will look like a RV squad in two years without enough good players to field a team.”
    wishful thinking…all Tannenbaum has done was to improve a defense that was #1 last year, get rid of an overpaid Faneca, trade up to land the best CB in football AND give Revis a rookie contract that he can’t renegotiate and is cap friendly.
    If the Jets can win the SB this year or next year, I will endure a few years of your so called RV team…

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