The final resolution to the treatment of fully-guaranteed salaries in the event games are lost in 2020 has created an extra incentive for certain players to seriously consider opting out before Thursday’s 4:00 p.m. ET deadline. Specifically, players who have fully-guaranteed salaries in 2020 should take a close look at opting out, based on the specific terms of the remainders of their contracts.
The NFL and NFL Players Association resolved the issue of guaranteed salaries for lost games in 2020 by agreeing to roll any guarantees over to the next year of the contract that lacks the guarantee, if the season is canceled after it begins. For example, if a player has a $10 million fully-guaranteed salary in 2020, a $10 million non-guaranteed salary in 2021, and half of the 2020 season is lost, the player would receive $5 million in 2020, and $5 million of his $10 million base salary in 2021 would become fully guaranteed.
For players who are young enough, healthy enough, and skilled enough to not be cut during the first non-guaranteed year of a given contract, this example would result in total salary of $15 million for 2020 and 2021. The player would have gotten $20 million, however, if all games were played.
Enter the opt out. Players with fully-guaranteed salaries for 2020 who choose to opt out will have the fully-guaranteed salaries bumped to 2021. Under the example set forth above, the non-guaranteed salary of $10 million would move to 2022, allowing the player to make $20 million for his next two years of football while avoiding a season of uncertainty, added health risk, and the potential loss of significant income through the cancellation of games.
Broncos right tackle Ja’Wuan James may have considered this very angle in deciding to opt out. His $9.85 million salary for 2020 was fully guaranteed; thus, he now has a $9.85 million fully guaranteed salary for 2021. His 2021 (now 2022) salary of $11 million is guaranteed for injury, and $5 million of it becomes fully guaranteed on the fifth day of the 2021 (now 2022) league year.
If James hadn’t opted out, and if the NFL plays only half of the 2020 season, $4.925 million of his 2020 salary wouldn’t have been paid, and $4.925 million more of his $11 million salary in 2021 would have become fully guaranteed. In other words, he’d still get $11 million in 2021, but he’d lose $4.925 million in 2020.
By opting out, James gets the $9.85 million fully-guaranteed salary in 2021. He’ll then have a chance to make the full $11 million in 2022, unless the Broncos cut him early enough that he’d have a shot at replacing the $11 million on the open market.
To put this in the simplest terms possible (if that’s even possible), James’ decision to opt out represents a hedge against the possibility that games will be lost in 2020 — games for which he ultimately would never be paid.
Each player’s circumstances will have to be considered in making the final decision as to whether it makes sense to opt out for business reasons. The overriding point is this: Players with fully-guaranteed salaries in 2020 should be considering their own circumstances very carefully in the time remaining before the opt-out window closes, because it could make sense for them to opt out and to push the fully-guaranteed 2020 salary to 2021, when the chances of all 16 games being played (and the guaranteed money being truly guaranteed) will be much greater.
Finally, to those who are thinking or saying (or tweeting) that players should not make business decisions regarding an opt-out right crafted specifically to address situations of true concern arising from the pandemic, the rules are the rules. It’s foolish for NFL players to not evaluate their rights under whatever rules apply, and to consider their options as an objective, dispassionate business proposition.
NFL teams do precisely that, all the time.