The agent’s take: The financial ramifications of Deshaun Watson’s 11-game suspension

The NFL and the NFLPA reached an agreement Thursday in connection with the discipline of Browns quarterback Deshaun Watson for violating the league’s personal conduct policy. Watson is suspended for Cleveland’s first 11 regular-season games without pay and fined $5 million. He must also undergo a mandatory evaluation by behavioral experts and follow his treatment plan.

The settlement is the final resolution of the disciplinary process, ending the NFL’s appeal of the six-game suspension without a fine that disciplinary officer Sue L. Robinson, who was jointly appointed by the NFL and the NFLPA, had imposed on Watson. Robinson found that Watson violated by engaging in sexual assault, conduct that poses an actual danger to the safety and well-being of another person, and conduct that undermines or jeopardizes the integrity of the NFL in its 16 page ruling. The settlement prohibits the NFLPA from seeking legal remedies through the federal court system.

Before the settlement, the NFL had been seeking an indefinite suspension where Watson could seek reinstatement after one year from Peter C. Harvey, who had been tapped by commissioner Roger Goodell to handle the appeal. The 11-match ban is the longest suspension ever imposed under the personal conduct policy for sexual misconduct. What is unknown is whether Robinson mandates that Watson’s massage therapy be limited to team-approved massage therapists for the rest of his career. Watson’s punishment is in line with what the NFL was seeking in settlement talks that took place before Robinson’s decision. The NFLPA rejected the NFL’s reported offer of a 12-game suspension and a $10 million fine.

Watson’s suspension will take effect Aug. 30 when the final 53-man roster cut for NFL teams occurs. Under the NFL’s collective bargaining agreement, Watson will be allowed to return to team facilities and participate in limited activities during the second half of a suspension on terms similar to suspended players under the policy of NFL performance-enhancing substances. On Oct. 10, the day after the Browns’ Week 5 contest against the Chargers, his permitted activities will include attending team meetings, working individually with the Browns’ strength and conditioning coach, meeting individually with Browns head coach Kevin Stefanski, offensive coordinator. Alex Van Pelt and quarterbacks coach Drew Petzing and receive treatment/rehabilitation from the Browns’ medical and coaching staff. Watson will be able to train for the final two weeks of the suspension starting November 14. The suspension will be lifted on November 28. Watson will be eligible to play in the Browns’ Week 13 game against the Texans, Watson’s former team, on Dec. 4. His return will be in Week 13 instead of Week 12 because Cleveland has a Week 9 bye.

Many of the other NFL teams believe the five-year, $230 million, fully guaranteed contract Watson signed in March as part of his trade with the Texans was structured in a way designed to minimize the fallout. financial aspects of the suspension. No salary corresponds to the base salary with suspensions. Watson received a $44.965 million signing bonus and his base salary in 2022 is $1.035 million, his league minimum base salary in the deal. He loses $632,500 (or 11/18 of his $1.035 million base salary in 2022) as he makes $57,500 in each of the 18 weeks of the regular season.

The Browns will get $632,500 in 2022 cap relief from the base salary that Watson will not earn due to the suspension. The $57,500 from the Week 9 bye will presumably be treated as suspensions under the NFL’s substance abuse policy. It would have to be paid in equal installments for the rest of the season after Watson serves his suspension. Watson’s contract isn’t worth it with his 11 game suspension. Their contract years will run as planned, meaning their deal will end after the 2026 season. Their salary caps from 2023 to 2026 will each remain at $54.993 million (a base salary of $46 million dollars and $8.993 million in prorated signing bonus).

Had there not been a deal where Harvey gave Watson the one-year suspension, the NFL seeking his contract would have come at a cost. Essentially, Watson’s contract would have been frozen and resumed in 2023 with a toll. His 2022 contract year would have become his 2023 contract year and the additional contract years would also have been reduced by one year. Instead of Watson’s contract expiring after the 2026 season, it would have ended after 2027. Although the contract would have been delayed by a year, the proration of the signing bonus of $8.993 million per year from 2022 through 2026 would have remained intact.

None of Watson’s $44.935 million signing bonus is in jeopardy, thanks to contract language. Watson’s salary guarantees also won’t be voided. Contractual guarantees are usually void for an exhaustive list of defaults by a player. By voiding it, the player would still have the opportunity to earn the salary that is no longer guaranteed on a non-guaranteed basis.

The relevant language about the Watson Signing Bonus is as follows:

“… a suspension by the NFL solely in relation to matters communicated to the Club in writing in accordance with paragraph 42 which results in the Player’s unavailability to the Club only for games during the 2022 NFL League Years or 2023 shall not subject the player to forfeiture of the signing bonus.”

Without that language, the Browns would have had the right to ask Watson for one-eighteenth of the $8.993 million signing bonus attributed to the 2022 salary cap for each week of the 18-week regular season lost with the 11-week suspension matches The Browns would have had the ability to recoup $5,495,722 (or 11/18 of $8.993 million) from Watson.

The pertinent language that prevents Watson’s warranties from being voided is below:

“… shall not constitute a foul or refusal to practice or play with the Club and the player shall not be in default if: … (iii) The player is suspended solely in relation to matters communicated to the Club in writing by agreement with paragraph 42, which makes the player unavailable to the Club only for games during the 2022 or 2023 NFL years.”

The language is significant because it prevents the Browns from being able to get out of the contract without massive cap consequences due to bad behavior that was known before the trade. In other words, the Browns can’t get out of the deal because of allegations stemming from the suspension of the personal conduct policy. Practically speaking, the Browns wouldn’t have him during the first part of the contract if possible after giving up 2022, 2023 and 2024 first-round picks, a 2022 fourth-rounder, a 2023 third-rounder and a fourth-round pick 2024 round. pick to get Watson and a 2024 sixth-round pick.

The suspension puts to bed a 17-month ordeal that will not be easily forgotten. Watson continued to maintain his innocence Thursday even as Robinson called his conduct predatory and “more egregious than any previously reviewed by the NFL” overwhelmingly disappointing. Last week’s apology rings hollow and seems like something he did specifically so a deal could be reached.


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About the Author: Chaz Cutler

My name is Chasity. I love to follow the stock market and financial news!