Inside The NFL’s Fight Over Fully Guaranteed Player Contracts Like Deshaun Watson’s

The Cleveland Browns are paying their controversial quarterback the most guaranteed money in NFL history, angering other team owners and drawing the interest of the players union. Top players around the league, meanwhile, are licking their chops.

Before Deshaun Watson takes the field Sunday in his season debut as quarterback of the Cleveland Browns, he’s already altered the financial balance of power in the National Football League.

That’s because Watson, 27, signed a five-year, $230 million contract that has a rare stipulation. It’s the most lucrative in league history because it’s fully guaranteed. That means Watson gets his money no matter if he’s hurt or fails to play at a high level. This single contract has already begun to tarnish negotiations between team owners and players. In the near future, it will help make a handful of those players very wealthy.

“Deshaun Watson’s contract is truly transformational,” Mike Tannenbaum, a former executive with the Miami Dolphins and the New York Jets, told Forbes. “Every dollar of it is guaranteed. That’s game-changing.”

Part of the controversy surrounding the contract is moral. Watson has just finished serving an 11-game suspension for violating NFL policy — he was accused by more than two dozen women of sexual misconduct. He has denied wrongdoing and settled with 23 of the individuals. The Browns declined to comment for this story. So did Watson’s representatives at Athlete’s First. At a Thursday press conference, Watson said he would only answer football-related questions. He said he was excited to be back in uniform and his focus was being “locked-in” on football.

SHOW ME THE GUARANTEED MONEY

At $400 million, Patrick Mahomes has the biggest total NFL contract, but measured by guaranteed money, it’s all Deshaun Watson.

The NFL must approve all player contracts, and some observers, such as Seton Hall University sports business professor Charles Grantham, say the NFL’s support for giving a game-changing contract to someone accused of such awful behavior could cost the league business. It especially sends the wrong message to women, Grantham said, a demographic the NFL is trying to attract.

For better or worse, however, it’s the economic ramifications of the contract that threaten to change how the league operates. Since Watson signed with the Browns in March, none of the 32 NFL teams have offered similar guaranteed contracts to other players. That fact hasn’t escaped the attention of the NFL Players Association, which filed a grievance in October claiming team owners are colluding to shortchange the players.

Some of the league’s best young players are no doubt watching the drama unfold with an eye toward a Watson-like payday. Baltimore Ravens quarterback Lamar Jackson, the 2019 NFL most valuable player, is surely one of them.

“It’s like, ‘Damn, I wish they hadn’t guaranteed the whole contract,’” Ravens owner Steve Bisciotti, the man most likely on the hook for Jackson’s next contract, told reporters at the NFL meetings in March, referring to Watson and the Browns. “I don’t know that [Watson] should’ve been the first guy to get a fully guaranteed contract. To me, that’s something that’s groundbreaking, and it’ll make negotiations harder with others.”

Other young quarterbacks who must be watching are Joe Burrow, who led the Cincinnati Bengals to the Super Bowl last year in his second season, Jalen Hurts of the 10-1 Philadelphia Eagles and the Los Angeles Chargers’ Justin Herbert. Rising stars at other positions, such as Minnesota Vikings receiver Justin Jefferson and Dallas Cowboys linebacker Micah Parsons, could also cash in bigtime. Just ask an agent.

“Everyone thinks it’ll be a change for the better,” said Wasserman sports agent Chafie Fields, whose clients include the Browns’ Amari Cooper. “But you need supreme leverage.”

The Cowboys, valued by Forbes at $8 billion, have an edge when it comes to signing players to guaranteed deals over a team like the Bengals, who according to Forbes are worth $3 billion. Neither club is going broke, certainly, but when owners sign a player to a fully guaranteed contract, NFL rules require the team to place the full dollar amount of the contract into an escrow account. Some owners, and family members, rely on income from the team for their livelihoods. Others, such as the Browns, which are owned by truckstop mogul Jimmy Haslam, who’s worth $5.5 billion, can afford to squirrel away $230 million more easily than some other organizations. The Watson deal could divide the NFL teams into haves and have-nots, with only the wealthiest owners able to lure top talent with guaranteed contracts.

Watson hasn’t played NFL football since the 2020 season. Evidently that’s not an issue for Haslam and the Browns, who’ll pay him more in guaranteed money than three Super Bowl-winning quarterbacks. Patrick Mahomes of the Kansas City Chiefs has a ten-year, $400 million contract, but only $141 million of that is fully guaranteed, according to contract-tracking website Spotrac. Watson will also get more guaranteed money than the Denver Broncos’ Russell Wilson, whose five-year, $242.6 million deal guarantees just $161 million, and two-time MVP Aaron Rodgers, who signed a three-year, $150 million extension with the Green Bay Packers in March.

After the Browns determined that Baker Mayfield, the top 2018 draft pick, wouldn’t be the face of their team, they went hard after Watson and traded six draft picks, including three first-rounders, to the Houston Texans for the right to negotiate a deal with Watson. Haslam, who paid $990 million for the Browns in 2012 (Forbes estimates the team’s worth today at $3.85 billion), used the fully guaranteed clause to lure Watson. “It was a one-off situation,” Fields said. “Cleveland was in a bidding war and felt they needed to do what they did to get the player they wanted.”

Fully guaranteed deals remain an anomaly in the NFL. In the first, going back to 1996, the Oakland Raiders reportedly signed their first-round pick Rickey Dudley, a 6-foot-7 tight end from Ohio State, to a five-year, $8.8 million deal that was considered fully guaranteed.

“It’s a baseball-type deal,” Dudley’s agent, Joel Segal, told USA Today at the time.

To get a guaranteed contract, Dudley skipped his signing bonus, a component of most NFL contracts. That upfront money is the bait that owners use to lure players into team-friendly deals. Signing bonuses could become more rare as players cash in on Name, Image and Likeness money during their college years, giving them more incentive to negotiate long-term guarantees.

Kirk Cousins struck perhaps the most notable fully guaranteed deal when he signed a three-year, $84 million contract with the Vikings in 2018. That came after the quarterback played two years in Washington under a so-called franchise tag, which pays a set amount to one designated player on a given team.

Because NFL teams operate under a so-called hard salary cap, paying more to one player means paying less to others. That’s why so many teams with young quarterbacks do so well — they can afford to sign better players at other positions because their quarterbacks are still compensated according to rookie deals that pay out less.

Tannenbaum said he never offered a player a fully guaranteed contract, though some agents proposed them.

“It’s saying no in the most eloquent way,” Tannenbaum told Forbes. “NFL negotiations always come down to: How much risk is it? Who has it? And when?” Tannenbaum added, “What’s so unique about Watson’s contract is the Browns assume all the risk. That’s significant.”