John Clayton reports on the intricacies of the so-called “poison pill” provision that emerged in dealings between Seattle and Minnesota this offseason that threatens to upend the whole system of restricted free agency. Essentially, it is the insertion of a clause into the contract such as “highest paid player at his position on the team” that would makes the player’s current team’s right to match the terms of the contract unfeasible but does not place a similar burden on the team making the offer.
To get labor peace through 2011, Tagliabue had to take the union’s last offer to the owners for a vote or lose the salary cap system. Because it was the union’s last offer, the owners and front offices lost a lot of procedural gains. They gave back a lot of the grievance victories won over the years. They gave away a higher percentage of total revenues than expected.
Even though the rules involved in the Hutchinson situation have been in place for years, Tagliabue has to give a little more to fix the hole in the system that has been exposed. “What’s there to give back?” Colts general manager Bill Polian said.
“I think these issues raised by offer sheets by Seattle and Minnesota need to be addressed,” Tagliabue said. “I think it’s not what is contemplated. … We will be addressing it with the players’ association. I will be talking to Gene Upshaw about it next week.”
â€¢ The Hutchinson deal effectively kills the use of the transition tag. Each year, teams are given the use of the franchise or the transition tag as a way to keep their best unsigned player. Thanks to Hutchinson, any team can create a poison pill that won’t be matched because a special master isn’t going to veto a guarantee. If the clause triggers a salary escalation, the deal doesn’t have to be matched. But guarantees are a different story.
“I don’t think it’s good for football,” Eagles owner Jeff Lurie said. “The Seahawks lose a terrific young player like Steve Hutchinson. That was not the spirit of restricted free agency at all and wasn’t in the spirit of the designations. It’s a shame. The whole idea of the designation system in a salary cap with unfettered free agency, you at least know there are one or two players internally that you will have. When we drafted Donovan McNabb, we were fortunate enough to re-sign him at an early state to the largest contract in the NFL at the time. But if we couldn’t come to an agreement, we knew our fans would still be able to have Donovan because we would franchise him.”
â€¢ Thanks to Hutchinson, the restricted free agency system also became more costly. The NFL has four levels of restricted free agent tags that are progressively more costly to teams. Low tenders go at $712,600. The next level is at $1.573 million. If the restricted free agent is a bigger star, teams might have to jack up the price to a first-and-third tender at $2.069 million. To deter restricted poison pills, every team now will have to offer first-round tenders to restricted free agents.
But even if teams go up to that maximum level in this market, poison pills still will leave them vulnerable to losing their player to an offer sheet they won’t be able to match.
“The minds of creative people have no limits,” Tagliabue said.
Front office executives expect a change in the system from Tagliabue’s meetings with Upshaw. But it won’t come for free. It likely will cause adjustments in the franchise and transition systems. Players don’t like the franchise and transition tags because the tags weren’t used as expected. When the salary cap started, the players gave owners the tags essentially as a way to protect franchise quarterbacks. Teams came back and used them on kickers and safeties and as a way to threaten top free agents to try to get them to sign long-term deals.
In the latest round of bargaining, the union got a minor concession. The third time a player is franchised by a team, the required tender will now be the average salary of the top five players at the position with the highest average salary or 120 percent above his applicable salary from the previous year, whichever is higher.
Upshaw does have some incentive to close the poison pill loophole. If things stay the way they are, teams will try to get around having restricted free agents by signing all rookies from the second to the seventh round to four-year deals. Players are restricted free agents after three years, so that would take away a year of restricted free agency.
One trade-off could be to limit the use of franchise and transition tags to once or twice in the lifetime of a player. Upshaw might accept that. But now that the Hutchinson poison pill extends into restricted free agency, too, he might ask for more.
“It’s strange from both ends,” Vikings coach Brad Childress said. “From our end, we’ve added a good player and may lose a good player. That’s the long and short of it.”
The long and the short of it for the NFL is that it doesn’t have a cure for the current poison and will have to pay for it in another labor negotiation.
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