Using the Dreaded “C” Word …
Collusion.
While the word had been used recently in connection to Super Team and LeBron’s taking LeBron’s LeBronly talents to South LeBron with Bosh and Wade, what about the NFL owners? Are they colluding when it comes to record breaking contracts?
While players like the Jets Darrelle Revis are being asked over and over and over again about the status of his contract, seemingly in every interview … what about team ownership?
Look at the names right now of guys who are seeking new long-term contracts, and have been unable to get them, just two weeks away from the start of training camps around the league (the links go to analysis/news).
Peyton Manning (4 time MVP)
Tom Brady (3 time SB winner)
Darrelle Revis (Robbed of 2009-10 DPOY)
Chris Johnson (2,000 yard rusher)
Those are elite guys … so what gives?
Why would teams risk relationships with talent of that level? These are cornerstone guys for their respective teams. Why is ownership is letting them stew over new deals that would have been long done in any other year?
My conspiracy theory? Teams have circled the wagons.
With CBA uncertainty, it would make sense that owners don’t want to make any record breaking deals right now, in terms of guaranteed money. What happens if a team creates a huge contract and then some new cap rule that they didn’t foresee comes into play that severely hamstrings them for years to come? More importantly, would teams want to pay out a huge bonus this year to a guy who will be locked out in 2011? Not likely.
To be fair, there have been some other well known players who were under contract and have gotten serious multi-year extensions done this offseason:
Patrick Willis (All-Pro, DROY)
Brandon Marshall (2x Pro Bowler)
Darryl Tapp (I got nothing)
Anquan Boldin (OROY 3x Pro Bowl)
D’Brickashaw Ferguson (Pro-Bowl)
Let’s rule out Marshall, Tapp, and Boldin, because they were traded and were given new deals as contingencies to the trade. That leaves just Brick and Willis as far as my research department (Google & I) can tell.
Willis’ deal has made him one of the highest paid linebackers in the game, and gave him $15 million up front with an injury kicker next year for about $5 million. So … a good deal for Willis, but not wildly out of character with the league for a player of his stature. Bart Scott was set to make $13.5 million in guarantees in his first two years, so Willis’ deal looks right for a player at his age and ability.
Since then, Brick has had the only other major deal, and yes, while Brick signed a big deal, let’s be clear that his was a good one for the Jets to get done. Brick was willing to leave some, no … a lot of up front guaranteed money on the table to get re-signed, to his credit. He’s still going to be a very wealthy man, but knowing a little about Brick, this doesn’t seem out of character with the lineman – and to be fair, he’s not regarded by many pundits as the best LT in the game, though he’s really good.
So, while there are some deals are getting worked out with players, it’s would appear that owners are hesitant to give the very best players the very best deals.
Which then begs the question … is there something more behind this? Are the owners … for lack of a better term … closing ranks?
Economic collusion is defined as (emphasis mine):
In the study of economics and market competition, collusion takes place within an industry when rival companies cooperate for their mutual benefit. Collusion most often takes place within the market structure of oligopoly, where the decision of a few firms to collude can significantly impact the market as a whole. Cartels are a special case of explicit collusion. Collusion which is not overt, on the other hand, is known as tacit collusion.
You know once the first deal of one of those players gets done, the pressure to follow suit for other teams will become extremely high.
So is the ownership bloc in the NFL, and in this particular subset of teams with players like this (an oligopoly, if you will) being properly called out about getting deals done? Is management subjected to the same level of scrutiny that their players are? Is management or the league office being asked tough questions about why not one of those guys has gotten their respective deals done yet?
Of course management wouldn’t say “yes, yes we’re colluding!!!” and I know that even asking such questions in the public space can create righteous outrage from journalistic bastions like Fox Sports shoe-shine boy Ken Rosenthal … meh.
And it’s just my opnion, but until I see otherwise, I have to think that there’s something rotten in the state of Denmark (no offense NewYorkJets.dk!) and I wouldn’t be surprised if there’s a wink-nod agreement to slow play these contracts among owners.
28 Responses to Using the Dreaded “C” Word …
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Vin R says:
John Nash was right!
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Soooo that’s what it’s all about. I vote on collusion as well with the unsettling league contract situation as a prime motivator. Once that deal is done, the money gates should open. Or not, greed being what got the owners to be owners in the 1st place with inheritance a close second.
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greene says:
but…. can 32 distinct teams really be considered an ogliopoly?
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Harlan Lachman says:
If one defines collusion as bargaining, as when the current CBA was negotiated, then one has a case.
But if one looks at the 30% rule, other restrictions on signings that I am sure Bent can restate for the nth time, the stupidity of signing contracts with huge payouts with a lock out next season is all but assured, and the risk of signing a deal without knowing the fine points of any CBA negotiated for the 2011 or 201? season in the face of or after the lock out, collusion is not needed.
Business owners know doing mega deals in this context makes no sense without colluding — except as you point out to make a trade or if the player leaves major bucks on the table. That is why things were set up as it was (along with the change from 4- 6 years for UFA and the 30% rule).
The owners will do very well this year and since most are morons, they will likely kill the golden goose in the hopes of keeping their bigger share of the pie.
harlan
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Le' Sean Roberts says:
What are the possible parabolic behaviours I’m seeing here labeled ATC and MC? Get a better geometric visualization? You don’t makes proofs by geometrical display, Math 101………
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Bent says: I wouldn’t rule out teams having talked amongst themselves, but I think any smart business mind might come to the same conclusion anyway.
You’re right about the unwillingness to pay big sums upfront with an impending lockout. You give someone a (say) 25m bonus as part of a 5 year contract, but then only end up having them play 4 years (because one is locked out), you have effectively wasted $5m.
Then, you have the 30% rule, which in many cases (but not Brady/Manning) makes it impossible to create a contract of sufficient size without guaranteeing a ton of money upfront.
Finally, there are rules restricting how much salary you can fully guarantee, which would ordinarily be the compromise position. Only teams with left over cap space from 2009 and before can do this (ie not very many).
You are also correct to point out the uncertainty with the new CBA. Teams are reluctant to do deals with guys whose rights they may control anyway, because nobody knows who will be a RFA when the new cap returns. If Team A does deals with all those guys now and Team B waits, then Team A is at a competitive disadvantage because their rival retains equivalent players at a lower cost.
So, while “collusion” is a bit conspiratorial for my liking, you have outlined the main reasons why teams have been turned off from doing these kind of deals and it speaks to the importance of a guy like Willis that he got his done anyway and the level-headedness of a guy like Brick that he accepted a deal within those constraints. Whether teams reached the same conclusion independently or by putting their heads together is almost irrelevant…that’s the landscape.
Other big deals off the top of my head – DeMeco Ryans, Jahri Evans.
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I think its probably tough to prove collusion on the part of the owners. It may exist. It may not. Im sure the league will argue that it was pretty clear from early negotiations that 2010 was going to be uncapped but that did not stop the teams from extending the terms of Eli Manning, Phillip Rivers, Greg Jennings, Brent Celek, Kevin Kolb, DeMeco Ryans(though he was this year I believe),
I guess you would really have to go team by team look at their prior negotiating history and see what changes there are. In the Titans case I think they are usually regarded as very stingy with extensions so CJ may not be that unique. Our team is pretty stingy as well and Revis does have 3 years left. Mangold is really the guy that would be looked at. San Diego would be a team to look at as you think they would extend Jackson and McNeil. Id think Manning is a curious case as well.
Brady Im not so sure about. Again its an organization that is notorious for watching costs and you have to ask yourself was Tom Brady really the same player last year? Clearly early in the season he was not. He played better late, but was a no-show in the playoffs. I think a team like the Pats wants to be cautious here and see him again this year before they pay him what he would have earned pre-injury. I doubt they would ever part ways with him, but they are a very tough team to deal with
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interested jet says:
This is the old chicken/egg argument, but it’s defifnitely collusion nonetheless !!
Wether it’s collusion because/in spite of the CBA, really doesn’t matter. I happen to believe that it helps the owners position either way. The owners are smart and some (Jets) are capitalizing on this to the max.
The owners knew last year the CBA was expiring this year but still issued MEGA multi year contracts with Tons of up front/guaranteed money.
The fact that record contracts have been issued this year proves that clubs position themselves in which side of the argument fits them the best !!
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Jeff says:
Yeah, NE and Indy are very tough negotiators. Which is strange considering the success they have attained recently and the money they have made in the process. Teams like that don’t dole out cash to every contract year player unless he is really good.
Yeah, I am surprised though it took this long for this post to come up though. I knew for certain that these huge contracts were not getting done for a reason. The NFL is an “oligarchy” sure they are separate “companies” but they operate under the same system and restrictions. I wouldn’t be surprised if all owners are meeting under closed door and discussing this as we speak.
Adam Smith needs revision, John Nash is right
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interest jet,
hmm… isnt the old chicken/egg argument a religious philosophical view? you know, the whole did god create man, or was man evolved from a simple orgasm?
haha, i’m just bustin’ ya balls.
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Mike says:
That’s not the “C” word.
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Jason says:
Here’s what I would do if i was Revis’ agents:
Screw the typical NFL negotiation playbook. 1) You know and the Jets know they have to pay you and keep you longterm, 2) the Jets showed fans and players with the D’Brick contract they will open wallets for their guys (not to mention open wallets to sign free agents) 3) you made your point during the last 3 months you want a rich deal, you deserve the deal.
I say show up to training camp and don’t hold out. Keep saying what you said at Espys: My agents are talking to the Jets, when they tell me something, i’ll tell you. Leave it at that.
Revis HAS to show up to Camp: 1) he is a committed and hard worker and takes pride in his craft 2) HBO Hard Knocks. He needs the increased exposure to make him even more marketable long-term (Think Deion, who played in an era where you could take your helmet off and the League hadn’t cracked down on expressions of individualism.
The Jets will pay you, you can squabble with them PRIVATELY thru your agents over money. Go public and Tannenbaum will clamp down.
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mole57 says:
interested jet and greene,
Actually the chicken/egg argument has been solved. (It’s chicken.)
http://www.msnbc.msn.com/id/38238685/ns/technology_and_science-science/
Looks like we need a new metaphor.
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mole57,
haha.
but was the first chicken actually a chicken?
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And if no one was there to hear it, did it make a sound?
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juunit says:
I think they have allowed contracts to get way too out of hand already. It is completely ridiculous that these athletes make so much money and owners should’ve stopped it before it got so nuts. And before you say that the owners don’t deserve their own money and the players deserve a piece of the pie, just remember that the owners bought the teams, for lots of money. It’s like owning any business. You need employees to survive, but you don’t pay them king’s ransoms to work for you because they’re still your employees.
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does it sound like a chicken?
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Davi says:
The financial model for signing players is something like this:
1) Player “A” get made the highest at his position by a team
2) Player “B” has similar stats, pro bowl appearances, etc and is up for a contract
3) Player “B” demands more than player “A”, and ultimately gets a similar deal
4) Rinse, repeat for the approx 14-20 positions on the fieldIn a microcosm, making a player the highest paid might be ok, because a single team doesn’t have to worry about breaking the bank on a number of players.
In general, though, it makes the system as a whole unbearable. The starting point for negotiations at each position is based on the highest paid player at that position. Classic example: Revis. Worth $15 million? Only if you think a number of CB’s earning 10-15 million are worth their salaries.
There’s another word for the current “collusion” by teams: “Fiscal Prudence”. You know, that thing we all do, at home, when we need to.
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Davi,
no CB’s are worth 10-15 million. that’s why no CB’s other than Aso are actually making more than 10 million a year.
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greene/mole57:
Leave up to Brian Williams and NBC to obfuscate even science !!!
Reporting that a definitive answer was found by the Brits (right Bent?) to the age old philosophical chicken/egg question, Brian Williams ended the report with a question; suggesting that the Brits have no answer to where the chicken came from !!
Great stuff and on par for NBC !!!
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Bent says:
*shrugs*
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@Greene – you’re right (Although, I’d also argue that no CB is worth 10 million either – with Asante Samuel being Exhibit A!)
Still, how’s it going to be, that the madness ends? Will Revis end up signing (somewhere) for 9 million? Doesn’t sound like he’s ready for that. It doesn’t sound like the leagues ready for that, either.
Look at the Logan Mankins situation, the Patriots “low balled” him at something like 6 million a year, when Jahri Evans is getting closer to 8 million. Think there isn’t a team in the league that would pay Mankins the 8? And that just perpetuates the problem. Although, I suppose that’s the argument against collusion, isn’t it?
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billvv says:
A chicken is an eggs way of making another egg.
Playing by the rules, the CBA, is not collusion even when all 32 teams agree to do it. It requires a concerted effort to get around the rules, which has not been shown to be the case.
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I blame the problems on a new CBA, Revis’s contract, global warming all on Al Davis. That guy should be sent to a mental institution at this point
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But Jeff, global warming isn’t real… it isn’t any warmer outside! Oh wait…
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viguy007 says:
If I were Revis, you pay me less then 10% of the already set market value for the best CB, I play at less then 10% of the effort put forth by the best CB in football last year. I get a lot of headaches and am dizzy much of the time. For one Million, I am not going to expose my body to any danger. The next 2 years thereafter I will play my best for my guaranteed 20 million, and then I will test the free market, hoping Al Davis sees my real value.
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Bent says:
Viguy – if that’s even a possibility, you can see why teams would be reluctant to pay out big guarantees to players.
Revis’ problem is that he is characterizing Asomugha’s deal as 15m a year, when that’s not realistic. 15m a year does not set the market:
1. It’s a short term deal. Over the six year period that Revis is seeking a deal, Asomugha only averaged 11m.
2. That’s assuming he’ll get the non-guaranteed 17m next year. He won’t. This renders the average even lower.If I’m Revis, I want to go to the hall of fame. That might not happen on the Raiders if they are going to continue to be a lowly team. His endorsement opportunities might also dry up, so he’d end up with less money.
I’ve heard a lot of talk already about Revis’s camp and Jets ownership carefully watching the Manning contract process, so even if no collusion is at foot (if you can actually believe that), these large-money deals in a testy financial year are wholly tied to one another.
Heck, you could ctrl+F and replace “Darrelle Revis” with “Chris Johnson” and it all starts to sound the same before long.