by Jack Bechta
June 02, 02010
Have you ever wondered how negotiations go for an NFL draft pick? Here’s a peek:
The initial conversation usually starts out with the usual small talk, which consumes about 10 to 15 minutes. The agent tells the cap manager about the last great free agent deal he did, what a “great kid” his client is, and what plans he has for his summer vacation.
The cap manager throws out a few lines about how well things are going around the front office this year. If it’s a new gig, we hear how much better it is than the last dysfunctional one.
The agent may open up with something like, “When do you anticipate getting your deals done? Do you have a time line?” The cap manager may reply that he/she would like to get some deals done before he goes on vacation, usually at the end of June for a week or two. Then, one or the other steps up and says, “Let me put something together for you.” If the agent says it, he usually waits a while to send an offer. However, the cap manager may be more aggressive and send one the next day.
To date, there have only been 14 contracts completed; a 3rd, a 4th, three 5ths, four 6ths and five 7ths.
Props to cap manager Cliff Stein and the Bears for breaking the ice. The majority of agents and cap managers don’t like to be the first ones into the pool, because they take the risk of over- or undershooting the market. The first deals done will create a floor, average and/or ceiling for the rest. Thus, everybody is watching. If the agent agrees to a subpar deal, the agent community will let everybody know it. If the cap manager overpays, he will put pressure on the rest of the teams to do so, and he will be whispered about in front offices as the guy who screwed the other 31 teams.
The consensus is that the salary cap this year was increased at a rate of 4% over last year’s rookie pool (the finite amount of money allocated to each team dedicated to rookie contracts only). Therefore, every agent is trying to get his client a similar increase over last year’s deals. The increase from year to year is not uniform for each round, however. First round salaries will easily exceed 4%, while the latter rounds could be as low as 2.5%.
Here is the funny part. Experienced agents, myself included, and well-educated cap mangers are haggling over a few hundred dollars for draft picks in the 4th round and lower. No kidding! For example, if a 5th round slot had a signing bonus of $200,000 in 2009, the agent might believe it should be increased by 3.25% to $206,500 for 2010. Meanwhile, the cap manager believes the bonus should only increase by 3% to $206,000. The difference is a whopping $500. Even if the agent and cap manager agree on all the other contract components, such as term, injury splits, credit season language, escalators tied to the number of off-season completed workouts and play time, etc., the deal could still take months to get done. So, believe it or not, $50 to $500 dollars can hold up a late-round contract for weeks. The factor that finally gets the deal done is usually molded by the comps agreed upon in the slots located above and below where a given player was chosen.
In rounds 2 and 3, the spread between the agent and cap manager averages between $1,000 and $20,000. In the 1st round, the discrepancy usually ranges from $10,000 to $250,000, and the first 10 of those could range between $1 and $5 million. However, there are a lot more moving parts with these deals than in the later rounds, such as the amount of guaranteed money, length, and voidable years based on production, and coming to an agreement on all of them can be much more challenging. An agent once held a Packers first round draft pick out for days over just $10,000.
The point is that what is being negotiated is not dollars but percentage increases over the previous year’s deals. Whether .005% is equal to $50 or $50,000, it will be haggled over right until, and sometimes past, the camp reporting deadline.
I find myself chuckling now and then during a negotiation when I turn down an offer that is short $500, but I keep fighting for it if it belongs to my client.
I know to the average Joe, the haggling may appear greedy and childish on both sides. However, it’s nearly the same as a teachers’ union or Boeing workers threatening a strike while fighting for an extra 25 cents per hour. The biggest difference is that these NFL deals are done one by one.
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