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“More teams were reluctant to do all option and no signing bonus because of the victory the PA won in the Ashley Lelie decision,” Levin said. The Lelie decision, he added, “basically said that once an option bonus is earned by the player it is his to keep no matter what.” That decision was a factor in the negotiations between the Lions and No. 2 pick Calvin Johnson, who sat out nine days of training camp while Cook and the Lions worked on a deal without an option bonus.
Cook, who wanted big guaranteed money for Calvin Johnson, said “it wasn’t really a holdout” because money wasn’t the issue — structure was. Johnson ended up with $27.2 million in guaranteed money.
Wide receiver Ashley Lelie’s victory in a grievance against the Denver Broncos has led to changes in contracts for this year’s first-round NFL draft picks, including a new twist devised by agent Bus Cook and the Detroit Lions — the “superseding signing bonus.”
Late last year, NFL Special Master Stephen Burbank ruled that Lelie didn’t have to pay back a $220,000 option bonus, even though he triggered a forfeiture clause in his contract when he held out from training camp. The NFL Players Association was able to file a grievance over the issue because the new NFL collective-bargaining agreement limits the ability of clubs to force a player to forfeit salary escalators and other bonuses if the player fails to perform.
The NFL, arguing for the Broncos, said that Lelie’s option bonus should be treated like an unearned bonus, such as a signing bonus, but the NFLPA argued that an option bonus, which a club pays to a player to extend the length of his contract, is indeed an earned bonus, like a salary escalator.
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Bonus structure was key in Calvin
Johnson’s talks with the Lions.
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Though the NFLPA won the case, it has made NFL clubs reluctant to agree to option bonuses for this year’s highest-paid rookies, according to agents and players union officials. The trend is significant because in the last two years option bonuses have been in vogue for first-round picks, while signing bonuses virtually disappeared. Last year, 28 of the top 32 picks signed a contract that included an option bonus but no signing bonus, said Mark Levin, director of salary cap and agent administration for the NFLPA. This year, only 10 of the 30 first-round players who had signed deals as of last week opted for an option bonus over a signing bonus.
“More teams were reluctant to do all option and no signing bonus because of the victory the PA won in the Ashley Lelie decision,” Levin said. The Lelie decision, he added, “basically said that once an option bonus is earned by the player it is his to keep no matter what.” That decision was a factor in the negotiations between the Lions and No. 2 pick Calvin Johnson, who sat out nine days of training camp while Cook and the Lions worked on a deal without an option bonus.
Cook, who wanted big guaranteed money for Johnson, said “it wasn’t really a holdout” because money wasn’t the issue — structure was. The Lions wanted to make sure they were protected in case Johnson didn’t live up to the terms of the contract. After many hours of talks, Cook suggested modeling the contract on baseball deals, in which all salaries are guaranteed, and Lions COO Tom Lewand came up with the idea of a “superseding signing bonus,” which works like a salary advance, Cook said.
All of Johnson’s annual salary, which starts at $285,000 in the first year and balloons to $6.3 million in the sixth and final year of the deal, is guaranteed. But Johnson’s salary will drop on a prorated basis after the final game of the 2008 season, when he is paid the first superseding bonus of $4 million and will drop again when he gets an additional $6 million on the first day of the 2010 league year, Cook said. Johnson ended up with $27.2 million in guaranteed money. |