Contractual relations in the NFL, Premier League & MLS: a comparison – Part 1
Published 05 April 2013 By: Ryan Becker
Mississippi Sports Law Review Editor-in-Chief Ryan Becker compares and contrasts the way in which the National Football League, the Premier League and Major League Soccer approach their legal contractual relations with its players.
A contract is an agreement between two or more parties creating obligations that are enforceable or otherwise recognisable at law. In order to create an enforceable contract there must be an offer from one person (the offeror) to another person (the offeree) to do or not do something. The offeree needs to communicate an acceptance of the offer. Lastly, there needs to be consideration of some kind, normally payment, for the benefit gained from the contract. In sports, this concept is a simple one to understand — a team makes an offer to a player, the player accepts the offer, and the consideration is the team paying money for the player’s appearances and performance.
The form contracts between two of the most popular sporting leagues in the world, the National Football League (NFL) and the English Premier League (EPL), are very similar. However, the terms in the collectively bargained for agreements are substantially different, which result in very different outcomes for the players.
In the Global Sports Salaries 2012 Survey, seven of the ten richest teams by average salary were football clubs: two in La Liga, two in the EPL, two in Serie A, and one in Bundesliga. On that same list, only one NFL team was in the top seventy-five for highest average salary. The strict (hard) salary cap in the NFL directly influences the lower average league wide salary, because teams are prohibited from spending more than a certain amount of money on their entire player roster.
The professional athletic career is different from any other job. Due to the nature of their contracts, many fans, and often the athletes themselves, do not truly understand the components of each contract. With millions of dollars involved, it is a surprise to see that the contracts are largely reduced to a simple standard form.
The National Football League standard player contract consists of twenty-five (25) paragraphs. Every player in the league has the same standard contract. The standard contract consists of three spaces to complete: the yearly base salary, the choice of law, and the signatures. One of the main reasons for a standard form contract is that the teams have the bargaining power in the collective bargained negations that establish the standard contract. The standard contracts make it easier and more efficient for a team’s front office personal to sign players to their roster and negotiate the important things (i.e. money) rather than negotiate on twenty-five (25) different paragraphs for fifty-three players (53). In 2012, the NFL salary cap was set at $120.6 million; this amount is the maximum amount a team can spend for all the players on their roster. At the end of the 2012 season, sixteen (16) NFL teams are $12.9 million or more under the current salary cap.
The true items that are negotiated in an NFL contract are the length in years, the salary, and anything in the addendum. The bulk of the negotiations occur over the items in the addendum. The addendum usually focuses on guaranteed money, bonuses, and how portions of the salary or signing bonus could potentially be forfeited. Standard bonus incentives include an option for community relations/sponsor appearances, signing bonuses, guaranteed money and other player incentives. All addendums are different and are structure toward the specific NFL player. An irreplaceable, or “star,” player is the more likely to have many terms negotiated in their addendum. While backups will almost always have little or no negotiated items in their addendums.
Paragraph 4 outlines the publicity and National Football League Players Association group-licensing program. Paragraph 4 makes it a contractual obligation for the players to cooperate with the media and participate in reasonable actives to promote the team and the League. Additionally, this section grants the league the right to use the player’s name and likeness in any form of media for the purposes of publicising or promoting NFL Football. However, as Article 51 of the CBA states, clubs may not unreasonable refuse to permit a player to endorse a product, unless the NFL has banned that NFL that product. This allows the players to wear any type of gloves, footwear, or other products during the game, even if they the items they wear are not sponsors of the NFL (which is in stark contrast to Major League Baseball).
Paragraph 6 states that the player will be paid their entire yearly salary over the course of the season. This starts with the first regular season game played each season. That means NFL players are paid their entire base salary during the seventeen-week NFL season. However, if the clubs and the player agree to defer compensation in the contract, the team is then not required to pay the player every week.
If the player’s team goes to the playoffs, they will be compensated within fifteen (15) days after the completion of the game in question. For the playoff games, every NFL team is required to compensate their players the same amount. Therefore, in a playoff game, Tom Brady will make the same amount as kicker. The collective bargain agreement outlines these amounts; these are not negotiated into the specific player contracts. For the 2012 season, every player on the Super Bowl winning team will receive an $88,000 bonus for that game. The player’s bonuses for playoffs are not included under the salary cap.
One other interesting provision outlined in the CBA, but not outlined in the specific contract is the overweight provision. For the 2012 season, if a player reported to training camp overweight, the club had the right to fine that player a maximum of $495 per lb. that they were overweight. This fine could be imposed a maximum of twice per week. Additionally, in Paragraph 8 of the standard contract, a club has the right to cut an out of shape player from the squad. Unlike in Europe, where this would almost certainly be a violation of discrimination law if the player was able to do their job adequately whilst being overweight or otherwise out of shape; in the States such clauses in athletic contracts are legal.
Paragraph 11 outlines the skill, performance, and conduct of the player. This paragraph states that if a player’s skill or performance is unsatisfactory as compared with that of other players competing for position, the team has the right to terminate their contract without prejudice and with no right to question the decision. In essence, the club can cut a player for whatever reason. The cut player will no longer be able to collect any salary that would have been due had the player stayed on the team. Luckily, for the player, he is not required to forfeit the salary he has already earned unless severe circumstances arise. Such severe circumstances often include violation of the league’s substance abuse policy, failing to show up to training camp, or other continuing violations.
The NFL contract is a relatively simple one, primarily because most of the parts are already collectively bargained for. This, however, does not mean the contracts are easy to negotiate. From the start NFL contracts are unfavorable to NFL players, but through a successfully negotiated addendum, the contracts can become much more favourable.
As one would expect, the EPL has a different contract than the NFL. One of the primary reasons for this is that for football players there are alternative leagues to earn a living in, for the American football players there is no true alternative to the NFL. Due to that most of the contracts for EPL football players are more favorable than they are for NFL athletes. The nature of football in Europe forbids any sort of salary cap, because players would leave a salary-capped league to play for a team in a non-salary capped league.
In the 1995, the famous Union Royale Belge des Sociétés de Football Association ASBL v Jean-Marc Bosman case fundamentally shifted the bargaining powers of football players. In that case, Bosman was prohibited from leaving RFC Liege to go to FC Dunkerque after his current contract with RFC had ended. FC Dunkerque was unable to pay the fee that RFC demanded, thus the deal fell apart. RFC then, while he stayed with the team, cut Bosman’s wages by nearly 60%. The case said that once a player had reached the end of their contract, they could leave if no new deal was agreed upon. As a result, players could move freely after the expiration of their contract and the clubs would be left without any compensation after losing one of their performers. This case fundamentally altered the balance of power in European football and even other American sports played in the UK such as the British Basketball League.
In a footballer’s contract, there is nothing that truly binds the players to that league after the contract has expired. If a footballer refuses to sign an extension with his current club, in the last six months you can start speaking to other clubs. To deal with the issue of players leaving their club without signing an extension, clubs are giving longer and more lucrative contracts to footballers because they have a great fear of losing their talent to another club. This is true even if they have not done enough on the pitch to earn that money yet. In essence, the Bosman ruling has allowed players to threaten not to honor their current contract unless an improved contract is offered.
In regards to the specific contracts, in comparison to the NFL contracts, EPL contracts are guaranteed. Unlike NFL teams, clubs are obligated to pay the whole contract even if a player is injured or if they fail to perform up to their contract; however, if a player breaches his contract, it may be cancelled, although this is a grey area. There are minor exceptions to this rule including: if a player is guilty of Gross Misconduct or convicted of any criminal offence, whether the punishment consists of a sentence of imprisonment of three months or more (which is not suspended). Footballers are paid during the entire calendar year, usually on a monthly basis, but sometimes fortnightly or weekly. Like the NFL contracts, many EPL contracts have performance-based incentives. However, because of the large salaries, many clubs are now looking to incentivise them with lump sum payments according to what they win at the end of the season, rather than the traditional win bonus paid according to individual results. In addition to that, some players will have additional bonus structures built into their contracts; goalkeepers may have clean sheet bonuses and strikers goal scoring bonuses.
The standard form contract for Contract players is 18 pages in length. It is much longer than the standard NFL Contract. The duration of contracts are not specifically outlined, but the EPL does limit contracts for players under the age of 18 to a maximum of three years. The actual terms of player contracts are confidential and private. Except for several exceptions, the contract is not to be divulged or disclosed to any person, (either natural or corporate) by the Club or the Player or the Agent of the Club or Player.
In part 2 Ryan will finish his look at the EPL and look at the unique approach taken in MLS.
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- Tags: American Football | Football | Major League Soccer (MLS) | Premier League | United Kingdom (UK) | United States of America (USA)
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Ryan is in his final semester of law school at the University of Mississippi. He graduated magna cum laude with a degree in Sports Management from Florida State University in 2010. Ryan has worked in for numerous sports agencies in the States and has gained valuable experience working with contracts which have ranged from professional team deals to athlete endorsement agreements.