How De Smith Guaranteed Victory….FOR THE OWNERS

If you haven’t read THIS prequel to this article, you should read it before you continue reading Part II. Part I is critical to understanding this whole issue.

So, the issue I left hanging out there was, why does the tiered structuring of rookie contracts do so much harm to future negotiations?  Well, the really short answer is the NFL absolutely PANTS’D De Smith in the last labor agreement. The average NFL career is 3-ish years. As a rookie, everyone is REQUIRED to sign a 4 year deal that is a part of a wage scale. Because the average career is roughly 3 years, on average players never escape their first contract. When you count practice squad and preseason guys that got cut(yes they count), OVER HALF OF THE PLAYERS IN THE NFL are on their first contract, won’t even play out that entire contract, and will never see a second contract. And again, that contract that a majority of NFL players is playing under is capped. See where I’m going with this?

The NFL and our hero De Smith convinced the veterans in the last deal that it isn’t fair that talented veteran free agents aren’t being paid their due, because unproven rookies are stealing cap space over proven veterans. It’s unjust! The current players agreed, we’d rather screw the incoming classes than screw ourselves, and they agreed to punish anyone playing under their first contract. Understanding this issue is critical to this analysis. Because over half of the players that will vote on the next CBA(See below) are in their first, sometimes only, and always smallest contract, when Dee Smith asks these guys for a walk-out, they will not be able to afford it, because again, over half of players voting on it will be at the time paid the lowest wage of their professional careers. In the last deal, Smith and the NFL ensured the largest union voting bloc in the next deal will be made up entirely of the players least able to afford a work stoppage. Allow me to explain.

The NFL, in the name of ‘fairness’ to the veterans that have earned larger 2nd and 3rd contracts, convinced Smith to sign off on a rookie wage scale that keeps the unproven rookies from stealing the cap space from better deserving proven veterans. Sounds nice, sounds fair. The rookies are now locked into a severely discounted mostly non-negotiable rate, in the name of awarding veterans in their second and third contracts(which is actually just going to qbs but I digress). Again, the average player doesn’t make it out of his first contract. He never makes the big bucks, and likely cannot afford a work stoppage.

MILLIONAIRES, I MEAN, THOUSAND-AIRES ON THEIR FIRST CONTRACT

Tony Dungy famously said at the rookie orientation money talk: You’re a rookie, you sign a MILLION DOLLAR CONTRACT. You’re a millionaire, right? Nope, you’re a Thousand-Aire. Why is that?

It’s really quite simple. Agents make a max of 3%(for these purposes we’ll call it 2.5%) Taxes are complicated, but if you make $1,000,000, (and no I’m not assuming deductions, marriage, children, etc) the following comes straight out of tax brackets.

If you sign your $1,000,000 contract in 2019, here are the FIRST 3 debits you’ll be paying:

                  289,058 Federal Income Taxes

                    89,793 Wisconsin Income Taxes

                    25,000 2.5% Agent

Total Costs a Millionaire pays before he receives a single dime: $408,851.00

So you made ONE MILLION DOLLARS, right? Total Remaining for you? $591,149! 

That’s why you’re a ‘thousand-aire’ rather than a millionaire, even though you got a million dollar contract. This, as Dungy states, is before you paid off your mom’s mortgage, bought a car, bought some bling, bought a house in the city you’re playing in, perhaps a house in your home town, or given a single dollar to your entourage of buddies from home that hope to get paid for house-sitting duties, playing your video games, eating your Cheetos, and supplying your weed, but I digress yet again.

THE NFL WORKING CLASS

According to Over The Cap, exactly how many players are even making a million dollars and actually have $591,149 to divide between home, cars, and doing something nice for their moms? Let’s look at the Packers for insight.

There are 39 guys in 2019 making between $495,000 – $571,000. These are the guys that don’t make the top 51 roster cutoff. Of the guys in the top 51, 23 guys make between 571,000 – 914,856. That’s almost half of the top 51 salaries, but the top 51 aren’t the only guys voting in the union. You can’t forget these lower paid players because they make up a HUGE voting bloc. In the preseason there are 90 players on the roster, and they all got contracts and they all DO belong to the union, and they DO VOTE. Voting membership includes “active” players AND “associate” players (I believe that non-active ‘associate’ players have the option of not joining the union though.). If the vote were in 2019, of guys that will be voting on the next collective bargaining agreement, 67 Packers players out of a total of 90 players made less than one million dollars. And even if all 67 were making a million annually, each of them in 2019 have $591,149 to pay the bills AND save for a labor disruption. And don’t forget, JUST UNDER HALF OF THEM LOST THEIR JOBS before preseason ended and if a new preseason doesn’t happen due to work stoppage THEY DON’T GET PAID FOR A WHOLE YEAR unless they have a job waiting for them at home bagging groceries. No preseason = No NFL-level wage. I hope you can sell insurance, because if there’s a labor stoppage you might be bumped all the way down to washing cars. Oh, and if that salary is contingent upon you making the team, well, um, you’re screwed.

And as we proceed, let’s start adding into the analysis, saving money for a labor stoppage.  Oh, and did I mention this is the job that’s supposed to support them for an entire lifetime? So, we also have to consider retirement and health related expenses as well surviving until the next paycheck.

Lets look at the unique groupings:

The NFL Working Class bracket is the easiest.

Guys that aren’t on the 51 man roster(their numbers are all really similar):

39 Players, making $495,000 – $571,000 = an Average of roughly 533,500.00

Agent 2.5%:                        10,670

Federal Income Taxes: 162,377

WI Income Taxes:            54,106

Total Costs before player receives a single dollar: $227,153. Money Remaining to buy that house, save for labor stoppage, lifelong healthcare, retirement, bling, money for mom, etc: $306,347.

Remember, this is 39 guys, of a total of 90. This group already represents 43% of the guys Dee Smith has asked to save HALF of their game checks, to pay the bills while they are sitting at home on the couch and not playing. So, 43%, or, ALMOST HALF of the players on this team(and likely a similar number across the NFL) are the guys Smith is counting on to bring home $306,347, set aside $153,000, and all that’s left for them is $153,000 for a HOUSE, CAR, GIFT FOR MOM, RETIREMENT SUFFICIENT TO COVER SOMEWHERE BETWEEN 40-60 YEARS POST NFL LIFETIME COSTS, LONG TERM HEALTH CARE, oh, and don’t forget girls. They have to account for everything they will spend for their entire lifetimes, knowing that their careers are going to be short(perhaps just this one season). There is a reason they didn’t make the 51 man roster, and it’s not because each of them is a diamond in the rough. If the average NFL career is about 3 years, that means half the players end their careers well PRIOR to 3 years. To these guys every check missed does irreparable damage TO THEIR ENTIRE FINANCIAL FUTURE. These guys are under tremendous pressure to play and every game they sit out is absolutely crippling not to this season, but to their entire lifetime. Did I mention, the people in this position represent FORTY-THREE-FREAKING-PERCENT of the NFLPA’s voters?????? So, if the Packers are representative of the rest of the NFL, 43% can’t afford to save half their wages, and can’t afford a work stoppage. Full stop. They CAN’T. They must play. They must therefore vote in favor of whatever is on the table and will allow them to play.  

Now, if I’m being fair I have to admit, plenty of these guys are undrafted free agents, and the rookie wage scale is not the reason they’re screwed. However, these guys remain really important because they are NFL players that vote in the players union, and drafted or not, they’re voters and their wage is prohibitive to voting against any deal that puts bread on the table. On the Packers, this group literally represent 43 percent of the voters. Is De Smith seriously asking this group of players to vote against ANY deal the owners offer? Is he nuts? And equally important, these are the guys whose jobs are not exactly guaranteed. They’re disposable and this might be the ONLY year they get paid to pay football. They have to make the most of it. That $306.347 paycheck they got in 2019 might be the ONLY paycheck they ever get from the NFL. How long exactly can they afford to hold out for the greater good, if an NFL team wants to invite them back and pay them for another year? And if the NFL dangles another crappy offer, now that Dee Smith realizes he was absolutely pants’d in the last deal and wants to fix it this time around through his only tool(work stoppage), how long can these guys really vote against the next crappy offer? The NFL has these guys right where it wants them, and whatever offer the NFL makes this time to finish the job, here’s roughly 43% of the NFLPA voting in favor of another crap sandwich. The NFL can ignore these guys. All the NFL really needs to do is make an offer that will garner another 8% of the voters from the next bracket of players, and Dee will get pants’d again. And lets just say, the next tier isn’t full of guys getting paid like Aaron Rodgers.  

THE NFL MIDDLE CLASS

In 2019 14 Packers players made between $1,154,567 – $2,978,704. They make a total of: $29,209,721, for an average of 2,086,408.

     52,160 Agent

     172,903 WI Tax

     736,954 Federal Taxes

Total Costs: 962,017

Net Received: 1,124,391

These guys likely CAN afford to save half if absolutely necessary. They are the swing voters. Remember, the NFL only needs 8% of a favorable vote to come from this group. The first 43% can’t last more than maybe 3 games (assuming they can survive missing even one preseason game). Middle class guys are first rounders or have already played multiple years, hopefully have already invested in a house, paid off mom’s mortgage, have realized their old friends are just leaches looking to be paid to hang out, hopefully have invested in their retirement and their future.

The problem Smith will have is, it only takes a few guys in this category to screw up the works. The bankruptcy rate of professional sports millionaires is staggeringly high, which means MANY players that are being paid in this category DO NOT HAVE THEIR HOUSE IN ORDER. What might that look like? Well, if they own 1-2 homes, each worth $5 million, property taxes must be staggering, the mortgage payments must be staggering, upkeep staggering. The irresponsible players are always paying the hangers on, insane bling, and how about an outrageous child support bill (or maybe 5 different outrageous child support payments). Gambling losses perhaps? Dishonest or just poorly chosen money manager? Did someone convince you to invest in a restaurant? Wait a second, suddenly this legitimate millionaire is looking more like a thousand-aire or might even be looking at bankruptcy. In 2015 Sports Illustrated reported that within 3 years of retirement, 80% of NFL players are broke or in bankruptcy. At that staggering rate, a large percentage must be from this category, and I can’t imagine there aren’t a ton of future bankrupt middle class players that aren’t already blowing their money as we speak. The ONLY THING that can save players that failed to invest wisely is the continuation of game checks, which in yet another total blunder, don’t come year around, they only come during the season and after certain workouts and bonus dates. How many guys at this salary level walk into the season dead broke, and are salivating over that first game check? How many game checks can they afford to miss?

How hard does the NFL have to work to pick up a measly 8% of the NFL’s players from the middle class? How many of them are broke right now, days after their season ended? Realistically, who do you think decided this vote last time around? I wasn’t in the locker room, but I bet lowest 43% of wage earners were easy, and picking up a big chunk of the remaining 8% from the middle class NFL players wasn’t exactly difficult. I wonder if we even need to discuss the Upper Middle Class?

THE NFL UPPER CLASS AND UPPER MIDDLE CLASS

No analysis of the 2 upper echelons is necessary, because this NFL version of the working and middle class will easily deliver the 8% the NFL needs in order get an agreement. I’d argue however, even without looking at the insane net earnings of the upper middle class, and certainly the obscenely wealthy, plenty of these guys are broke as well and after missing several games will need to take out obscene loans to carry their lifestyles.

Just for information purposes, here’s a brief snapshot of the Packers upper echelons.

13 players in 2019 earned between $4,250,000 – $14,200,000

1 player in 2019 made $26,500,000

These guys can likely weather the storm, because hopefully throughout 2019 they saved half their game checks.  

 

“We didn’t get everything that either side wanted, but we did arrive at a deal we think is fair and balanced.” De Smith, July 25, 2011

He’s a world class chump. And he’s arranged for a vote where 43% of the NFL is virtually guaranteed to vote for a total crap sandwich. The other 8% will be easy to come up with due to the unfortunate spending habits of 22 year old NFL players. Sure there will be calls for solidarity, and maybe that 43% holds up for a round of negotiations or more, but when it comes to missing multiple game checks, the 43% will fold like a cheap card table, and the fight will be for the hearts and minds of the middle class of the NFL, who will do the same in relatively short order, because huge percentages of them are already broke, days after their seasons ended. Last time around, players were taking out loans at THIRTY PERCENT to survive a work stoppage. And that was before De created a wage scale to ensure most of the NFL players voting on the agreement were locked into the NFL version of poverty. Sure, they’ll make a bit of noise about unfairness and solidarity, and because pay only comes from games, the 43% can likely hold out until they miss their first preseason game or two, but when game checks start getting missed, De made sure that the NFLPA will have to accept an even worse deal this time around. If I were the NFL, this time I’d make a terrible opening offer, and tell them for every game they miss the offer is only going to get worse. But hey, Dee says there’s a John Madden royalties fund out there earmarked for a work stoppage, so they’ve got that going for them, which is nice.

 

Look, you know and I know, I’m off on my numbers some how some way. I don’t know which of the unemployed players will stay in the union while searching for their next team, players get tax deductions, taxes are different in different states, etc.. PLUS, plenty of the 43% I reference HAVE saved wisely. But, 80% of NFL players broke in 3 years? That means an incredible amount of them are broke or nearly broke TODAY, and that’s from all classes of NFL salaried players. A huge amount of the 43% can’t risk a stoppage, and a huge amount of the NFL middle class are already either broke or one slip on a banana peel from becoming broke. This new tiered system was supposed to get big contracts for the better players, and instead has inspired a youth movement. Win with a well drafted team of 1st contract players and sprinkle in a few incredibly overpaid megastars, and absolutely destroy your cap with a quarterback. Win the championship before your young players develop and your salary cap explodes. It’s basically the Seahawks formula, and it results in a handful of mega talented players breaking the bank, and 80% of the players living in the working or middle class. The working and middle class collectively can’t afford a holdout. Under the old system they couldn’t either, but that’s on them because they didn’t spend and save wisely. Under the old system, there were NO $25 million per year players and plenty of $5-15 million per year players. If they saved wisely under the old system, they could have stood up and fought. (they were foolish with their money and therefore caved in, but I digress yet again) But, the vast majority of players today are working or middle class players, and with this new setup that De spoon fed the players, they simply cannot afford a work stoppage under any circumstances. No amount of planning or saving will allow them to fight the coming fight without game checks. Get ready for another rodgering. See what I did there? 

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