Arbiter says NFL urged clubs to limit guarantees

An arbiter ruled in January that there was no collusion by NFL clubs in response to a grievance filed by the NFL Players Association in 2022 that alleged the league and its member clubs colluded to restrict or limit fully guaranteed player contracts in the wake of Deshaun Watson's record-setting contract.

The "Pablo Torre Finds Out" podcast published the Jan. 14 decision, which had not been made public previously, on Tuesday. Contacted by ESPN, the NFLPA declined to comment, and the NFL did not respond to comment.

Though Christopher Droney did not award any damages and dismissed the NFLPA's demand in its entirety, he found that the NFLPA showed, "by a clear preponderance of the evidence that concerted action was contemplated and invited at the March 2022 owners meeting."

Droney cited clear evidence including emails from the league's management council and commissioner Roger Goodell, and presentation slides from a meeting with ownership in attendance, that satisfied one of three elements to determine whether collusion occurred (the other two he did not find sufficient evidence to support): "Was concerted action contemplated and invited?"

"There is little question that the NFL Management Council, with the blessing of the commissioner, encouraged the 32 NFL clubs to reduce guarantees in veterans' contracts at the March 2022 annual owners meeting," Droney wrote.

The NFLPA initiated the system arbitration in October 2022, shortly after three quarterbacks -- Lamar Jackson, Russell Wilson and Kyler Murray -- had all failed to successfully negotiate with their clubs for fully guaranteed contracts after the Cleveland Browns set a new precedent by fully guaranteeing Watson's $230 million contract that March.

The NFLPA alleged that the clubs and the league violated Article 17 of the CBA, the anti-collusion section, which prohibits clubs and its employees from entering into an agreement "express or implied" with the league or another club and its employees concerning the terms and conditions offered to a player in a player contract.

A week after the Browns announced Watson's fully guaranteed contract, club owners and their representatives met for the annual league meeting, where according to Droney's decision, the league office's management council, an administrative group, presented to owners for 20 minutes about a trend they had recently tracked. Clubs were guaranteeing more money in signing bonuses, and the league's management council made the owners aware of the potential salary cap consequences in continuing to do so.

On March 20, 2022, a week ahead of the meeting and two days after Watson's contract was public, NFL executive vice president and general counsel Jeff Pash emailed Goodell to update him on the management council's preparations for the presentation to ownership.

Pash wrote, per the decision, that in the past two years "the very top players" received "large guarantees" but the management council wouldn't have "a better sense of whether the large guarantees are extending further into the free agent pool" until the next tier of players signed. He wrote that it was "something that we will want to discuss at both the football ops sessions and with the owners as well."

Goodell replied via email: "Agreed but the tip of the market is most of the dollars and if we wait to see how it falls, it will be too late to counter. Agree with raising with a big concern that this will erode a key aspect of our CBA that resisted guaranteed money except as clubs determined on their own."

Droney's decision cites the management council's presentation slides and the corresponding "talk track," which was used during the meeting to explain the slides.

The slides showed a bar graph that illustrated, "[s]ince the [2022] Super Bowl, "the average club has committed over $86M in signing bonus and salary guarantees [100% increase over 2020]." And a "92% increase over 2020 in the number of players receiving signing bonuses and salary guarantees."

The notes said: "Both create set salary cap charges that may hamstring clubs' abilities to construct rosters in the exact way they wish."

And continued: "Ultimately we think that leads to less flexibility when constructing your rosters. Continued proration and guarantees, which may become proration through conversions will often beget more proration in future years. as those salary cap changes stack. lt is a short term solve that, if left unchecked can create long term problems and enter a club into a cycle that is difficult to escape.

... if guarantees continue to grow in both amount and number of players, then there's a risk that they become the norm in contracts regardless of player quality. [redacted-Privilege] That not only has the potential to hinder roster management but set a market standard that will be difficult to walk back. Of course, all clubs must make their own decisions. But continuing these trends can handcuff a club in the future. "

Goodell, multiple NFL owners and Jackson and Wilson testified in an arbitration hearing held over 10 days in July and August of 2024. Per the decision, some owners remembered parts of the management council presentation and others didn't remember details.

Arizona Cardinals owner Michael Bidwill, who would soon be entering negotiations with Murray's agent regarding the quarterback's extension, said he "didn't remember the specifics of any of the actual words from the presentation."

Bidwill said he "guessed" that he talked to then-general manager Steve Keim about it after the meeting, because Keim was not in the owners' session. "We were in discussions with Kyler [Murray] about extending his contract, you know presumably before that 2022 season and this was going to be something that we really needed to make sure that we focused on."

New York Giants owner John Mara said: "Just the thought of me calling Jerry Jones or somebody and asking him not to guarantee Dak Prescott's contract or somebody else's contract -- I mean, he would laugh at me, among other choice words, I'm sure. Just the whole notion is ridiculous."

Erik Burkhardt, the agent for Cardinals quarterback Kyler Murray, said that after Watson's deal, a fully guaranteed contract was "very important" to him and Murray, and he thought Murray was more deserving of one than Watson. Per the decision, Bidwill testified at the hearing that Keim "made sure Burkhardt understood we weren't doing that."

In July of 2022, Murray signed a five-year contract that was not fully guaranteed.

Per Droney's decision on July 22, 2022, Los Angeles Chargers owner Dean Spanos texted Bidwill to congratulate him on signing Murray and let him know that the parameters of the contract (not fully guaranteed) would help Spanos' upcoming negotiations with Chargers quarterback Justin Herbert.

"I think many teams will be happy with it once they have a chance to review. Cleveland really screwed things up, but I was resolved to keep the guaranteed relatively 'low," Bidwill said in the text exchange.

Jackson also was seeking a fully guaranteed contract from the Ravens. Baltimore offered two three-year fully guaranteed offers, but Jackson was seeking a longer deal, per the decision. The Ravens eventually used the franchise tag on Jackson and later signed him to a five-year contract that was not fully guaranteed.

Wilson testified that he asked for a fully guaranteed contract from the Denver Broncos. The five-year extension he received from the team was not fully guaranteed, however, and Droney wrote that it was clear the team had no intention in giving him one because they had leverage in negotiations as Wilson had two years left on his current contract when he reached his extension with the club.

Per the decision, the NFLPA initiated the arbitration in a letter on October 19, 2022. In the letter, the NFLPA alleged that a high-ranking NFL executive asked an owner in August 2022 to "encourage other owners at a meeting that month to not agree to large, fully-guaranteed contracts like Mr. Watson's."

Per the decision, DeMaurice Smith, the NFLPA's executive director at the time the union filed the grievance, was asked about that allegation in his deposition and at the hearing. Smith testified that ahead of the August 2022 owner's meeting, New England Patriots owner Robert Kraft told him in a phone call that Goodell asked Kraft to talk about guaranteed contracts and say that they were "a problem" at the upcoming meeting.

Goodell testified in the arbitration and denied the allegation that he asked Kraft, or any other owner, to discuss the issue. Kraft also denied in his testimony that Goodell asked him to initiate a conversation with owners, or that he told Smith about it.