For years, veteran players have been pushing for fully-guaranteed contracts. For years, NFL teams have resisted.
Finally, a team caved. The Browns fully guaranteed quarterback Deshaun Watson‘s five-year, $230 million deal. Every penny of it.
The Browns had to do it in order to get the player they coveted. Dropped by Watson as he trimmed his list of finalists from four to three, the Browns had to make Watson an offer he couldn’t and wouldn’t refuse. That offer included fully guaranteeing all five years of a contract worth $46 million per year.
For most veteran players, fully guaranteed contracts would mean shorter deals with less fluff. For example, the Bills wouldn’t have signed Von Miller to a six-year, $120 million contract if the full amount of the contract was guaranteed. For veteran quarterbacks — specifically, proven franchise quarterbacks — it doesn’t matter whether the contract is or isn’t guaranteed. The team isn’t going to cut the franchise quarterback before the contract expires (unless he really wasn’t a franchise quarterback and the team figured it out too late . . . e.g., Jared Goff).
A separate issue — one that could result in a less welcoming reception at the league meetings next week for owner Jimmy Haslam — arises from Cleveland dramatically breaking ranks with the collective resistance to fully guaranteeing contracts multiple years into the future. Some teams have fully guaranteed veteran contracts in the third year. No one has fully guaranteed significant salaries five years into the future.
As it relates to Watson’s contract, it means that the Browns will be required, per a source with knowledge of the formula and policy, to place $169 million into escrow as of March 31, 2023. As the source explained it, the league takes a snapshot of all fully guaranteed salaries on January 31 of each year. Any fully guaranteed payments not made by March 31 must be placed in escrow, up to 75 percent of the total contract value. Also, each team has a $15 million annual allowance. Under the terms of Watson’s current deal, it works out to a major chunk of cash that Haslam must set aside next year.
The willingness of the Browns to fully guarantee five years of income for Watson puts other teams who will be signing franchise quarterbacks to long-term deals in a position to be pressured to do the same. Now that one team has done it, others will be expected to do it, too.
Ultimately, it comes down to leverage. Watson had plenty of it, enough to get the Browns to be willing to do whatever they had to do to get Watson to choose to play for them. The device likely won’t become commonplace for quarterback contracts. Instead, it will be deployed only when the leverage commands it.
So who’s next? Probably Russell Wilson, when he signs his next contract no later than April 2023. Given everything the Broncos gave up to get him, they’ll basically be handing him a blank check. And if he asks for the funds to be not only sufficient but also guaranteed, the Broncos quite possibly will do it.