So, with most teams experiencing situations where players feel that they are “out-playing” their current contract (one that they felt was fair not so long ago), I thought it would be interesting to throw around some ideas on what we think the “typical” NFL contract will look like in a few years.  There are many issues that seem to have all come to a head at the same time, and it’s a good possibility that we may see some fundamental changes in how contracts are structured in the not-so-distant future.  Some of the relevant issues that are presenting themselves are the issues of players wanting new deals more frequently, rookie contracts getting out of hand, the issue of guaranteed money, and the current CBA expiring soon and the slew of issues that could stem from that.

As an aside, before I really get into this, it would be interesting to do some kind of study regarding the number of players wanting new contracts per season over the past decade or so and to give some analysis to each situation within its proper context.  I’m not even going to attempt a project like that, because I do not have the appropriate time and resources to conduct such an undertaking.  Using some speculation, I am however, willing to give an opinion of what I feel is occurring.  If someone were able to conduct this research, it is highly likely that they would find a few trends that have emerged over the past decade or so that have contributed to this current situation.  To do this topic justice, I will have to touch on a few other subjects from my first paragraph as well.  In my opinion, at some point in the past decade, players in general migrated to a mindset that it would be in their best interest to negotiate long term deals for financial security.  Two and three year deals became less popular for the upper echelon player, and they sought larger commitments from teams.  Now we all know how inflation plays a role in our lives; let’s apply the same concept to a multi-million dollar multi-year contract.  The inherent problem with a long term deal is that the relative value will actually decrease as the contract progresses.  This is also working in a bubble where the salary cap stays constant, which we know doesn’t exist.  This also leads to the contracts seeming “unfair” after a relatively short time frame.

Another trend deals with the actual structure of contracts that are currently being used.  As a business organization, every team knows that their players will be seeking long term deals, which will bring financial risk to the team.  In general, teams need to assume that as players age, their production will also decrease, and the likelihood of injury will increase.  If long term deals were structured evenly throughout the duration of the contract, the last few years would probably yield an older player, who is making a sizeable amount of money, who may be injury prone and/or less productive.  Of course, this is not smart business prowess.  To combat this issue, as the average contract length increased, teams front loaded these deals with some form of guaranteed money, and basically left the back few years almost as “ghost” years in the deal.  The values of these years could hinge heavily on performance requirements or other issues.  This feature also allowed teams to have the ability to cut the player and dump the contract without much penalty against the salary cap.  In general, most six or seven year deals are really three year deals that are meant to be restructured at that point, but also give the team the ability to dump the contract with limited problems. 

The other issue that plays a role here is the growing issue of the value of rookie contracts.  Weather fair or not, these contracts become useable bench marks.  For all intensive purposes, the increasing rookie contracts have done nothing but drive up market prices for individuals that reach free agency; among other problems that I will briefly explore here.

As for the other things I had mentioned; rookie contracts getting out of hand, the issue of guaranteed money, and the current CBA expiring soon.  I’m going to look at these together, because in my opinion, they are actually very closely related and may be dealt with at the same time. 

We are all aware that the current CBA will be running out soon and if nothing is done about it, 2010 will be played as an uncapped year.  When this first went public, I’m sure there were a lot of people who instantly though, “Wow, now my favorite team can just go out and break the bank for one year.”  I’m no legal expert, so I’m not going to attempt to touch that situation in depth, but it’s safe to say that there are measures in place that pretty much force the Union and the Owners to reach a new agreement.  It most definitely will not be an all out spending spree with no downside.  There are things built into that scenario which will hurt both the players and the owners, so this is something that both sides will want to avoid.  This is a good thing.

However, with a new CBA coming into existence, it allows the opportunity to take care of these other problems now.  The NFL owners are all for some type of rookie pay system going into effect; and honestly, it is the fair thing to do.  The incoming rookies may not like this too much, but they don’t exactly get a vote.  In theory, the players should actually be in favor of this system as well, but something tells me they’ll hold onto that card for a minute.  Yes, some have come out and endorsed it, but it won’t go into effect unless they agree to it, and technically it’ll be a nice item to bargain with.  The players will be in favor in an increase in guaranteed money.  I believe this is where the compromise will occur.  The Union will eventually agree to instill a rookie pay scale, and in return, the Owners will enact some changes to how they treat guaranteed money.  This would all be fine.  If these two changes occur, theoretically, contracts should stabilize themselves after a few years.

So what will be the collective outcome after everything settles?  In my opinion, a few years from now, contracts will be very different.  There should be some sort of rookie pay scale, perhaps resembling that of Major League Baseball.  I’m fine with that.  Also, once guaranteed money becomes a bigger staple in NFL contracts, I think you’ll see contract length and overall value decrease significantly.  If players are interested in guaranteed money, they better be ready to live with two and three year deals at somewhere between a third and a half of the overall value of a current five or six year deal.  I think five year deals will be considered long term and I’d be shocked to see deals going longer than that.  Teams will simply not be willing to sink millions of guaranteed money into a long term investment.  To illustrate what I’m saying, take Samuel’s 6 year, approximately $60 million deal with $20 million guaranteed.  In a few years that might look like a 3 year, approximately $18 million all guaranteed deal. 

So what do you guys think?  Like I said I’m not an expert on contracts and such, I’m just shaking the old rocks around in the head and seeing what comes out.