Milwaukee Journal Sentinel - Packer Plus
Silverstein: Uncertainty about season, salary cap likely holding up David Bakhtiari, Kenny Clark deals
Packers will be waiting with season in limbo
The entire 2020 NFL schedule isn’t the only thing COVID-19 is threatening to curtail.
With so much uncertainty over whether the league will be able to pull off a season, a lull in negotiations appears to have taken hold between players who are scheduled to become free agents next year and their clubs.
The contract extension game that generally heats up in the summer and then near the end of the season has produced a couple of early deals, but for the most part agents are finding that teams are taking things slowly.
In the Green Bay Packers’ case, the list of 2021 free agents includes stalwarts such as left tackle David Bakhtiari, nose tackle Kenny Clark, running back Aaron Jones, center Corey Linsley and cornerback Kevin King.
Bakhtiari and Clark are in line for megadeals that will put them at or near the top of their positions for average yearly pay. Jones had a breakout season last year and could be an attractive free agent, while Linsley could start for most any team. King could make some money if he stays healthy this season.
But there’s a question teams face a month before the first game is scheduled to take place: Why commit heavily now to a future free agent when there’s a chance the entire season will be canceled?
With revenues expected to be cut dramatically because stadiums will largely be empty this season, it doesn’t make business sense to pay for work that might not occur. Players get to keep any upfront money such as a signing bonus, but they otherwise won’t be paid this year for games they don’t play.
All of it might explain why it has been quiet on the contract front with the Packers’ top free agents.
“From my perspective I think the pandemic and economic downturn is playing a role,” one prominent agent said. “I saw it during free agency this year where teams were not spending money like they have in the past.
“I remember hearing from a GM that he was directed by his owner on a tight budget of what he could spend. Given the further downturn in the economy and the threat of a shortened season, I think you won’t see the typical starter type get the usual extension.”
In the case of Bakhtiari and Clark, the Packers are going to pay them at some point. They are too important to the franchise and young enough that a long-term investment makes sense.
But there are a lot of factors in play that could result in all the Packers’ free agents-to-be still being unsigned in January or February. The structure of contracts has never been more important with the cancellation of games a possibility and both players and owners are seeking the least risk possible.
As some recent contract extensions around the league show, teams are willing to guarantee large amounts of salary in contract extensions but are reluctant to pay it in the form of a signing bonus.
“It definitely has owners hesitant, but actually signing bonus is a safe place because you still tie the player up long term,” a second agent said. “Players don’t want a large (base salary) in 2020 in case we get a halt after a few games.”
The Los Angeles Chargers showed little concern about upfront money when they handed defensive end Joey Bosa a $35 million signing bonus as part of a $78 million guarantee on a five-year, $135 million contract.
But if the season is canceled after a couple of games, Bosa’s $1 million base salary is the only thing at stake. The $35 million stays in his bank account collecting interest.
It’s a huge win for Bosa, but not one Bakhtiari, Clark or Jones can expect from the Packers, who try to pay market value and nothing more. They have more cash than they’ll ever need in their preservation fund ($411 million), but they try to operate free of that savings and might be better off guaranteeing yearly salaries instead of spending beyond their means with a huge up
front payment.
The downside is the salary-cap cost of a signing bonus can be spread over the course of a contract, allowing the team more flexibility in aligning charges with the expected yearly rise of the salary cap.
An example of the more conservative approach is what Kansas City did with contract extensions for quarterback Patrick Mahomes and defensive lineman Chris Jones. Mahomes signed a 10-year, $450 million contract that included just a $10 million signing bonus.
However, $63 million was guaranteed at signing. It was done by guaranteeing Mahomes’ yearly salaries for the next three years plus adding team options that guarantee that season’s salary every March over the last seven years.
If Mahomes were to suffer a season-ending injury or be cut, the Chiefs would still have to pay him the remaining $53 million in guarantees, they just wouldn’t necessarily have to do it this year.
In the case of Jones, the Chiefs gave him no signing bonus. They guaranteed $37.6 million in salary instead.
In both cases, if the season were to be cut short this year, the guarantees that weren’t fulfilled this year would be rolled into the next amount of money in the contract that isn’t guaranteed. So, if $1 million of guaranteed base salary is lost due to the season being cut short, the league would find $1 million of nonguaranteed money later in the deal and apply it to that.
For Bakhtiari, Clark, Jones and any others the Packers try to re-sign this year, they must reach a meeting of the minds on structure as much as value. All three have leverage because if the players are on the Week 1 roster, they earn credit for the 2020 season and are free agents in March no matter what happens.
There’s a good chance the salary cap will be much lower next year because revenues will be down due to absent ticket and club seat sales this year. It won’t affect Bakhtiari and Clark as much as it will the others because the stars are going to get their money; the others will be fighting for whatever is left over in a down free agency year.
“We will always see teams spend money on the top guys, but the other guys may be curtailed,” the first agent said.
Those players may be faced with taking a club-friendly deal just to take the risk out of the near future. The risk there is if the league gets back to normal in 2021, the dollars will start flowing again and they might be locked into a below-market contract.
“If it’s good but not that great,” a third agent said of an offer, “you should be careful. I’d be willing to turn something down if it’s not good enough. I’d want to go to free agency.”
The Packers have $13.3 million of cap room this season they can eat up on future contracts or roll over into next season. It’s likely they’ll use some of it on player costs now, but they should have some money left over for future deals.
For now, however, those seem to be on hold.