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Is the Ferguson Deal as Bad as Advertised?
New York Jets Salary Cap Page


Is the Ferguson Deal as Bad as Advertised?

Based on an article written by Mike Florio of Profootballtalk.com there has been a great deal of speculation that D'Brickashaw Ferguson got swindled by the Jets in negotiating a contract without any injury guarantees. The story has picked up major steam in the New York market with major news outlets like the New York Daily News and SportsNet New York discussing the contract. At the heart of the story is a debate that has gone on for the last six months about the Jets financial situation due to the poor PSL sales and large spending spree that the team has engaged in since 2008 which has led many to question whether or not the Jets are really willing to invest long term in the teams better players.

The insinuation is that the Jets have shown no real commitment to Ferguson and made this deal as a public relations stunt to show their fans that they will be looking to re-sign all of their players. Is that true? I've tried to get some details on the contract, but as of right now can only go based on the details that PFT has obtained and released. The manner in which the contract breaks down is that Ferguson has about 29.5 million in future potential guarantees that essentially have no real guarantee attached to them at the time the contract was signed. A skill guarantee kicks in if Ferguson is on the Jets roster after February 15th of 2011, but there is no protection in the event of injury. Lets look a little closer at exactly what this means.

Let me start by saying that I do not believe the CBA will allow the Jets to fully guarantee salary on extensions signed in the uncapped year and that is an assumption I am starting with as to why the deal is not fully guaranteed. This is something I have not been able to confirm either positively or negatively, so we will assume that it is true. A full guarantee in the NFL is one that is guaranteed for skill, injury, and cap considerations. Because Florio does not mention a cap guarantee we will have to assume that Ferguson does have that in his contract in the event the salary cap returns. This type of guarantee protects the team from releasing a player to create cap room for a player that they feel is a better player. A skill guarantee is given to a player to ensure that he will be paid regardless of what his level of play is. Without a skill guarantee a club can decide, based on whatever criteria they want and without objection, that the performance of the player is not at a satisfactory level and simply cut him. A guarantee for injury protects the player from being released without pay due to a football related injury compromising his level of play.

Now how do these considerations pertain to Ferguson's situation? The first thing that one needs to realize is that the only reason for release of a player that is entirely subjective is release for skill deterioration. There is no way for a player to object to such a release because how a teams views a players skills is entirely up to the team. This is different than releasing a player due to injury because there can be a neutral third party examination that determines if the player could or could not have performed on the football field. This is why Ferguson would opt for a guarantee based on skill. If the Jets decide he stinks they have no ability to release him without paying him the guarantees provided he stays on the roster on February 15.

PFT insinuates that a serious injury could see the Jets release Ferguson without penalty, but that is probably inaccurate. Let's assume Ferguson is injured at some point during the 2011 season. Provided Ferguson does whatever is required of himself to rehab the injury he can only be released if, upon physical examination, he is deemed unfit to play football. This is the type of situation that we see when a player fails his physical prior to training camp and is placed on the “physically unable to perform” list. If Ferguson can still perform on the field, even if it is at a diminished level from his peak, the skill guarantee protects him from losing money. In the event of a dispute over his physical condition Ferguson's case should be heard by an impartial third party that would obtain a neutral physicians opinion. If he is deemed fit to play football the Jets would likely be on the hook for the remainder of his contract since Ferguson could have continued to play football with the Jets, which is all that is required to received his guaranteed salary. So the true injury condition that we are looking at here is the career ending type injury and the reality is those situations do not often occur. For as gruesome as RB Leon Washington's injury was last season there is an excellent chance he will be cleared to play once training camp begins, and those Washington injuries are the exception rather than the norm. So its significantly more likely that a player like Brick would be cut for “skill” reasons in the first four years of his contract than for injury purposes. There is also the issue of injury protection that is provided by the NFL. According to Article XII, Section 1(c) of the CBA any player injured during the course of the NFL season and fails the teams preseason physical exam the following year and is subsequently released for that failure has a portion of the following years salary protected in the event he can not play football. While that amount would normally be limited to $325,000, here is what Article XII, Section 2 states about contracts such as Ferguson's:

“A player qualifying under Section 1 above will receive an amount equal to 50% of his contract salary for the season following the season of injury, up to a maximum payment of $275,000, if he is released pursuant to Section 1(c) above in the 2006-08 League Years unless he has individually negotiated more injury protection or a larger guaranteed salary into his contract.”

So while that does not completely protect a player it does offer more protection than we would be led to believe from the articles on the contract due to the fact that Ferguson's future salaries are guaranteed. That means if Brick makes it through February 15 of 2011 he will have not only his 2011 salary guaranteed, but 50% of his 2012 salary insured by the injury protection plan. That amount would be almost $5,000,000. If he gets through the 2011 season injury free he will have 2012 fully covered by his skill guarantee and 50% of his money owed to him in 2013 also guaranteed in the event of an injury in 2012. If he makes it to February 15 there is some form of built in injury protection in the contract. It is not for the full amount of the deal, but there are payments that would be received in the event of a career ending type injury, even if Ferguson does not take out any type of insurance policy on himself.

The one area where it is hard to argue that Ferguson did not get a great deal is the fact that there is no guarantee for Ferguson for anything that happens in the 2010 NFL season. Because his salary is not guaranteed in 2011 unless he is on the roster on February 15, a release before that date due to injury would only leave Ferguson able to collect the minimum amount through the NFL's injury protection plan. As astutely pointed out, however, by Bent of The Jets Blog”, it's not as if Ferguson had any guarantee this season or next season anyway in the event of injury. It seems clear that because Ferguson had two years remaining on his contract that the Jets wanted to have protection in the event something happened to Brick in 2010, either skillwise or injurywise, to protect their interests. There is also the fact that the team has been pretty consistent with their approach of having as many players as possible playing for contracts in their chase for the Super Bowl this season. This contract maintains that status for Ferguson in the upcoming season. Considering his former contractual status I'd say that is fair for both sides. By giving the Jets such a consideration Ferguson did end up with a larger guarantee than most expected and got about a 2 million dollar raise in 2010. So Ferguson will walk away with more money if he did get injured in 2010 than he would have if he just chose to play the season out under the old contract.

As for the lack of a skill guarantee for 2011 who cares? A skill guarantee is more important for an older player, such as Alan Faneca, whose skills may erode and no longer justify the salary. Ferguson would only be 27 years old if the Jets released him from his contract and would have received about 5.3 million of an expected 34 million guarantee in the first year of his deal. A left tackle of his skill level and age is going to make up that money on the open market even with the uncertainty of the CBA looming. He would make another 30 million guaranteed on the open market which would make his actual guaranteed earning likely surpass whatever he would have earned from New York. In addition, if the Jets were to cut Ferguson, there would be 3.9 million in dead cap money if the cap was to return. That figure is also added insurance that Ferguson has to keep the Jets from cutting him before his guarantees kick in.

As for the assertion that the Jets did not want to provide injury guarantees because fully guaranteed salaries could require the team to set aside funds in a separate account for the future salaries, that is not true. While it could potentially be the case for 2010, it has nothing to do with injury guarantees. Article XXXVIII, Section 15:

“The NFL may require that by a prescribed date certain, each Club must deposit into a segregated account the present value, calculated using as a discount rate the one-year Treasury Note rate as published in The Wall Street Journal on February 1 of each year, of the gross amount, less $1,000,000, of deferred and guaranteed compensation owed by that Club with respect to Club funding of Player Contracts involving deferred or guaranteed compensation...The present value of any future years’ salary payable to a player pursuant to an injury guarantee provision in his NFL Player Contract(s), shall not be considered owed by a Club under this Section until after the Club has acknowledged that the player’s injury qualifies him to receive the future payments”

So an injury guarantee has no bearing on funding of the guaranteed future salaries owed by the team or was a way for the Jets to avoid more cash outlay in the near future. The fact that the team agreed to a skill guarantee rather than an injury guarantee forces the Jets to fund Ferguson's future salaries when and if February 15, 2010 comes along.

So is this the best possible deal in the world for Ferguson? Probably not, but it is also not the type of deal that the Jets are being accused of giving and his team accepting. Ferguson decided to take the option that he will not sustain a career ending type injury during the course of his contract and in return may potentially earn a higher amount of guaranteed money than if he had a fully guaranteed contract. It's a risk/reward proposition that everyone faces in their life and he chose to take the riskier side. There is nothing wrong with that nor the contract he received from the team.

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