Quarterback Contracts - Fully Guaranteed or not?

I think most people would support someone else trying to earn as much as they can with their talents while at the peak of their performance-level, but I think there's two powerful reaons why Deshaun Watson's 5-yr, $230m fully guaranteed may continue to be an outlier, at least in the near term...

1) The Salary Cap. There's are probably several reasons why the NFL is far and away the most popular sport in the US, but the "allure" of parity and that everyone is on an equal playing ground in terms of player spending is what keeps bringing fans from Jacksonville, Cleveland, Detroit, Atlanta and NYJ to keep following their teams, watching their games and spending their money on 'em - that same hope that fans of New England, New Orleans and Tampa Bay had in the 1980's when they were perennial bottom-feeders that dreamed of winning a Super Bowl, only for it to turn into reality in the 2000's. While MLB has the occasional KC Royals World Series story, it's still dominated by the top clubs with the highest payroll and small-market teams generally have no shot.

Just like social media companies use the dopamine-driven "allure" of "likes", "subscribes" and "followers" to keep people coming back for more, the 30+ NFL billionaire owners can keep US audiences coming back with that "allure" of parity and your team is just a short time away from winning that Super Bowl...

...and likewise, they know they can't sell that parity as much if the current QB's start eating-up the team's valuable salary cap, because the fear isn't the QB's, it's the other positional players that see those QB guaranteed contracts and start to demand fully guaranteed contracts, too. And just like we've discussed time and time again on Purple Pain, teams don't win Super Bowls when QB's are taking up a massive % of the salary cap.

From a Spotrac article earlier this year (link) - they noted the %'s of QB's contracts with Super Bowl QB's since 2000 and no QB won a Super Bowl that took more than 12.61% of their team's salary cap. In fact, no QB who went to the Super Bowl took up more than 18.88% of their team's cap space that year. For reference, if the 2023 Salary Cap is projected to be $225m, then Deshaun Watson's $55m 2023 cap hit will be taking up nearly 25% or 1/4th of the Brown's 2023 cap space...



2) The NFL owners have the power. As much as we'd like to think otherwise, the 30+ billionaire owners of the NFL pretty much shape what the NFL is and what it will become. And we've seen their power collectively wielded time and again, even as recently as this past offseason when one of the top Centers in the NFL in 2021, JC Tretter, didn't receive a phone call or physical to come in for a tryout, even when several teams had injury issues in the preseason. Some people can point to Tretter's bad knees, but he contends it's not a problem for him playing (he did so at a high level in 2021); rather, it's because he is the NFLPA President that has spoken publicly in favor of guaranteed player contracts, something those 30+ billionaire owners want to avoid.

Ravens owner Steve Bisciotti said the quite part out loud in late March 2022 after the Browns inked Watson's deal, "To me, that's something that is groundbreaking, and it'll make negotiations harder with others." While many will say that he only upset because it would make negotiations with Lamar Jackson's contract difficult, I'm sure that behind the cigar-filled rooms of the NFL Owners Meetings, all of them were irked with Browns owner Haslam over that deal. Spielman echoed that sentiment in his article: "The danger is that if you fully guarantee a quarterback contract, a superstar player at a different position is probably going to want a fully guaranteed contract."

Once you start going down the slope of fully-guaranteed QB contracts and then WR fully-guaranteed contracts, and then all the way down to Right Guard fully-guarnteed contracts, the ability to manage the cap and cut losses (ie, bottom line cash) becomes more difficult.

Is it best for ALL players in the long-run?
I'd like to point to something else that doesn't get nearly as much attention as it should when it comes to player salaries and fully guaranteed contracts - even from the NFLPA President JC Tretter: that an estimated 80% of retired NFL players go broke in their first three years out of the League, per a 2015 Forbes article (link). While you might think that fully guaranteed contracts would solve that or even cut into that % significantly, I'm not so sure. 

There are probably many reasons why former players go broke so quickly once their playing days are done, but I think one big reason that is more and more prevelant these days is the lack of preparation for life after football. In that same Forbes article referenced earlier, it mentions the average span of an NFL career is less than 4 years and young, elite athletes currently entering the NFL with wide-eyes see themselves playing for a long time and making millions...and how much wider are their eyes going to get if they know their contracts are going to be fully-guaranteed? Yes, the NFL and the NFLPA have put resources in place for rookies entering the league to plan out their careers - including life after football - but many of those players blow-off the Players Symposium and just want to get into Training Camp and into regular season games to start chasing that pot of gold, not thinking about injuries or what they're going to do in less than 4 years, which just so happens to be the amount of time they're coming off their initial 4-yr rookie deal and about to sign that extension or hit the free agent market. Just like social media users driven by the allure of "follower"-fame and NFL fans drawn to the dream of parity and their team holding the Lombardi Trophy, young athletes are driven to the allure of the almighty dollar and that dream of that fully-guaranteed contract after they get done playing on their 4-yr rookie deal may not be in their best interest when many of their careers won't even last long enough to hit the open market, and without the plan of life beyond football, they become another statistic on former professional athletes that go broke...

Conclusion
While many thought that Deshaun Watson's 5-yr $230m fully-guaranteed deal with Cleveland would usher-in a new era of fully-guaranteed contracts in the NFL, that hasn't been the case. Matthew Stafford, Derek Carr, Kyler Murray and Russell Wilson have signed large contract extensions with their teams that were not fully guaranteed. Both Murray and Wilson were given contracts worth more than Watson's, but neither could match his guaranteed money. 

Insted, those contracts work out a bit closer to how Kirk's 2018 3-yr contract was: the fully-guaranteed money portion likely lasting about 3 yrs before the team can make a decision to release the player and reduce a significant portion of that contract from their books. 

I think you're likely to see that same model in the near term - either fully-guaranteed for only 3 yrs or a large extention that alllows the team to get out from under it after 3 years - before you're likely to see the Cleveland/Deshaun Watson contract model become the precedent. The Kirk Cousins and other QB franchise QB deals made this offseason give players and teams a leve of flexibilty: for players, a shorter deal allows them to possibly enter the market again to take another bite of the free agent apple if they choose or think about if they want to keep playing (possibly with their life after football in-mind), and for NFL teams it gives them some flexibility of not being completely tied-down to just that one player taking up an unhealthy portion of the teams total cap for a significant chunk of years...

And if that shorter, 3-yr model becomes the precedent - and going by the QB contracts signed after the Watson deal it is - perhaps Rick Spielman of all people could be remembered more as the trendsetter, and not Deshaun Watson...

"Hopefully, he does have an insurance policy that will cover him for future earnings if he does have a catastrophic injury like I experienced when I saw Teddy Bridgewater go down in practice."

Wait, what catastrophic injury did #Rick4Life experience when Teddy went down?