Funding rule likely kept Cardinals from fully guaranteeing Kyler Murray’s deal

NFC Wild Card Playoffs - Arizona Cardinals v Los Angeles Rams
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After the Browns gave quarterback Deshaun Watson a five-year, fully-guaranteed $230 million contract, NFL Players Association president JC Tretter challenged agents to push for more fully-guaranteed contracts. Cardinals quarterback Kyler Murray, while getting $100,00 more year in average salary than Watson, got only $160 million guaranteed.

The amount that’s fully guaranteed isn’t mentioned in the initial reporting on the terms, because it never is. Because, except in very rare cases, the amount of the full guarantee is always less than the overall amount of the guarantee. Even if it’s $160 million (and it isn’t), that’s more than $70 million less than the full value of the deal.

Some will blame agent Erik Burkhardt for not insisting on a five-year, fully guaranteed deal. But here’s the problem. Some teams simply won’t be able to put massive amounts of cash in escrow, as required by the league’s ridiculously outdated funding rule.

A vestige of an era in which some franchise possibly would have run out of money to pay future guarantees, the funding rule requires certain amounts to be placed into escrow. For Watson, Browns owner Jimmy Haslam must deposit $169 million into an escrow account by March 31, 2023. As one source recently explained it to PFT, that’s quite possibly a check that Cardinals owner Michael Bidwill can’t afford to write.

And that’s another reason for the funding rule to go away. Owners who may not have a mountain of cash now necessarily will have sufficient dollars later (thanks to the TV money) to honor full guarantees.

But the funding rule isn’t going away. So the problem isn’t going away. And it will be an issue for other teams that want to sign quarterback to massive deals. Starting next year, when the Bengals try to get quarterback Joe Burrow to accept something less than Watson’s $230 million full guarantee. Because owner Mike Brown most likely can’t or won’t drop $169 million into an escrow account by March 31, 2024.

More on the topic is discussed in the attached video, which was recorded not long before Murray agreed to terms, but which highlighted the problem over full guarantees and the funding rule.

29 responses to “Funding rule likely kept Cardinals from fully guaranteeing Kyler Murray’s deal

  1. If such a disparity exists, then there should be a percentage cap on guarantees.

  2. Great point about Burrows. It just now hit me that he could force his way out of there in 3 years in a kirk cousins-esq move, maybe right on time to replace Stafford in L.A. LOL

  3. Great point about Burrows. It just now hit me that he could force his way out of there in 3 years in a kirk cousins-esq move, maybe right on time to replace Stafford in L.A. LOL or Brady in Miami

  4. Guarantees outpacing owners liquidity to cut huge checks is going is a big problem.

  5. Just because Burrow is up for a new deal doesn’t mean he’s going to push for one. The bengals have key players up for extensions next year besides him like Logan Wilson and Tee Higgins and I’m fairly confident Burrow would like to have the team lock those guys up before he gets his new deal which could very well not happen until 2024.

  6. minime says:
    July 21, 2022 at 1:34 pm

    Guaranteed contracts should be out lawed in all sports.
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    You mean like instead of capitalism?

  7. Aw, poor guy, I know how bad it feels to get “only $160 million guaranteed” His family will be surviving on ramen noodles.

    On the other point, why is it a bad thing to have the owners produce the funding for mega guaranteed contracts in advance? It won’t happen, but imagine how bad it would be if an NFL owner someday defaulted on their player’s contracts like the old USFL did? Why not have the owners produce the money in advance instead of using future imaginary monopoly money?

  8. Remember that owning a team doesn’t guarantee that you have a lot of liquid assets. Forcing teams to put guaranteed money in escrow is meant to ensure solvency for these contracts. Think what would happen if for example the Browns, didnt have the funds to pay Watson’s contract. That would be a huge black eye for the sport, and frankly, unfair to Watson.

    Not sure why this is outdated.

  9. Paying a lot of money for a QB who is just above average and hasn’t won one big game. QBs used to have to do something to get these deals, now anyone who puts up numbers gets a deal in a league that makes it easier to pass than ever. They will be sorry they paid this kid. He isn’t the type of player you invest that much of your cap to, he needs more talent around him than a Rodgers or Mahomes.

  10. You don’t get what you deserve.

    You get what you negotiate.

    An experienced negotiator will usually net you more in the end.

    They are no different than any other skill position.

    Unless you want others dictating what you can and can’t get leave them alone.

  11. I am a 50-year old lifelong Eagles fan from Philly that has lived in Arizona since 2001. The funny thing about Murray you most people here does not know he exists. He is not a star in any sense of the word outside of the few actual Cardinals fans that exist. A QB getting that kind of money should be such a star he pays for it himself. If Hurts plays well, you can pay him that kind of cash because it Philly, he pays for himself many times over. Murray cannot do that here. And all of this before we even get into how this guy is worn out by week 12 and can’t make a living as a pocket passer.

  12. If the money is guaranteed to be there from TV, then the owners should have no trouble borrowing against the future revenue to fund the escrow. If this is really a barrier to guaranteed money, the NFLPA would scrap the rule. Curious if the escrow could be satisfied by a letter of credit issued by a bank. Much cheaper for the team and does the same function for the player. If an owner can’t figure this out they need a new CFO or GC

  13. The Mahomes and Josh Allen deals look better every day. Especially since they are both much better QBs than Kyler.

  14. I’m surprised wealthier owners don’t try to use their ability to fund more guaranteed money as an advantage when luring free agents. They may nor be able to break the bank with overall value of contracts due to the salary cap, but they certainly could guarantee a higher percentage of their players’ contracts. Actually it would be interesting to see how teams are ranked in terms of how much money in contracts they guarantee.

  15. I’m surprised wealthier owners don’t try to use their ability to fund more guaranteed money as an advantage when luring free agents. They may not be able to break the bank with overall value of contracts due to the salary cap, but they certainly could guarantee a higher percentage of their players’ contracts. Actually it would be interesting to see how teams are currently ranked in terms of how much money in contracts they guarantee.

  16. Having to put hundreds of millions of cash in escrow is bad business and one of the many reasons the NFL is so far behind in fully guaranteeing contracts. Business axiom 101? Cash is king. Click on the link to the story from April – that explains it pretty well. Not sure why the NFLPA hasn’t pushed this issue.

  17. What about a set percentage of guaranteed money for all contracts?
    It’s clear the cap is totally bogus anyway, so I’m not sure why any of the other rules matter either.

  18. Fully guaranteed contracts should always be dependent on the situation and never the standard. If gigantic fully guaranteed QB contracts become the standard, won’t these guys just end up on teams that have the richest owners? Sounds both plausible and undesirable to me. But hey, go get paid I guess.

  19. graysobr says:
    July 21, 2022 at 2:39 pm
    I am a 50-year old lifelong Eagles fan from Philly that has lived in Arizona since 2001. The funny thing about Murray you most people here does not know he exists. He is not a star in any sense of the word outside of the few actual Cardinals fans that exist. A QB getting that kind of money should be such a star he pays for it himself. If Hurts plays well, you can pay him that kind of cash because it Philly, he pays for himself many times over. Murray cannot do that here. And all of this before we even get into how this guy is worn out by week 12 and can’t make a living as a pocket passer.

    1322Rate This

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    Nobody outside of Philly cares about your quarterback. At all. And Hurts couldn’t play in the CFL as a “pocket passer.”

  20. You guys have it wrong. It is the TEAM that writes the check, not the owner. And since the team is worth many billions, it is absolutely absurd to suggest that they cannot access enough credit to fund the stupid rule regarding guarantees if they want to. Fact is that the NFL does NOT want guaranteed contracts and have done everything possible to make them hard to give out. That’s why so many owners were pissed off at Haslam for the Watson contract, because the genie is now out of the bottle.

  21. This explains the Bengals suddenly willing to sell the naming rights to Paul Brown Stadium.

  22. I still don’t understand why it is the Watson deal has changed the landscape and not the Cousins deal. Wasn’t his deal fully guaranteed when the Vikings gave it to him? And why does one incompetent Cleveland owner set the market for everyone else? There are more other contracts with less than 100% guaranteed than there are that exist.

  23. Could a team fully guarantee years 3, 4, and 5? That way, they tie up cash with the funding rule on the backend. The front end would be guaranteed as a practical matter because who will cut a player in year 1 or 2 right after signing them to a massive contract? On paper and per funding rule, it wouldn’t all be guaranteed, but from a practical standpoint it would be.

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