Welcome back to another chat and welcome to my first chat being done on campus at ESPN headquarters in Bristol, CT. I'm here for some television but also to promote my auction item in the Jimmy V online auction, so I'll say upfront, if anyone's interested, go to ESPN Radio's homepage which will go to the online auction, where I'm offering a private tutorial in sports. It's for a great cause, so check it out. And now, let's get to your question.
Do owners of Packers shares get a divdend or anything like that with a regular stock? or is owning stock in the team largely ceremonial?
I experienced nine days in my career with the Packers where the financials came out and the usual reaction for agents and players to call me and tell me how I should spend that profit. Having said that, the numbers yesterday were quite impressive, a higher profit than I ever experienced in my decade in Green Bay. That $42 million profit would certainly near or at the top of financial statements around the league. As to the stock sale, which raised over $60 million, that is something that is truly unique to Green Bay, where they were grandfathered in as a public corporation some 50 years ago. The stock is completely ceremonial, has no resale value and does not pay dividend. Stockholders are aware of that through a disclaimer when they purchase the stock. Non Packer fans wonder why people buy the stock, but Packer fans feel like they have a priceless piece of the organization, no matter whether it's "real stock" or not.
With the July 16 date looming, doesn't the Saints just wait Brees out? He has to play under the tender after that date. Sure, it will only be a one year deal at that point, but at least the Saints get him for what they want.
The Brees negotiation is obviously reaching a reckoning point on Monday. My sense is that the Brees camp has been somewhere over $20 million a year and the Saints have been in the $19 million range. Some would say that seems like an easy bridge to cross, however, the devil is in the details. The Peyton Manning contract with the Broncos seems to be at issue here. Although Manning's average is $19 million, the Brees camp would say that is for a QB that hadn't played in a year and is three years older than Brees. The Saints would say, that is the established market as recently as three months ago, for the top level QB in the NFL. Of all of the franchise tag players, I do believe this is the most likely deal to get done before Monday. Deadlines spur action and there will be action in the next few days in this deal. I just have a feeling that this gets done probably around the magic number of $20 million on average, with a guarantee level in the $50 million range. We'll know soon.
Andrew, How did you get involved with the Jimmy V Foundation work? Is it weird being auctioned off?
The auction people got in touch with me a few weeks ago about offering what knowledge I could to help out the V Foundation auction. I was only too happy to offer my services as Jimmy V was inspiring to me and it is such a great cause, especially having seen cancer effect family members and friends. So, the opportunity to offer my knowledge from years in the business of sports was a natural. I hope the item brings a lot of worthy money to the cause.
I figured once the Bears got some of their rookies signed and the new GM in place, that the Forte deal would get done quick, yet there's been nothing. How worried should Bears fans be?
The Forte situation shows the power of the franchise tag. It was originally designed to protect the true franchise QBs such as Elway, Marino, Favre, etc. It has morphed into much more than that, where teams are taking their best free agent for a particular year off of the market. I feel, especially, for Matt Forte because he knows as the Bears know that he has limited time as a premier back. The tag allows the Bears to "squat" on his situation, paying him a high wage, but not sinking long term money into a position that has limited shelf life according to the averages. So my sense is that this deal does not get done and the Bears let him play out a tag year. The ultimate question for Forte is whether his productivity on the field is not necessarily helping him in his contract drive, but actually hurting him.
What is the major hold up on all the Top 5-10 draftees contracts? Language? $$$ ? I thought this was all resolved in the new CBA
That's an excellent qusetion. What was resolved in the new CBA was how much these guys are going to make. The issue is not money here and, although I do not know for sure, I think it is all about language now. Specifically "offset language." Which allows the team to get back money if they release the player and he signs with another team. Agents are fighting the inclusion of offset language while teams are holding fast to it. The highest pick to sign at No. 9, Luke Kuechley, does not have offset language and the agents are using that for precedent for the picks above him. The teams are still fighting it, thinking this will be precedent for their future top picks. Ultimately, it will come down to whoever goes first in these top picks will give a better argument for one side or another to not have offset language. Like the Brees situation, this will come down to the wire, probably a couple of days before camp starts.
So where does that money go that the Packers bring in as profit? There's no one owner to pocket the money.
The Packers profit goes into something called the Preservation Fund, which was originally set up to protect against a potential league without a salary cap and to always give the Packers financial resources to sign players. The one thing the Packers have that very few franchises have is a complete investment into the football operations, in other words, the profit does not go towards other business interests of ownership: it goes right back into the team, the players, and the facilities. While Green Bay does not have the geographic desirability of other places, this focus on football can be very attractive to players.
Was the point of Brees' grievance just to see if his first Franchise tag with San Diego counted against his three? What was the result and how does it impact things moving forward?
The point was to give his negotiation some more leverage in setting a higher price for a potential tag next year. Thus, if Brees plays on the tag this year and next his two-year earnings would be $40 million, compared to a previous number of $36 million. Ultimately, the ruling only matters is if we are in a franchise tag situation again in March and my sense is he'll have a long term deal by Monday.
When people say that a certain amount of the contract is guaranteed, what does that mean? In what cases would the rest of the contract not be paid out?
There are two types of guarantees: skill and injury. The more potent guarantee for a player is a skill guarantee which protects him if he is released. An injury guarantee protects him if he is unable to play the year following the year of injury. Injury guarantees situations are rare as a player is usually recovered by the following season. Of course, all players want a full skill and injury guarantee, but this becomes a negotiation. It is interesting watching the numbers start to come out in the NBA where these contracts are fully guaranteed. In the NFL it is rare to see a contract guaranteed past the second year of the deal, except of course for top draft picks, who have exchanged lesser contracts for more guaranteed money.
Andrew, do teams put a lot of value, time preparing for the supplemental draft?
It obviously depends on the year and the caliber of player, but teams will send their area scouts to look at the player and, if warranted, send their national scouts and GM to check on players that they may want to draft. In my years in Green Bay, I would end up monitoring the supplemental draft from the office because scouts and coaches were all on vacation. I certainly knew if we had an interest in anyone and there was any potential for drafting. For people who don't know, a supplemental draft pick forfeits the team's pick for the next year. So, if next week a team picks Josh Gordon in the fifth round, they will lose their fifth round pick in 2013.
So, which side is in the wrong here? From what I've read, the Saints have offered a deal worth more than Peyton Manning's. What more can Brees ask for?
I wouldn't say either side is wrong, having been on both sides of a negotiation. This is a tough one and it is actually complicated by two deals done for the same player in Peyton Manning. The Peyton-Colts deal is much more favorable for Brees; the Peyton-Broncos deal is more favorable for the Saints. And to complicate matters further, the agent, Tom Condon, did both of those deals and is doing the Brees deal. I do admire the Saints in a sense that they have not bowed to the pressure of having an awful offseason and just giving into Brees to get some good news. They have stayed true to their plan for this contract, whatever that plan is and not become emotional, due to the circumstances.
Andrew, have you ever been auctioned off before?
I think when I was single, I was in a bachelor auction and suffered quite an ego blow based on the bidding. So, hopefully, my private tutorial draws a lot better price than my bachelor price.
Thanks for these great questions. I enjoyed doing it from here up in Bristol, where I'll be on SporstCenter at 3 p.m. ET and NFL Live at 4 p.m. ET talking about some of these same issues. Again, please support the Jimmy V auction, whether my item or some of the other great ones that are there. Have a great week, talk to you soon.