The National Football League, which is filled with variances in player performance, has a lengthy off-season that can bring many needed additions teams require to compete for the next year. April starts the off-season excitement with the NFL draft, and teams pick up many free agents for tryouts during the months leading up to the season. Training camps for the players start at the end of June, but several players are demanding new contracts. This year’s most notable requests have come from Chris Johnson from the Tennessee Titans and Darrelle Revis from the New York Jets.
For teams to become playoff competitors, they need to acquire top talent, but signing top talent results in paying top talent prices. Finding talented players and maintaining the team under the NFL salary cap is challenging for team managers and coaches. The ideal scenario is to find players for niches in their coaching strategy and sign them while keeping the team under the salary cap. But a player asking for new contract negotiations can ruin this situation. When a player has an astonishing season before renegotiating a new contract, like Chris Johnson last year rushing 2,000 yards, the team management needs to attempt to determine the player’s worth. The chances of repeating such an exceptional performance is unlikely, as the legendary Barry Sanders only rushed more than 2,000 yards once in his 10-season career.
To sign a contract entering the NFL is a huge step toward a plethora of financial opportunities for many players, and they eagerly sign their first contract. However, the employees have not had the ability to demand new contracts after exceeding expectations. Only when the players perform above their set expectations do they demand new contracts. However, few players have ever told the team that they can have their money back after underperforming expectations. One recent memorable example is Javon Walker, who offered the Raiders their money back because of his lackluster performance.
Johnson is asking the Tennessee Titans for a contract that includes $30 million to $40 million guaranteed, with the reasoning that he should be paid what he is worth. Offering a player a contract like that is a huge financial risk for the team.
The preferred contract negotiations should result in players being paid a lowered base salary with bonuses based on performance. Just like customers determine tips for waiters on how well they perform during meals, NFL players should be rewarded on their performance.
A player’s contract should be based on performance on the field. For example, Johnson should be offered a contract with a base pay of about $1 million, but with a bonus of $1,000 per yard and $200,000 per touchdown. Projecting this proposed contract onto his last year of statistics would result to $6 million for next year, assuming he repeats his past results, which is in the salary range of $30 million to $40 million extended over five years.
Moving contracts to a lower base salary and increasing bonuses for performance would provide a better return on investment for the team. Players might be unhappy with this change because the chances of repeating such extraordinary results are slim, but players will be one step closer to being paid for what they are truly worth
