Let’s take Kevin Johnson, then, formerly of the Cleveland Browns. He was released mid-last season, and nobody except Carmen Policy was really arguing that he wasn’t performing well (he was, at the time, the Browns’ season leader in recieving yards and touchdowns, which probably made him the third most productive reciever in the division), so there couldn’t have been a contract-negating clause in effect (he has no history of substance abuse and he wasn’t injured, either).
So, what did they get out of releasing him? He had a contract- presumably that means he still gets paid. Did they have to keep paying him until he signed with somebody else (okay, it took a week, but assuming he hadn’t been picked up instantly, would they have had to continue paying?) If so, would he count against the salary cap?
Or can an NFL team pretty much unilaterally withdraw from any player contract it enters into with no repercussion other than a cap penalty?
Really Not All That Bright, from my understanding of Madden 2004 the Browns most likely got out of paying a certain amount of Kevin Johnson’s contract. For example if he had a 2-year contract with $2 million siging bonus, and $4 million in base salary it might look like this (I don’t know the exact numbers of his real contract):
Year 1: bonus: $1 mil; salary: $2 mil.
Year 2: bonus: $1 mil; salary: $2 mil.
Now … if the Browns released Johnson in Year 1 of the contract they would be on the hook for the entire signing bonus ($2 mil.) and whatever percentage of his salary that he earned in year 1. The Browns will take a “hit” of what they owe him against the next year’s cap figure (I believe). However, they do get out of the $2 mil. in salary of Year 2 of the contract. The would save against the cap in year 1, and then save $2 mil in total.
The “cap hit” is the reason the Buccaneers didn’t release Meshawn Johnson this past season. By making him “inactive” they were able to avoid a cap hit, or at least to delay the cap hit.
NFL contracts aren’t worth anything as far as the player is concerned. The team can break it pretty much at will. The signing bonus is the only guaranteed money - which is why you see NFL players holding out on that pretty frequently.
In NFL contracts, the words “bonus” and “salary” are really reversed. The amount a player gets up front as a “bonus” is the only amount he’s guaranteed to get, making it effectively his base pay. The “salary” gets paid as a result of him performing well enough to stay on the roster, and gets cut off if he doesn’t, so it’s more like a bonus.
Kevin Johnson probably got cut right before a big salary payment was due him. The Browns were already out of contention, knew they didn’t want to pay him that much next year, and couldn’t find a trade partner willing to take on his contract (traded players keep their contracts).
How about Earvin Magic Johnson? Did the Lakers have to pay the remainder of his last contract? As I recall, when he unretired for the second time, he got a nice raise and a long contract. Then a very short time later, he retired for the last time but the Lakers still had to pay him. Is that correct?
Only if the contract was guaranteed (like most in the NBA are). If it wasn’t he would be out of luck.
Of course, he did voluntarily retire. Even in MLB that voids a contract. In baseball a player goes on the ‘voluntary retirement’ list and he voids all of his remaining contract at that point. I believe (but I’m not sure) that the team retains some sort of rights to the players services should he wish to come out of retirement later.
No. According to the Boston Globe article I cited earlier: There are two firms that underwrite disability insurance for MLB teams: American Specialty Underwriters International, which is based in Woburn, Mass., and Pro Financial Services in Schaumburg, Ill.
For what it’s worth, Johnson was cut because of performance, his numbers not withstanding. Head coach Butch Davis said: “We have been trying for almost three seasons to help Kevin perform to the level of expectations we have had for him. I am disappointed our staff has not been able to get him to accept the expectations we have of how the wide receiver position should be played.” So in releasing him, they cut rid of a disruptive player.
As to the question of NFL finances, some folks here have confused payroll issues with salary cap issues. The salary cap is an accounting method that limits what each team can spend (all teams have the same limit in a given year) and accounts for payments spread over multiple years. This is basically comprised of all salaries paid out, plus a prorated portion of each signing bonus. If player X signs a 5 year/$5 million deal with a $5 million signing bonus, then the salary cap hit is $2 million a year (1 for salary and 1/5 of the bonus). However, if a player is released before the end of the contract, the remaining portion of the pro-rated bonus is accelerated for cap purposes. Releasing a player (unless he is in the last year of a contract) brings an immediate salary cap hit. If Player X is released after year 1, he counts $2 million against the cap in year 1 and $4 million in year 2 (the remaining 4/5 of the bonus).
By cutting that player, they don’t have to pay him any of the salary for future seasons. However, players who are on the roster any time on or after the first game must be paid for the remainder of the season, In Johnson’s case, the Browns were liable to pay him for the rest of the season if he didn’t play again. However, he was claimed the very next day by the Jacksonville Jaguars, who assumed his existing contract. According to this article in ESPN, that cost the Jags (and saved the Browns) about $391,000.
Retiring players don’t get paid unless it’s part of a buyout or the team agrees to do it. If you give up the sport, the team can terminate your contract- but they don’t always. Magic’s buddy James Worthy is a good example- he retired with two years left on a contract and got paid for both remaining years. The Lakers didn’t have to, but they gave him his money. So, to answer your question, the Lakers didn’t have to pay him. Magic being Magic, they probably did, but I dont’ know about that for sure. The team was not obligated to do so, however.
This money counts against the cap, though, (speculation coming), so it’s probably more common to see some kind of agreement where the team pays the player a settlement and voids the rest of the contract. Teams are just too protective of cap space in this day and age.
Regarding Kevin Johnson, the Browns pretty much absolved themselves of all obligations to him by waiving him, because Jacksonville claimed him and took on the rest of his contract.