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The Contract Conundrum: J.J. Watt And the NFL CBA

After just three seasons in the league, J.J. Watt has already proven to be one of the best players in NFL history. Will the Texans reward him with a new contract worthy of his performance, or will they instead choose to use the CBA against him?

J.J. Watt, thinking about breaking spirits, probably.
J.J. Watt, thinking about breaking spirits, probably.
Kirby Lee-USA TODAY Sports

The New CBA

The NFL Draft Class of 2011 is the first to experience the effects of significant change under the newest collective bargaining agreement (CBA), which was designed to reduce large payouts for unproven rookies drafted in early rounds.  The owners and the NFLPA obviously found common ground to avoid underachieving first-round draft picks from getting grossly overpaid.  We have all seen examples of "busts" making off with massive payouts.  As an example, JaMarcus Russell was paid $32M guaranteed on a $61M rookie contract as the first overall pick in 2007, but the Raiders released him after three seasons of failing to meet expectations.

The latest CBA, which went into effect in 2011, now defines lower amounts for rookies to preserve larger payouts under the team's salary cap for proven veterans.  This made sense in the spirit of ensuring that rookies prove themselves in the league and actually earn larger contracts later in their careers.

J.J. Watt's rookie contract is for $11.24 million over four years, with a team option for a fifth year.  Just one year earlier, under the previous CBA,Tyson Alualu was picked eleventh overall and signed a five-year, $21.9 million contract.  Watt is making half as much under the new CBA.  Not only are the rookie contracts substantially lower, but there is also a glaring pair of handcuffs in the design as the team can add a fifth year for players picked in the first round.

The Fifth-Year Option

In this new CBA, the team reserves the right to exercise a fifth year option on any first-round draft picks.  This works very much like a franchise tag to keep the player one year longer, before the team has to offer a new contract or apply the franchise tag.  The NFLPA was either short-sighted in agreeing to this, or they conceded something else during negotiations to allow this "team-friendly feature" in the new CBA.

It has potential for abuse if a team wants to retain a player for his services without future guaranteed income, which is the same exact issue players have with a team's use of franchise tags.   Sure, they'll get paid at an above-average rate for that year, but it lacks the long-term guarantee with the ever-looming risk of career-ending injury in a violent sport.  Unlike the franchise tag, the fifth-year option groups players into two payout pools based on where they were drafted.

For the first ten players picked in the first-round of the NFL Draft, the fifth-year option pays the average of the five largest prior year's salaries at their position.  For all other first-round picks, the fifth-year option pays the average of the third through twenty-fifth largest prior year's salaries at their position.

Since J.J. Watt was picked eleventh overall, he is subject to a much lower salary in his fifth year than had he been picked even one position higher.  We get it.  There has to be a line drawn somewhere, and that line is right at the "top-ten."  If Watt was picked in the "top-ten" of the 2011 draft, he would get paid $10.6 million in his fifth-year.  Instead, having been picked eleventh, Watt will get paid nearly $4 million less, at $6.9 million.  Unless the Texans provide a contract extension before that 2015 season.

2011 Draft Class

Other players from Watt's draft class are already getting lucrative contracts:

Patrick Peterson (Cardinals): 7years, $83 million, $48 million guaranteed, $15 million signing bonus.

Andy Dalton (Bengals): 7 years, $97 million, $17 million guaranteed, $12 million signing bonus.

Colin Kaepernick (49ers): 7 years, $127 million, $61 million guaranteed, $12 million signing bonus.

Tyron Smith (Cowboys): 10 years, $109 million, $40 million guaranteed, $10 million signing bonus.

Negotiations and Positions

Speaking of Watt, here's some content from recent articles that provide insight and perspective on the current status of contract negotiations between J.J. Watt and the Houston Texans:

Yahoo published THIS article about Watt's situation, including these quotes:

One league source told Yahoo Sports the two sides were not close to a deal as of last week. Indeed, the only real news has come from odd (and remarkably early) negotiating flares sent by Texans owner Bob McNair. Less than two weeks ago, McNair told ESPN.com that the team is willing to use the franchise tag on Watt after 2015, and has settled on a "team-first" stance in the approach to negotiations.

That raised a few eyebrows in the NFL agent community, largely because talk about franchise tags and salary-cap responsibility are typically break-the-glass options for ownership – and employed when negotiations are going poorly.

For his part, Watt has said almost nothing. But what little he does say is clear: He knows he has vastly outplayed the salary he'll be paid this season, and he has noticed other elite players from his draft class getting such disparities resolved.

"It's been great to see some of these [2011] guys get deals, because it shows that their teams appreciate what work they put in," Watt told Yahoo Sports last week. "You work extremely hard in this league to do as well as you can and hopefully earn that respect and to earn that appreciation.

"It's nice that those teams have shown that appreciation of their players. Those decisions aren't made by me. I know what I can do. I can work as hard as I possibly can. And then I'll let the team decide what I'm worth. Then we'll see how it goes from there."

Asked specifically how he feels about franchise tag talk, Watt paused, smiled, and reiterated his message.

"I like to see those guys be shown appreciation so far," he said. "I hope that I've worked hard enough and hopefully I've put myself in a situation where I can be shown some of the same appreciation. Hopefully they feel I've outplayed my current contract, but the end of the day, we're paid to play football. If I got paid a little more, I wouldn't be terribly upset."

Until then, Watt will bide his time and live by a well-intentioned maxim.

"If they give you $2 of wage, give them $3 of work," Watt said. "That's what I'm going to try and do."

Personally, this part of the article really irked me:

Watt will be the ninth-highest paid player on the Texans this season, at $3.575 million. That's less than rookie Jadeveon Clowney ($4.04 million), who has yet to take a regular-season snap in the NFL.

So we have eight other players on the roster getting paid more than Watt, including a rookie who hasn't played a single regular season game yet.  Sure, Jadeveon Clowney looks like he's worth it, but Watt has been delivering at a Hall of Fame level for three seasons already!

The Chronicle posted THIS article regarding Watt's contract situation, which includes:

"When you look around the league and you see a couple guys from the 2011 draft class get contracts, it’s just nice to see appreciation being shown," said Watt, following the Texans’ first practice against the Denver Broncos. "With the new (collective bargaining agreement), I think one of the goals was to make guys earn their pay. No more big paydays up front. … When a team gives a contract after the third year, they’re saying, ‘We think you’ve earned this.’ And so, I don’t know if (the Texans) feel that way or not. But I sure hope I’ve put in all the work and I’ve put in everything I can do to hopefully earn it."

Watt acknowledged it would be "great" to agree to an extension before the Texans’ Week 1 contest against the Washington Redskins on Sept. 7. He also knows he has a special bond with Texans fans and the Houston community.

"I always try to put on the best face I can for this organization," Watt said. "And I’ll always try and be the best ambassador I can be for the Houston Texans."

Watt said his business goal has always been to outperform his contract. If the Texans pay Watt $2, he wants to play like he’s worth $3, thus making people think he’s underpaid because of how hard he works.

"That’s just personal pride," Watt said. "And that’s the way that I was raised and that’s the way my parents taught me."

Watt said he’s in total football mode three weeks before the regular-season opener. If he needs to become directly involved in negotiations, though, he will.

The Texans’ long-term dollar value for one of the premier defenders in the NFL remains to be determined. But Watt already knows where his loyalty stands.

"I love the fans that we have, I love the relationship that we have. The city’s so great and the way that they’ve treated myself and my family, I couldn’t ask for a better place to play," Watt said. "So I sure as heck hope that we can make something happen. … And I hope that I’ve given the effort and everything they could want to hopefully show that appreciation (back)."

CBS Houston/Sports Radio 610 posted this article about Watt at practice up in Denver yesterday, where this exchange took place:

While in the middle of hitting the blocking sled the sled seems to malfunction.  A member of the media tells Watt that if he breaks it he buys it.  Watt responded with an off the cuff remark not normally seen from the star.

"I don’t got that kind of money man," Watt said. "Commercials only pay so much (inaudible)."

Here is that video:


Tweets of Note:

None of this contract business seems to be distracting Watt, as he is putting it to the Denver Broncos in practice so far:

Face of the Texans?

J.J. Watt is the face of the Houston Texans franchise, pure and simple.  The Texans lost their franchise quarterback last year when Matt Schaub imploded and was sent packing to Oakland.  Andre Johnson is the most decorated and longest tenured player in franchise history, but he has always been reclusive in personality.  Arian Foster has been doing everything possible to distance himself from the media, thus stifling the primary conduit to fans and the general public.  Brian Cushing has somewhat disappeared from the limelight after unforeseen season-ending injuries in the last two consecutive years.

Meanwhile, Watt has hoisted up the Houston Texans banner in stunning fashion on and off the field.  Bob McNair constantly strives for the Texans organization to be perceived as being comprised of classy gentlemen with high character who excel in competition on the football field.  He couldn't have used a science lab to formulate a player more to those characteristics than what J.J. Watt delivers every single day.

Pay the man!