6 points Russell Okung made about the NFL salary cap and guaranteed deals, explained by an agent

Los Angeles Chargers offensive tackle Russell Okung isn’t happy about NFL contracts. He made that clear last week in a 17-tweet thread about the state of NFL deals, the lack of guaranteed money in the league, and the need for a very different looking Collective Bargaining Agreement — which expires after the 2020 season.

Okung has firsthand experience with NFL contracts working in a team’s favor, at the expense of the player.

When he became a free agent in 2016, Okung negotiated a contract with the Denver Broncos on his own without the help of an agent. He signed what essentially amounted to a one-year, $5 million deal with a four-year, $48 million option.

The contract didn’t work out well for him. Okung received $3 million in incentive bonuses, but was released in 2017 after only one season in Denver, netting just $8 million from what was originally billed as a $53 million contract.

His second try on the market went better as Okung signed a four-year, $53 million deal with the Los Angeles Chargers with $25 million in guarantees. The deal looks more like a standard NFL contract with large amounts of dead money that dissuade the team from parting with Okung early, but gives the Chargers more flexibility in the final years of the deal.

Okung is now a member of the executive committee of the NFL Players Association.

In his Twitter thread, Okung made six major points about contracts and we talked to NFL agent Greg Linton — who has negotiated several NFL contracts — about the points Okung made:

1. The NFL has less guaranteed money relative to other sports

Of the four major sports leagues in the United States, the NFL is the only one where a fully guaranteed deal is an oddity.

As Okung says, the high injury rate of the NFL and short careers of its players would make it seem like football players are most deserving of guaranteed deals. But it’s that exact roster churn that makes guarantees difficult to secure.

“The dynamics of the way the roster takes shape is so different [compared to other sports],” Linton said. “The Cardinals had, what, like 100 transactions last season? So you have players who are cut, waived, brought up from or sent down to the practice squad — guys who may play for a week or two.”

“From a club’s perspective, if you know you’re going to have about 20 injuries per year, you’re going to have to pay out that money anyway.”

Asking for fully guaranteed deals may be a reality for star quarterbacks like Kirk Cousins, but for the players fighting for spots on an NFL depth chart, it seems like an unrealistic goal.

“If you want to guarantee contracts that way, what you might see, in my opinion, is one-week contracts,” Linton said. “If I’ve got a street guy and I want to bring him in for two or three weeks, I’m not going to sign him for a full season. It’d be like the NBA — the NBA has 10-day contracts — so you’d see a seven-day contract in the NFL.”

The CBA would need to be rewritten to allow such short-term deals, but NFL players may be better off leaving the system as is.

2. Guaranteed deals like Kirk Cousins’ just aren’t getting negotiated

Kirk Cousins signed a three-year, $84 million deal with the Minnesota Vikings in March — the largest fully guaranteed deal in NFL history. It could be the beginning of a trend with other quarterbacks like Aaron Rodgers now in position to ask for a similarly structured contract.

The list of players similarly positioned to do so is small, though.

“These players are speaking for the top one percent of the players,” Linton said. “They’re not thinking about players 40 through 53, they’re thinking about players one through five. You’re not talking about the fourth receiver or the special teams guy who is the fourth or fifth corner — you’re talking about a total of maybe 60 players in the entire NFL.”

For that group of elite players, the allure of large numbers rather than a bigger bottom line can be enticing.

“I lose players every year because an agent will tell players ‘I can get you $60 million,’” Linton said. “I can get you $100 million! It’ll be five years, $100 million with about $8 million in the first two years and a roster bonus of $90 million in year three. I can put anything I want on paper.

“Players are more concerned about getting $50 million than actually seeing $30 million.”

For more players to negotiate fully guaranteed deals like Cousins received — or Darrelle Revis did often with one-year contracts in the back half of his career — players will likely need to be willing to forgo the record-breaking totals for short-term contracts.

3. The CBA needs a full-scale overhaul with the salary cap in the crosshairs

Eradication of the salary cap may be an unrealistic ask from players when the new CBA is negotiated in 2021. The league — and undoubtedly a majority of its fans — will argue that the rigid salary cap is the reason for the NFL’s parity.

In any given season, a team can surge from a basement dweller to a playoff contender, or vice versa. An argument could be made that the salary cap isn’t the reason for that parity and that the nature of the sport levels the playing field, but eliminating the salary cap seems unrealistic.

Rewriting the CBA to allow for more guaranteed contracts is also an odd goal.

“In one statement, he’s saying there’s nothing stopping agents from negotiating for more guaranteed. But in the next statement, he’s saying he need to rewrite the CBA to get more guarantees. You just contradicted yourself,” Linton said.

A more realistic expectation is that the 2021 CBA fight — like most labor deals in pro sports — will be centered around the percentage of league revenue that makes up the NFL’s salary cap.

4. Players, teams aim for big numbers that rarely translate to cash

As previously pointed out by Linton, players are often “more concerned about getting $50 million than actually seeing $30 million.”

Okung agrees here, saying that many of the headlines during free agency don’t necessarily translate into reality.

Just two years ago, Brock Osweiler signed a four-year, $72 million deal with the Houston Texans. But Osweiler didn’t make $72 million from the deal. He received $21 million from the Texans and $15.225 from the Browns after he was traded.

Getting $36.225 million is nothing to scoff at, but represents about half of the total number that drew headlines in 2016.

5. Parts of the CBA include rules that eat a portion of salary cap that could go to players

The “funding rule” is a part of the Collective Bargaining Agreement that reads as follows:

Section 9. Funding of Deferred and Guaranteed Contracts: The NFL may require that by a prescribed date certain, each Club must deposit into a segregated account the present value, calculated using the Discount Rate, less $2,000,000, of deferred and guaranteed compensation owed by that Club with respect to Club funding of Player Contracts involving deferred or guaranteed compensation; provided, however, that with respect to guaranteed contracts, the amount of unpaid compensation for past or future services to be included in the funding calculation shall not exceed seventy-five (75%) percent of the total amount of the contract 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.

What that essentially says is that NFL teams are forced to set aside guaranteed money that hasn’t yet been paid out — like the $58 million due to Kirk Cousins in 2019 and 2020. Cousins’ agent Mike McCartney told 106.7 The Fan that the rule was put in place around 50 years ago because NFL teams “weren’t necessarily paying players on time.”

With revenues now through the roof, this is no longer an issue. But the rule remains and it makes teams think twice about setting more guaranteed money aside.

6. A 2021 labor fight could be really difficult

With players preparing to battle for significant changes to the CBA when it expires in 2021, we could be headed for a labor fight even more significant than the 18-week lockout of 2011.

“The narratives that are being pushed on what the players want, in my opinion, aren’t very realistic from the league’s standpoint,” Linton said. “You want guaranteed contracts, that’s fine. There’s nothing stopping you from getting guaranteed contracts. That does not have to be in the CBA; Kirk Cousins got one. So you’re fighting for guaranteed contracts, but why?”

With the framework already in place for top tier players to negotiate guaranteed deals, there isn’t much reason for NFL owners to take a step back and offer more concessions. The disconnect between what players hope to get in the next CBA and what NFL teams are actually willing to negotiate could set up an ugly battle.

Many of the points made by Okung are likely to be raised in the upcoming labor fight. But the crux of the negotiation will be about the salary cap, and Okung’s thread suggests players want a much different looking CBA in 2021 than what NFL owners want.

That means you should expect a difficult battle on the horizon.