tarell-brown-brandt-story

The $2M Mistake

Bad communication cost the 49ers’ Tarell Brown big. How does that happen?

By
Andrew Brandt
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The MMQB’s Andrew Brandt will answer your questions in a regular mailbag. Send them through Twitter. Here, Andrew addresses the most common issues from the past week:

Q: What is your take on Tarell Brown losing $2 million for failing to show up for 49ers offseason workouts?

A: Something doesn’t feel right here, beyond the simple explanation of negligence by the agent. It’s easy—and justified—to pile on agent Brian Overstreet for failing to apprise Brown of his need to show up to team workouts to escalate his 2013 salary by $2 million, and Overstreet should bear considerable blame if that is in fact what happened. Certainly, as agent and client, they should have communicated at some point during the offseason about Brown’s non-attendance at workouts and the consequences of his absence. However, beyond conveniently throwing Overstreet under the bus, let’s look at the two other parties in this triangle.

I find it hard to believe that Brown was truly ignorant about a $2 million clause in his contract. In more than 20 years of dealing with professional athletes, as both an agent and a team executive, I learned the two things players talk most about are, in no specific order: 1) money and 2) women. Most players know exactly what they make, down to the dollar, and some even define themselves by those earnings. Now, as Brown enters the most important season of his career—his contract is up after 2013—he never thought to check into any financial reward or penalty regarding team workouts, something the vast majority of players choose to attend? Seriously?

And what about the 49ers? Coach Jim Harbaugh says he did not know about the clause. Although when I was a team executive I would not inform coaches about playing incentives, to avoid any appearance of impropriety in our playcalling or gameplanning, there was no similar need to insulate them from workout clauses. Whether Harbaugh knew or not, it is the job of other people in the organization to know. And a clause that alters cash and cap reserves by $2 million is one that teams not only know about but also keep a close eye on.

Did the 49ers owe the agent or player a heads-up on the $2 million? Technically, no. However, relationships between teams and their players’ agents are important for future business dealings. The 49ers apparently felt that Overstreet, who only had one 49er as a client (now zero after Brown fired him), was not worthy of that kind of goodwill. If Brown’s agent had multiple players on the team, would the Niners have informed the agent about his client’s potential noncompliance? I think so.

My sense is there is more ahead for this unearned $2 million. The amount now becomes a convenient starting point toward an extension of Brown’s contract (or legal malpractice lawsuit). Stay tuned.

Q: What is “offset language” and why do teams care so much?

A: I will try to make this as simple as possible: Offset language allows a team to lessen its future liability if 1) it releases the player who has guaranteed money left on his contract, and 2) the player signs with a new team. The original team’s remaining obligation to the player is “offset” by the player’s salary from the second team.

Teams want these clauses—and are getting them—for several reasons, one of which is that general managers, coaches and contract negotiators all have offsets in their own contracts. Another important reason is so they can declare offset language to be “team policy” to agents and players, whether rookie or veteran, in future negotiations. Certain teams, such as the Jets with Mark Sanchez and the Eagles with Nnamdi Asomugha, have been burned by “no offset” guarantees and are adamant it will not happen again.

For instance, Asomugha, released by the Eagles in March with a $4 million “no offset” guarantee left on his deal, subsequently signed with the 49ers for a 2013 salary of $1 million. With no offset, Asomugha “double dips” and pockets the $4 million from the Eagles and $1 million from the 49ers. Had there been offset language, the Eagles’ remaining obligation to Asomugha would have been reduced by the value of his 49ers salary, to $3 million.

Q: When players like Jeremy Maclin and Dennis Pitta are injured and out for the season, are they always paid their salary?

A: Yes, although with a caveat. A team cannot release a player when he’s injured; if it does it subjects itself to a potential grievance for salary due while the player was injured. In the case of high-caliber players such as Maclin and Pitta, they will clearly receive their full salary.

With players lower on the roster, however, the treatment might not be as simple. Many players have “split” contracts that pay the player a lower salary if he’s placed on injured reserve. Further, teams will “settle” with injured players who have no future with the team, negotiating a lump-sum payment based on the projected length of the injury, usually in the three-to-six-week range, and covering his rehabilitation costs wherever he goes. In other words, teams are paying this class of injured players to go away.

Yes, the business of football can be a cold one.

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19 comments
drawandstrike
drawandstrike

Andrew, I also find it hard to believe Overstreet  just 'forgot' to remind Brown of his workout clause. 

Does not an agent get a cut of the player's earnings? Assuming Overstreet gets 1/3rd of whatever Brown earns, he would have cost himself earnings in the six figure range by not speaking up.  

The agent had  a real financial incentive of his own to ensure that the player made it to the workouts.  What agent willingly watches a couple hundred thousand dollars in an already negotiated contract grow wings and fly away? 

ParisLay
ParisLay

That's on the agent ALL day....anyway are you guys ready for the season to start...so am I...Check out my YouTube show where my brother Zeph (die hard 49ers fan) break down the NFL division by division starting with the NFC West...talking W-L total, improvements, missing pieces and more...plus see who my brother thinks is the real 12th man in Seattle...thanks for checking it out if you do...


http://www.youtube.com/watch?v=wUNPab_6dNQ

DanAG
DanAG

Here's quite a technical question; for players like Asomugha who are effectively getting paid by two teams this season; do they get the money from the team that cut them aggregated out in 16 game cheques or a lump sum? Where does this money get taxed? e.g. if its game cheques is the tax determined by where the player is playing week-by-week or where the original team is playing week-by-week?

KristianColasacco
KristianColasacco

@DanAG He's probably getting paid in 16 week increments although, I don't know for sure because he's receiving his guaranteed money and not the salary. 

As far as the taxes go, he's going to be taxed based on where the money was earned and not where he lives.  If his bonus is prorated over the 16 weeks, it will be taxed according to the state in which Philadelphia plays that week.  If it's a lump sum, the entire portion would be taxed according to Pennsylvania's state taxes. 

And of course, federal but that's a non-variable.

IBSetfree
IBSetfree like.author.displayName 1 Like

What's he need another 2 million for anyway? He has his tattoos, gold chains, and ear rings. What more is there?

Chuck14
Chuck14 like.author.displayName like.author.displayName 2 Like

Great article

Whatever
Whatever

Brown signed his contract in 2009. So you're telling me that he only had a $2 million signing bonus for the last year of his contract? Really? I think Brown's trying to shift the blame.

tj90036
tj90036

where is the damn PRINT BUTTON?  WHAT IS THE PROBLEM????  It was there two days ago (finally) then removed????

ProfessorGriff
ProfessorGriff like.author.displayName like.author.displayName like.author.displayName 3 Like

What ever happened to accountability.  I assume Tarrell Brown has the ability to read.  You mean to tell me he has a contract with his name signed to it that has language detailing a salary for early $3M and he didn't bother to read the particulars and it is now his agent's fault?  Only In America

BigBaltyRocks
BigBaltyRocks

@ProfessorGriff I don't know if he has the ability to read or not, but somehow I doubt that there is a big bold statement on page 1 of his contract that says, "YOU NEED TO SHOW UP TO THESE PRACTICES OR YOU LOSE 2 MILLION." 

Knowing the language of the contracts and communicating that to clients effectively is the reason agents exist. 

Starstruck
Starstruck

Is your point about the $2M that everyone  - the player, the coach, the FO, and the agent - should have known about it?  Are you implying that the team should have warned Brown about it? They did gain $2M cap room as a result of the default, so it seems that they need the cap room more than they need to be concerned about Brown's embarrassment.

drudown
drudown like.author.displayName 1 Like

@Starstruck 

No, the point is that, when evaluating the Brown dispute, the notion the player has no culpability for his own conduct (i.e., non-attendance affecting his compensation) is simply unpersuasive for several reasons- most notably, however, on account of commercial reality in the NFL, e.g., the vast, vast majority of professional players know the terms of their employment and, above all, compensation structure. If nothing else, they have actual notice of the terms (i.e., they signed the contract and presumably read its terms more than once) and choose to ignore their team's workouts at their peril.

Starstruck
Starstruck

@drudown But the article also suggests that the coach and the front office should have known about the workout bonus clause in the contract, and would probably have reminded the agent ( out of professional courtesy)  if the agent had more clients on the team. That implies that the agent had not yet earned that courtesy.

Mike26
Mike26

@Starstruck @drudown Star, arguing with drudown is a waste of time - the topic constantly changes when you use facts against his opinions.

drudown
drudown like.author.displayName 1 Like

@Starstruck @drudown 

When it comes to defending the indefensible (i.e., the 49ers had a duty to inform Brown of the implications) or merely wishful thinking (e.g., the 49ers "would have if it was another agent")...

"I don't do requests." - Arnold, 'The Running Man'

The 49ers didn't ascend to their place in the pantheon of franchises by being shortsighted. I'm sure they will find a way to finesse their player/agent's negligence in a way to induce greater commitment and professionalism from the entire team. Without taking a position, perhaps it is not the agent, but Brown's attitude, that is not owed the "courtesy"...clearly, the entire NFL is now paying closer attention to the consequences of their conduct. 


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