Wednesday, January 27, 2010

Return of the Poison Pill?

By now most of us are aware that 2010 is going to be an uncapped year. Given the uncapped year, we also are aware that players who would have been unrestricted free agents this offseason, much to their chagrin, are now restricted free agents by virtue of the requirement of six accrued seasons of service to qualify for unrestricted free agency instead of what had been four accrued seasons. In my time with the Redskins, our offseason film review mainly consisted of reviewing and scouting unrestricted free agents; it was rare that we would make the effort to review restricted free agents. However, now with your most talented players with expiring contracts being restricted free agents, you must do your due diligence on restricted free agents in the event that a player is surprisingly tendered at a level not expected.

By the end of February, we will know at what level teams have tendered restricted free agents. The tenders in 2010 are as follows:

- Right of First Refusal (also known as the low tender): $1,176,000 or 110% of previous year’s salary
- Right of First Refusal + Original Round Compensation: $1,176,000 or 110% of previous year’s salary
- Right of First Refusal + 2nd Round Compensation: $1,759,000 or 110% of previous year’s salary
- Right of First Refusal + 1st Round Compensation: $2,521,000 or 110% of previous year’s salary
- Right of First Refusal + 1st & 3rd Round Compensation: $3,168,000 or 110% of previous year’s salary

Some of the more interesting names in restricted free agency this year, who, had 2010 been a capped year, would have signed potentially market setting or at least top-tier contracts in unrestricted free agency are:

- CLE linebacker D’Qwell Jackson
- DEN defensive end Elvis Dumervil
- DEN wide receiver Brandon Marshall
- DAL wide receiver Miles Austin (although Jerry Jones has alluded recently to being interested in signing Austin to a long-term deal)
- GB safety Nick Collins
- HOU tight end Owen Daniels (although his market value clearly took a hit when he blew out his knee, but there’s no doubting that prior to the injury he was one of the more productive players at his position)
- HOU linebacker DeMeco Ryans
- MIA running back Ronnie Brown
- MIN defensive end Ray Edwards
- NE offensive lineman Logan Mankins
- NO offensive lineman Jammal Brown
- NYJ wide receiver Braylon Edwards
- PHI fullback Leonard Weaver (Weaver joined the Eagles as an unrestricted free agent and has now reverted to restricted free agency due to the uncapped year)
- SD wide receiver Vincent Jackson
- SD offensive lineman Marcus McNeill
- SD linebacker Shawne Merriman
- STL safety O.J. Atogwe

With all of the talent listed above, one has to wonder whether we could possibly see more movement than normal in the restricted free agency market. Historically, very few players have switched teams via restricted free agency. In recent memory, cornerback/return specialist Chris Carr moved from Oakland to Tennessee and tight end Ben Utecht moved from Indianapolis to Cincinnati. Given the value placed on draft picks in today’s NFL, those players who have moved via restricted free agency were tendered at the low level - right of first refusal only. In the cases of Carr and Utecht both of whom were tendered at the low level, neither player was drafted when they came into the league, therefore, their original teams could only match their offer sheets and not receive any draft compensation for their departure. A study that I conducted while at the Redskins determined that since 2007, when the 2nd round tender was introduced, no player tendered at the 2nd round level or higher (1st round tender or 1st & 3rd round tender) had ever received an offer sheet. It will be interesting to see if this fact is challenged this offseason given the quality of the restricted free agent market.

One way to controversially encourage movement in the restricted free agent market would be a reintroduction of the “poison pill” concept. Rewind to the 2006 offseason, you may remember that guard Steve Hutchinson, who was given the Transition tag which is essentially Right of First Refusal with no compensation for an unrestricted free agent, moved from Seattle to Minnesota by virtue of an offer sheet that contained a poison pill. The poison pill is a device that makes it virtually impossible for the original team to match the offer sheet. In the case of Hutchinson, the poison pill language would have guaranteed the full contract value of $49 million if Hutchinson was not the highest paid offensive lineman in Seattle, which given the presence of the contract of Walter Jones could not be achieved. Subsequently, the Seahawks signed restricted free agent wide receiver Nate Burleson to a poison pill contract that contained language stating that if Burleson played five games in the state of Minnesota his full contract value of $49 million would be guaranteed. Clearly, the Minnesota Vikings could not match this provision since they obviously play their home games in Minnesota. However, unlike the Hutchinson transaction where Seattle received no compensation, the Burleson transaction netted the Vikings Seattle’s third round pick due to the fact that Burleson, a former third round pick, was tendered at the low level – right of first refusal plus original round.

If Denver tenders a talented yet troubled Brandon Marshall at the second round tender and if you are a club looking for a legitimate number one receiver and are willing to give up a second round pick in exchange, then to ensure your acquisition why would you not insert a provision that makes it impossible for Denver to match? Some have said that the disappearance of the poison pill after 2006 confirms collusion on the parts of clubs? That said, in today’s unique free agency market with its unique set of rules, nothing would really be too surprising, not even a club using the poison pill to acquire a high end restricted free agent. Can’t wait for those tenders to come out to see who might be a viable target for such a mechanism.



Follow J.I. Halsell on Twitter: @SalaryCap101

3 comments:

  1. Are your tender amounts correct? I think those are the values for capped years. For uncapped years, there was a different table in the CBA extension. 1st: $3,168,000, 2nd: $2,521,000, 3rd: $1,759,000, Orig/ROFR: $1,176,000

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