NFL Holdouts

Every year around August, as the new NFL season approaches, a slew of players decide to hold out from playing. Their decision is usually driven by a desire to make more money or sign a longer contract. This year the big names holding out for more money (and with it more problems?) include Vincent Jackson, Darrelle Revis and Chris Johnson. You have probably heard the most about Darrelle Revis’s holdout. He is asking for $162 million dollars over 10 years.

I used to hate it when NFL stars held out for more money. I thought it was such a selfish move. The players seemed so out of touch with reality. Here is a guy who makes millions of dollars a year and whose only job is to play a game for 6 months a year and he is holding out to make more? These players needed to suck it up, get off their lazy asses and do their jobs.

As I have learned about the NFL and the player contracts my opinion has changed almost completely. Unlike MLB or the NBA, the majority of the money in an NFL is not guaranteed. This is the case because the rate of injury in the NFL is so high. Owners are not willing to commit to a player for 3 years that might get hurt after one game and never play again. By not guaranteeing players money the teams and owners are protecting themselves. If a player gets hurt they can just cut them from the roster and quit paying them. It also means that if a player is under performing and the team no longer thinks they are worth $10 million a year they can cut them and quit paying them the non guaranteed money. So if a QB signs a 4 year $40 million dollar deal and then underperforms the first 2 years so the team cuts him, he only makes $20 million.

What if that QB over-performs his contract? He plays the first 2 seasons and wins the MVP both years. He now is playing at a $15 million dollar a year rate. He can try to renegotiate with the team in hopes that management wants to keep him happy. There is not a lot of incentive for the team to pay him more. They have him under contract for 2 more years at only $10 million. They have a heck of a bargain, a $5 million a year discount. The biggest bargaining chip on that QBs table is refusing to play until they pay him what he wants.

An NFL player’s refusal to work is not unlike most regular jobs. If an engineer or an accountant feels they are getting paid to little they are going to shop around for better work. They will probably send out some resumes and see if other companies are interested in paying them more. Once they know their market value, they might ask their boss about a raise or quit and take a new job elsewhere. The main difference is the sums of money involved (more for a football player), the years of potential earning power (less for a football player) and the media coverage (infinitely more).

Now days I understand exactly why players do hold out. I even side with some of them. With such short and volatile careers, NFL players need to get paid as much as they can every second they are on the field. They have a much smaller window available for them to earn a living in their chosen career. By playing at an undervalued rate for a couple of years the player is putting his future financial stability at risk. Guys like Chris Johnson, who were clearly underpaid, need to have some way to get their money while they can.