Sports Negotiations – The discriminatory nature of the Split Contract

In a split second the receiver catches ball, comes down with two feet inbounds, converts the first down, and the defender crashes down on the back of his right leg….instantly snapping both his tibia & fibula. 

And so it goes, another productive receiver is sent to Reserve/Injured.  After presenting The Football Educator’s readers with a rather extensive 3rd and 10 scenario, we left you with this question;

Split between veteran or rookie receiver? 

Pittsburgh Steelers v Houston TexansThe question might lead you to debate the impact of losing a veteran wideout versus a rookie.  But the hint was in the “split”, as in split contract.  Also known as Up & Down amounts, split contracts are one of the little utilized and even more unknown aspects of NFL player contracts.  The Collective Bargaining Agreement is non-discriminatory in its issuance of Minimum Salaries for players on and off the Active/Inactive roster.  In fact most fans might assume that ALL players placed on the Injured Reserve would receive their full Paragraph 5 (base salary).

But the CBA allows for both an Up & Down amount (split contract) in minimum salary as it directly relates to roster status, but the catch is in the contract.  It has to be negotiated into the agreement.  The following are the minimum salaries for player ON the Active/Inactive roster of an NFL club, or the UP amount.

#CS

2011 2012 2013 2014 2015 2016 2017 2018 2019

2020

0

$375

$390 $405 $420 $435 $450 $465 $480 $495 $510
1 $450 $465 $480 $495 $510 $525 $540 $555 $570 $585
2 $525 $540 $555 $570 $585 $600 $615 $630 $645 $660
3 $600 $615 $630 $645 $660 $675 $690 $705 $720 $735
4-6 $685 $700 $715 $730 $745 $760 $775 $790 $805 $820
7-9 $810 $825 $840 $855 $870 $885 $900 $915 $930 $945
10+ $910 $925 $940 $955 $970 $985 $1000 $1015 $1030

$1045

The next table displays the minimum Paragraph 5 or base salary for those players NOT ON the Active/Inactive roster and placed on some sort of Reserve category (usually IR).

#CS

2011 2012 2013 2014 2015 2016 2017 2018 2019

2020

0 $258 $273 $288 $303 $318 $333 $348 $363 $378 $393
1 $273 $288 $303 $318 $333 $348 $363 $378 $393 $408
2 $288 $303 $318 $333 $348 $363 $378 $393 $408 $423
3 $328 $343 $358 $373 $388 $403 $418 $433 $448 $463
4-6 $353 $368 $383 $398 $413 $428 $443 $458 $473 $488
7-9 $378 $393 $408 $423 $438 $453 $468 $483 $498 $513
10+ $403 $418 $433 $448 $463 $478 $493 $508 $523 $538

TGC Chandler Harnish Split

Splits contracts are rarely, almost never asked for with veteran deals.  The very mention to an agent or player outside of a rookie negotiation is considered almost insulting.  Yet every NFL Club has as much right to ask Peyton Manning as they do Chandler Harnish for a split contract.

The philosophy behind Up & Down base salary makes perfect sense.  A player is lost for the season in a similar scenario presented on 3rd & 10, the Club gains some room to resign his replacement.  It seems only fair that players out due to injury and no longer productive should be paid, yet not the same amount as if they were on the field.  But it doesn’t work that way and injury is indiscriminate as to whom it attacks, veteran or rookie.

Let’s look at our broken leg;

Veteran – Split Contract

The player is a 3rd year veteran, waived off his original deal as a 4th round rookie, and resigned with his second club for the minimum salary and a nominal bonus generated from competition with another Club also interested in the talent but inconsistent wideout.  His minimum salary with Credited Seasons is $555,000.  But no Down amount or split was negotiated into his contract.  After all, this is a former 4th round pick with solid experience to his credit.  His placement on the IR is disappointing but tempered by the fact he’ll earn the remainder of his Credited minimum salary.  (throw in that the player could or couldn’t be a character problem and otherwise “pain in the butt, locker room lawyer”.

Rookie – Split Contract

Our 5th round rookie happened to be the slot receiver in our unfortunate scenario.  All he did was “work his butt off” for team veteran laden at the wideout position.  He’s scratched a clawed his way on to the 53 man roster, sat as an Inactive at the start of the season, and has since worked his way to number three on the depth chart.  But his rookie contract came with split caveat.  His minimum first year base of $455,000 drops to $288,000 (prorated over the remainder of the regular season games).  Why?  Because his NFL Club wouldn’t budge on the split.

For this example’s sake the difference is $167,000 of cash & cap.  Let’s say the season had 6 weeks remaining.  The Club would gain $62,625 as insurance money on the back of a rookie that just helped win a pivotal game in your run to the playoffs.

It just doesn’t matter

TGC Cap AccountantI’m going to unequivocally tell you that NFL front offices don’t calculate at the beginning of a season the amount of “split space” they might gain by negotiating the Down amount into a rookie contract.  Splits have become a game within the game in signing rookies.  Since the execution of the CBA extension, NFL Clubs have been unyielding in their demand for two year splits.  Those that negotiate on behalf of the Clubs don’t want to be the ones that gave it away.  It’s an ego issue with them.  Agents negotiate off of the last year’s deal for the same selection.  No split then, no split now.

This stance on split contracts won’t be popular with 32 NFL teams but it’s the right stance to take, especially if not applied equally across the roster.  Rookies need to pay their dues, but do that through funky haircuts and carrying helmets.  Insurance policies worth pennies on the cap and levied on the future of the League makes no sense.

Injuries don’t discriminate, split contracts shouldn’t either.

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