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Old 07-24-2014   #1
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Default The Anatomy of a Holdout -- Agents take

More good insight from Mr. Corry...

Agent's Take: What you need to know when you hear the term, 'holdout'
By Joel Corry | Former Sports Agent
Quote:
Every year when the beginning of training camp approaches, a few players are considered potential holdouts primarily because of unhappiness with their contracts. I was involved in two lengthy holdouts in my agent days with Jimmy Smith and Keenan McCardell. Smith held out for 38 days in 2002 before signing a new contract at the end of the preseason. McCardell's dispute with the Tampa Bay Buccaneers in 2004 lasted 82 days, which resulted in him being dealt to the San Diego Chargers right before the trading deadline.

Alex Boone, Vernon Davis, Justin Houston and Andre Johnson missed mandatory minicamp with their respective teams last month, leading to speculation that their absences could extend into training camp. A holdout should really be a last resort after all other options for a resolution have been exhausted.

Penalties
Teams prefer players to attend the offseason workout program, organized team activities and mandatory minicamp but usually aren't too concerned when they are missed. Skipping these activities isn't without consequences. Players who don't attend the three-day mandatory minicamp are subject to a $69,455 fine under the NFL Collective Bargaining Agreement (CBA).

Missing some or all of these activities can also have contractual ramifications. For instance, Davis lost a $200,000 workout bonus by not participating in the 49ers' offseason conditioning program. Johnson forfeited a $1 million first game of the regular-season roster bonus because of his absence from offseason activities. In order to earn the $1 million roster bonus, he was required to complete 90 percent of the workouts in the Texans' offseason workout program, report on time and fully participate in all of their organized team activities, mandatory minicamp and training camp. Johnson's contract expressly states that he can't earn the bonus if he fails to satisfy any of the conditions.

The penalties under the CBA are much more severe in training camp, which are an effective deterrent for most players. A team can fine a player a maximum of $30,000 for each...

A team can also recover a portion of a player's signing bonus. Fifteen percent of the prorated amount of signing bonus can be recouped on the sixth day of a training camp holdout. It's one percent for each additional missed day with a maximum of 25 percent of the prorated amount during training camp. An additional 25 percent can be recovered with the first missed regular season game. After four missed weeks, a team can recover 1/17 of the prorated amount for each additional week of the player's absence. The maximum a team can recover in a season is the entire prorated amount of the player's signing bonus in that contract year...

Leverage
Players need to objectively assess their leverage and understand the risks and potential ramifications before deciding to hold out. When we had a client contemplating a holdout, we would arrange...

Vernon Davis: Davis reported to the 49ers' training camp but still wants a new contract. Changing his mind...

Justin Houston: Houston reported to the Kansas City Chiefs' training camp even though missed Kansas City's offseason activities and isn't happy with...

Andre Johnson: Johnson undercut any leverage he may have had to force a trade, get his $10.5 million 2015 base salary guaranteed or have an opportunity to earn back the $1 million bonus he forfeited, which have been mentioned as suitable outcomes for him, because of the contract restructures he did in 2011, 2012 and 2013.

Johnson converted $18.5 million of base salary into signing bonus to create salary cap room for the Texans during the three different restructures. Because Johnson didn't have the language allowing the team to recover the signing bonus removed from his restructured contracts or limit recovery to the particular year in which the restructure took place, the Texans have rights to money they wouldn't have otherwise. The CBA prevents teams from recovering base salary after it has been paid. Additionally, signing bonus language from a player's previous contract(s) with a team is typically incorporated into the contract covering the restructure.

The language in Johnson's 2013 contract restructure allows the Texans to recover a maximum of $4,444,583 from him in a holdout this year when it would have only been $469,583 (the prorated amount of signing bonus in 2014 from his 2010 renegotiation) if Johnson hadn't restructured the contract or gotten the more favorable signing bonus language. The Texans can recover $666,687 of signing bonus from Johnson with a six-day training camp holdout when it would have been $70,437 instead. Johnson is risking $1,111,145 of signing bonus if he misses all of training camp when it should have been $117,395 with the better language.

The team-friendly language also effectively removes retirement as an option for Johnson in forcing a trade as Carson Palmer did in 2011 with the Cincinnati Bengals. Players aren't subject to the daily fines for missing training camp with retirement but signing bonus recovery is more onerous on the player. A team can demand repayment of the signing bonus proration from the current contract year and the remaining years of the deal upon the retirement. Johnson's contract runs through 2016. If the player doesn't repay this money, the team can seek an award through arbitration. The Texans could demand $11,364,168 from Johnson if he retired when it should have only been $939,168. Additionally, Johnson would be foregoing his scheduled $10 million base salary for this year by retiring. Palmer didn't have to worry about signing bonus recovery because the proration with his 2005 contract extension ended in 2010.

Johnson's agent and the Texans have had dialogue recently. There are conflicting reports on whether the open lines of communication mean Johnson will report to training camp on Friday.


Holdout dynamics
A holdout is ultimately a test of both sides' resolve. Once a player misses the beginning of training camp, there usually isn't much dialogue with the agent and team early on when there is a contract impasse. If meaningful dialogue on a new contract resumes, it may not be until the middle of the preseason.

Savvy teams will refrain from talking to...

Holdout success/failure
A majority of holdouts don't result in the player receiving a new contract. Prominent players at impact...

Once a player decides to end his holdout, some teams will reduce the fines accumulated as a gesture of goodwill, especially with a player who is one of the most important players on the team or a veteran that commands a lot of respect among his teammates. Occasionally, the team will decide that a trade is in the best interest of all parties if too much damage to the relationship between the team and player was done during the holdout.

The last successful holdout was in 2011 by Chris Johnson when he got a four-year, $53.975 million contract extension from the Tennessee Titans after a 35-day absence. It remains to be seen whether Boone or potentially Johnson will get a favorable outcome by holding out.
snipped, read complete article here: http://www.cbssports.com/nfl/eye-on-...than-you-think
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Old 07-24-2014   #2
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Default Re: The Anatomy of a Holdout -- Agents take

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Originally Posted by Playoffs View Post
More good insight from Mr. Corry...

Agent's Take: What you need to know when you hear the term, 'holdout'
By Joel Corry | Former Sports Agent

snipped, read complete article here: http://www.cbssports.com/nfl/eye-on-...than-you-think
So, unless I'm reading that wrong, Andre's agent screwed the pooch when Andre reworked the contracts...they aren't as player-friendly as many would believe.
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Old 07-24-2014   #3
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Default Re: The Anatomy of a Holdout -- Agents take

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Originally Posted by disaacks3 View Post
So, unless I'm reading that wrong, Andre's agent screwed the pooch when Andre reworked the contracts...they aren't as player-friendly as many would believe.
Yep, Andre is great at football, and terrible at negotiation, and selecting people to negotiate on his behalf.
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Old 07-24-2014   #4
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Default Re: The Anatomy of a Holdout -- Agents take

I think AJ was also naive enough to believe Bob McNair and Rick Smith. It appears that the team has AJ in a checkmate position at the moment. Big corporations have a way of doing that to individuals that trust them and do not hire respectable and capable representatives of their interests as individual players.

AJ is paying for having his obviously incompetent uncle as agent and for trusting a franchise that did not deserve it. We all have our crosses to bear, and this is AJ's.
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Old 07-24-2014   #5
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Default Re: The Anatomy of a Holdout -- Agents take

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Originally Posted by Double Barrel View Post
AJ is paying for having his obviously incompetent uncle as agent and for trusting a franchise that did not deserve it. We all have our crosses to bear, and this is AJ's.
The cash value of AJ's contract compared to other WRs is ranked*:

5th in 2014
3rd in 2015
3rd in 2016

He's in an "indentured servant" position, but he is getting paid for it and it's on him to secure good representation in business dealings.

*may/may not drop a spot after Roddy White's deal
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Old 07-24-2014   #6
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Default Re: The Anatomy of a Holdout -- Agents take

Quote:
Originally Posted by Double Barrel View Post
I think AJ was also naive enough to believe Bob McNair and Rick Smith. It appears that the team has AJ in a checkmate position at the moment. Big corporations have a way of doing that to individuals that trust them and do not hire respectable and capable representatives of their interests as individual players.

AJ is paying for having his obviously incompetent uncle as agent and for trusting a franchise that did not deserve it. We all have our crosses to bear, and this is AJ's.
His uncle probably had a play initially but AJ hired Kennard McGuire I believe in May of 2010 so the renegotiation included a "real" agent. Either way, I hope this gets resolved sooner vs later.
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Old 07-24-2014   #7
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Default Re: The Anatomy of a Holdout -- Agents take

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Originally Posted by playa465 View Post
...AJ hired Kennard McGuire I believe in May of 2010 so the renegotiation included a "real" agent. Either way, I hope this gets resolved sooner vs later.
Yep. McGuire represents Brandon Marshall, Jacoby, and Teddy Bridgewater too.
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