Extending DeSean And The 30 Percent Rule
Posted by Sam
Some confusing stuff today from the beat guys on whether DeSean Jackson could be extended. The writers seem to suggest it is close to impossible. I'm not buying it. I believe that a creative team can get this done if it wants to.
Under the terms of the CBA, base salaries are limited to 30 percent increases per year. Even at the maximum 30 percent rate, it would take Jackson 4 years just to get his base salary up over $1 million, which is a lot of money to me and you, but is chump change for a Pro Bowl wide receiver who scored more than a quarter of his team's offensive touchdowns last season.
Signing bonuses are exempt from the 30-percent restriction, which means the Eagles could theoretically solve the problem by giving Jackson a ginormous signing bonus. But teams are reluctant to do that because of the language in the CBA restricting forfeiture of signing bonuses if a player gets into Michael Vick-like or Plaxico Burress-like trouble. Not that they expect Jackson to go out and slaughter dogs or shoot himself in the leg in a bar any time soon, but hey, you never know.
"There's really no loophole around [the 30 percent rule]," the league executive said. "The only thing you can use is the signing bonus. But you've got to still maintain some reasonable percentage of a deal. Otherwise, you're putting yourself out there naked. If the guy does something stupid down the line like Vick or Burress did, you're absolutely screwed."
A signing bonus does not count toward the base salary, so the Eagles could theoretically give Jackson a big roster bonus. But if the signing bonus is higher than the base salary, it would fold back into the base salary in the new collective-bargaining agreement.
It isn't just Jackson who we have to consider this rule applying to, it is Kevin Kolb and Stewart Bradley as well, and that could be an even bigger problem. If Jackson is truly unable to get paid this year because the team's hands are tied by the rules in place, so what? In that case it is what it is. For the other two, their deals are up after this season, and risking free agency -- and potentially unrestricted free agency if a new CBA is signed before the free agent signing period is allowed to start -- is clearly dangerous.
Let's try to sort out exactly what the rule is, so that we understand exactly what is possible and what is not. Here is how the NFLPA summarizes it:
30% Rule (Article XXIV, Section 8(b), pages 133-134 and 241)
Renegotiations/extensions entered into in the 2010 League Year of 2009 NFL player contracts may not increase per year from 2009 to 2010 or beyond more than 30% of 2009 Salary. For example, if 2009 Salary is $2m, the maximum Salary available in 2010 is $2.6, 2011 is $3.2m, etc. Salary for 30% Rule does NOT include amounts treated as Signing Bonus or early termination buyout prorations tied to NLTBE incentives (those tied entirely to LTBE incentives are open issue with NFL), but DOES include option extension bonus prorations.
First, understand that the 30% rule isn't anything new. New contracts have NEVER been allowed to grow at more than 30% per year based on the first year of the contract. The change is that now, extensions / renegotiations are pegged to the 2009 value of the old contract. That obviously limits what can be done.
Second, it doesn't really apply to "Paragraph 5 salary" or "base salary". Later in the summary quoted above, the NFLPA defines Salary, which is the way it is defined in the CBA sections that discuss the 30% rule:
Salary=base salary, roster bonus, reporting bonus, signing bonus prorations, LTBE’s and other payments to players.
So the 30% rule salaries we are talking about are defined to be Salary less "Amounts Treated as Signing Bonus" and early termination payments. Those amounts treated as signing bonus are NOT going to include roster bonuses, because roster bonuses and signing bonuses are different and are treated differently.
Finally, I think part of the confusion about this rule comes from why it even exists. The NFLPA quote above cites two sections of the CBA: pages 133-134 and page 241. There is nothing on pages 133-134 that give any indication of why this rule would be applied this way in an uncapped year. The answer comes from page 241:
Section 4. Effect of Early Termination on Player Contracts:
(a) If otherwise in compliance with this Agreement upon execution prior to notice of early termination, a Player Contract may not be found to violate this Agreement solely by reason of a subsequent early termination of this Agreement. For example, a Player Contract that, upon execution, complies with the 30% Rule set forth in Article XXIV, Section 8(b), may not be found to violate the 30% Rule solely by reason of a subsequent early termination, although neither the Player nor the Club may, after notice of early termination of this Agreement, exercise any options, or otherwise exercise rights or take actions that would, upon exercise or implementation, cause the Player Contract to violate the 30% Rule.
It's confusing language, but the interpretation seems to be that a renegotiation of an existing deal is considered "taking actions" that would cause the contract to violate the 30% Rule. So it isn't really that base salaries are limited to 30% increases, it is that you have to keep the renegotiated deal, when considered in connection with the original deal, from violating the 30% rule.
But here's the thing: rookie contracts have always been very limited in just this way. You are stuck with a relatively small rookie cap, which limits the total first year cap number for all your rookies. And then rookie salaries are governed by a 25% rule -- similar rule, just 5% lower. But somehow, teams are still able to give massive contracts to first round draft picks. They give out bonuses and escalators that are classified as "Not Likely To Be Earned" but in fact are virtually certain to be earned. They give out large signing bonuses to rookies.
So is there a way around the restrictions for a creative team? Absolutely. Yes, it is difficult, but come on. If you can give out those things to rookies, what is the hesitation about giving them to your actual, proven stars? Heck, this is the team that came up with Westbrook's immensely complicated pay raise in 2008 despite huge restrictions. There is no reason that they can't get any deal done that they want to.
What cannot be done is front-loading those deals to take advantage of an uncapped year. So to the extent that there are players whose deals will allow for such a structure, those would take priority. DeSean Jackson, therefore, is not necessarily a priority, whether or not he "deserves" a raise right now. Kolb and Bradley, on the other hand, may be different stories altogether.
By the way, the Redskins are brilliant. They figured out a way to stuff a ton of Albert Haynesworth and DeAngelo Hall's money into this uncapped year. Now that's creativity. You may not like the players, or the real price paid for them, but those guys won't be clogging up their cap once it comes back thanks to this move.