Julio Jones Thread: Traded to Tennessee

[skip]

Also there is almost no other labor market that operates the way pro sports do, it's not really possible to compare this situation to other employer employee relationships.

You're right. In other markets there is no guaranteed money in contracts. Nor is the labor base making as high a percentage of the company revenue.

[FantasyFreak]

Also there is almost no other labor market that operates the way pro sports do, it's not really possible to compare this situation to other employer employee relationships.

You're right. In other markets there is no guaranteed money in contracts. Nor is the labor base making as high a percentage of the company revenue.

You also get to choose where you work. If you are the best law student in the country, you don't come out of law school and get forced into working for the worst law office in the country, either.

[ArrylT]

Also there is almost no other labor market that operates the way pro sports do, it's not really possible to compare this situation to other employer employee relationships.

You're right. In other markets there is no guaranteed money in contracts. Nor is the labor base making as high a percentage of the company revenue.

https://smallbusiness.chron.com/percent ... 14254.html

Says there most businesses pay 40-80% of gross revenues, and salaries alone can be up to 50% of an operating budget.

I believe 47% of "defined revenues" are what players get. For example franchise fees or relocation fees would not be included.

And thats assuming you can trust them

https://thinkprogress.org/nfl-reportedl ... 3c3200501/

[thebeast]

Again, if one party can do it (terminate a contract), both should be able to, or neither.

We will have to disagree. If your method is allowed, the league would be utter chaos. Players would be constantly jumping ship to go to new clubs. That's unacceptable. I would never want to see a system that allowed the player to just rip up their contract because they are unhappy.

I think there are issues with the current system, but I don't know the solution. Fully guaranteed contracts are reasonable if and only if it includes incentives (and penalties) for performance.

The player can't terminate the contract, but they can choose to not play and sit out when they think that suits them, there is nothing in the contract or CBA that disallows that. However, there are very few players who have the power to hurt their team by sitting out.

[thebeast]

Also there is almost no other labor market that operates the way pro sports do, it's not really possible to compare this situation to other employer employee relationships.

You're right. In other markets there is no guaranteed money in contracts. Nor is the labor base making as high a percentage of the company revenue.

https://smallbusiness.chron.com/percent ... 14254.html

Says there most businesses pay 40-80% of gross revenues, and salaries alone can be up to 50% of an operating budget.

I believe 47% of "defined revenues" are what players get. For example franchise fees or relocation fees would not be included.

And thats assuming you can trust them

https://thinkprogress.org/nfl-reportedl ... 3c3200501/

While I won't get into the details of my businesses, we target labor to be managed at a max of 45% of revenue.

[Ice]

Also there is almost no other labor market that operates the way pro sports do, it's not really possible to compare this situation to other employer employee relationships.

You're right. In other markets there is no guaranteed money in contracts. Nor is the labor base making as high a percentage of the company revenue.

You also get to choose where you work. If you are the best law student in the country, you don't come out of law school and get forced into working for the worst law office in the country, either.

That said the best law student in the country would love to get a 4-year contract worth $32.68 million FULLY Guaranteed with $21,849,440 upfront to move to Cleveland. Who wouldn't?

[ArrylT]

Now I want to go watch The Firm!

[Vcize]

Think of them as contracts for a certain number of years (the part that is guaranteed) with team options afterwards.

As for players, I think they've been on the losing end so long, they simply don't know how to win. And with the continued, dramatic increase in the salary cap, ANY player who signs a contract for more than 2 - 3 years is a fool. The only way a longer contract would make sense is if the additional years are guaranteed.

If we are honest here, there's only one big reason why teams don't exercise their "options". That's when a player has under-performed for whatever reason. In that instance, it makes no sense to pay more than market value for that player at that time. On the flip side, if a player maintains their form, teams typically get a nice discount (in terms of market value) if they exercise their "options". See Jones, Julio as a great example. His option years were pegged at 2014 (or 2015) market values. Adding an inflation clause (linked to the salary cap) to those "option" years doesn't really help or change the dynamic. Teams would still get the flexibility to retain performing players and cut/re-negotiate with under-performing ones.

Ultimately, it is up to players and agents to get rid of these "team options", or perhaps get half the options guaranteed.

Or just don't sign for 5 years if you only want to be locked up for 2. It's typically the players that seek out longer term deals.

[Vcize]

I used to agree that players should honor the contract they sign for. That's why they have a contract right? But then I realized teams aren't honoring the contract either. As soon as they are unhappy with it they will cut the guy to save money. They have a built in mechanism to minimize risk after the first couple years of the contract - the non guaranteed portion with zero penalty for cutting the guy. With that in mind there is no mechanism for the guy who feels he is outperforming the contract to respond in kind. Thus he has to hold out.

It's one thing when a guy signs a deal while he's a 2nd string player and then he turns into a pro bowler but is still stuck on the backup deal. Part of me says he shouldn't have signed long-term and locked himself up at backup prices to protect himself against injury if he didn't want to honor it, but I can at least partially understand that he's performing much better than he did when he signed and wants to be compensated appropriately.

But that's not the case here. Julio's production, if anything, has decreased in every category since he signed his deal. He's not out performing the quality he was assumed to be giving at the time he signed his deal.

[Vcize]

@skip and lotto:
I see where you are coming from. However these guys don't have as much choice in how their contracts work as we might like to think. It sounds simple sign a short contract sure, but it is certain that the guaranteed money will decrease somewhat proportional to the length of the contract. This is just how teams force NFL contracts to work. Then we are in the same boat.

Julio could have signed any length contract he wanted. It's not like Atlanta was going to let him walk to another team because they could only lock him up for 3 years.

You either sign for longer with a bigger guarantee that mitigates the risk, or you take the riskier approach with less guaranteed money but more total money because you get to sign a new deal in 3 years. It's the same decision that many of us make every day. Risk with bigger payouts vs. safety with lesser ones.

Julio essentially chose the less risky path, a longer deal with bigger guarantees, and now that he's gotten through the guaranteed portion without getting injured he wants to reneg on his part of it and retroactively choose the path with more money. It's like telling your 401k manager to choose the safer less aggressive investment options, and then when the market does really well for two years telling them that you instead want the money that the aggressive option would have earned over the last two years.

He's being a chump.

[Csl312]

I get what you are saying about the risk VS reward
But that's the whole conversation right? Team management is in a sense colluding with other teams to make the normal NFL contract one with a disproportionate amount of risk borne by the player. In the end the only way to mitigate risk from the player perspective is taking longer deals where you get more guaranteed. The teams have built in risk mitigation by restricting the amount of money they guarantee based on length of contract. I would not be surprised to see ATL let Jones hold out for a whole year, where they wouldn't have to pay him, before giving him a 3 year fully guaranteed contract. They don't even risk losing the player in that situation because he is still under contract when he ends his holdout.

I think your analogy to investment is good except that the revenue for a team depends on the players just as much as the players are getting paid by the team. My real world activity has no impact on my investments.

[Vcize]

I get what you are saying about the risk VS reward
But that's the whole conversation right? Team management is in a sense colluding with other teams to make the normal NFL contract one with a disproportionate amount of risk borne by the player. In the end the only way to mitigate risk from the player perspective is taking longer deals where you get more guaranteed. The teams have built in risk mitigation by restricting the amount of money they guarantee based on length of contract. I would not be surprised to see ATL let Jones hold out for a whole year, where they wouldn't have to pay him, before giving him a 3 year fully guaranteed contract. They don't even risk losing the player in that situation because he is still under contract when he ends his holdout.

I think your analogy to investment is good except that the revenue for a team depends on the players just as much as the players are getting paid by the team. My real world activity has no impact on my investments.

The risk/rewards applies both ways to a large extent. It's basically the opposite, really. By signing the player to a longer deal with bigger guaranteed money the team takes on more risk of a catastrophic injury or underperformance by the player.

If Julio Jones had a career ending injury in week 1 after signing his new contract they still would have been on the hook for all the guaranteed money. The same is true if Julio turned into a pumpkin performance wise a la Joe Flacco or Braylon Edwards.

For Julio the long contract with more guarantees is the safe option. For the team the long contract with more guarantees is the risky option, because they could have wound up paying Julio $47 million guaranteed or whatever it was for literally nothing if he got hurt right away or underperformed. The safer option for the team would have been to sign him to a shorter deal where an injury or underperformance costs them less, but they have him locked up for shorter.

The team chose risky, Julio chose safe, and now that the safe time has passed Julio wants to go back and switch it. This is no different than if the team had signed Julio to the long 5 year deal with big guarantees and then if Julio tore his achilles in week 1 them saying "oh wait nevermind, we want to do the 1 year deal with little guaranteed money instead, we're not going to pay you that $47 million".

Also as an aside, cutting players isn't exactly just a get out of jail free card beyond the guarantees. The team still pays a penalty for doing it via dead cap space so that does protect the player somewhat. They have to be REALLY underplaying their contract value to be cut because the teams have to weigh the player's performance against not just what they are paying the player, but what they are paying the player compared to how much they'll still have to pay to not pay the player. That's just an aside though, the main point is above in that the teams certainly have their risk vs. reward choice when negotiating contracts as well.

Being able to cut players is certainly an advantage in teams vs. players, but not to the extent it's being made out here. Ultimately it is people's natural inclination to play it extra safe even when the EV metrics say it is a poor play that is causing players to sign these bad deals to protect themselves. They all negotiate on the basis of what happens if I break my neck tomorrow, when that should be a much smaller consideration (especially for someone like Julio who was already a multi-millionaire even if he never made another dollar).

[Csl312]

That's a fair point. I agree that teams take on risk with whatever guarantees they give out. Dead space can be avoided depending on how and when the player is cut. I think where we will probably have to agree to disagree is that the level of risk the team takes is comparable to the players. But I will say I was probably overstating the case for the players a bit.

[Pullo Vision]

We will have to disagree. If your method is allowed, the league would be utter chaos. Players would be constantly jumping ship to go to new clubs. That's unacceptable. I would never want to see a system that allowed the player to just rip up their contract because they are unhappy.

I think there are issues with the current system, but I don't know the solution. Fully guaranteed contracts are reasonable if and only if it includes incentives (and penalties) for performance.

I'm curious about your view on teams not honoring the contracts they chose to sign, especially given your apparent moral viewpoint about players keeping true to the contracts they sign. Seems to be a disconnect there.

The idea was both parties or neither. Since you see both parties have that power, what about neither? How would league business change if teams weren't allowed to rip up a contract for whatever reason they gave/fabricated, if they had to honor contracts thru signed to the end?

Also curious about your view on a player putting in numerous player options to mimic the outs a team has in a contract. Like adjusting the portion of a contract that's guaranteed, player options are an accepted tool within the current system.

I don't think the issue should be "black and white" as in "both or neither". Are you suggesting that in business that an employee should have the same bargaining power as the employer at the table? I don't. If I'm the owner of the business, I'm paying for performance. If my employee fails to live up to their end, I should be able to terminate. I want my team to have the ability to end contracts rather than be saddled with players undeserving of them.

The player's bargaining chip when negotiating a contact is guaranteed money and player options. If they did an effective job in negotiation, they got as much as they could in those guarantees so there should be no issue if a team terminates before the contract end - the player gets that guaranteed money regardless. Ideally they also negotiated player options, though they don't happen as often. I'd suggest the issue at play is the length of the contracts being accepted. There already is accountability on the part of the team to pay out all of the guaranteed money.

In the real world, people do have the same bargaining as an employer- an employee can choose to leave at any time (though giving notice is preferred by the other party) and an employer can terminate employment at any time, potentially including a severance package.

Why would regular employees have this right but not NFL players? Well, I'd think the fact NFL players sign contracts would be a significant factor. That fact, and there being a labor union, makes the labor different than what the average person experiences.

You'd previously introduced one apparent inconsistency, and now another-
1- How can you take a moral stand against players not honoring their contracts (by holding out) but not having a problem when a team doesn't honor a contract they signed by cutting that player? A contract is a contract, and must be honored to the end.
2- I can see your point about teams wanting to cut underperforming players. What mechanism do you think should be available to players if their performance outstrips their pay?

[Pullo Vision]

Vcize, one of the interesting trends among players has been for them to sign shorter deals- Cousins showed how it could work, and Julio and Rodgers showed how long term deals could be bad for the player.