Why NFL free agents rarely take pay cuts

I wrote earlier this week about if the Chiefs can entice veterans to play-for-a-discount-and-win. Here’s why it’s rare for NFL players to take pay cuts.

Chiefs Kingdom is an appealing place to be, even more so now given the current situation. The Kansas City Chiefs offense is set up for success for years to come, and the Chiefs defense might be in an even better situation. It’s a tempting proposition for a veteran free agent to take a discount for a year or two to come play for Chiefs coach Andy Reid and with Chiefs quarterback Patrick Mahomes II.

I wrote earlier this week why these factors could push the Chiefs to the top of the play-for-a-discount-and-win pyramid. It received some varying responses from, “I think a player should be able to play for $10 million a year and take care of their family and future needs” to “I don’t understand why people don’t follow Tom Brady’s approach more often?”

There were several more, on both sides, but I thought I’d play devil’s advocate to my own piece and explain why it’s more rare than most fans expect for players to take pay cuts in the NFL.

Career longevity

This one should be pretty obvious, but I actually think it’s often overlooked by those who think it’s crazy a player won’t take a pay cut to win. Football is one of the most taxing sports on the human body. It’s why ex-players like Steve Young are known to say there were players he played with who loved the game and those who showed up for a paycheck.

The league average career length is only 3.3 years and it’s much shorter for some positions other than quarterback and kicker.

Not every star in the NFL loves to play football because, frankly, it hurts. It’s not like baseball or even basketball in some cases, where players can usually last into their late 30s or early 40s. Tom Brady seems to have found the fountain of youth and looks to play into his mid-forties. That hasn’t been the case in the history of the NFL, and it likely is the exception and not the rule going forward.

The main point here is that, literally, the next play could be a player’s last. Think of Alex Smith in 2018. A player who had largely avoided major injury for the entirety of his career was struck down in an instant. Nobody expected that, especially not the Washington Redskins after they gave him a boatload of guaranteed money. It’s possible he returns, but if he doesn’t, he is lucky he took a great deal when he had the chance.

Salary split

There’s a number of those who think something along the lines of, “Why does a player need $15 million? Isn’t that just greedy, considering they could take $10 million and play on a winning team?” At first, this seems like an entirely logical approach to the question of players taking pay cuts. A few million more doesn’t seem like it will change a player’s life, will it?

The truth is, a professional athlete has a bevy of unique bills to pay. The first one is their taxes, which are usually substantial. As high income earners, NFL players usually face steep taxes, sometimes breaking 50 percent of their overall salary. These include federal, state, local, and what’s known as a “jock tax.” A jock tax is a tax paid by visitors to a state or jurisdiction who make money in that locality. This comes into play with professional athletes who play in a number of different states during the season.

The next items to consider are the fees that professional athletes pay to those who work for them. This most prominently considers their agent, who takes a cut of every deal that they negotiate for the player, and those each player has put in charge of managing their finances.

Finally, there’s the player’s family. Many players that make it to the professional level have entered a new stratosphere of income generation, something their families have never had access to and likely never will again. We’ve seen time and again where athletes attempt to raise extended families and large groups of friends to greater levels of prosperity. This can sometimes lead to negative outcomes, but it remains that most in that situation would look to those closest to them and attempt to provide for their needs.

Agency reputation

A major element that most fans likely don’t consider is the agent’s impact on the process. The agent works for the player and if the player says he wants to take less money, the agent must follow suit. It’s likely this actually happens behind closed doors from time to time, but it’s unlikely these discounts happen very often. It’s even less likely they are steep.

A high-profile agent is not going to take a large number of clients who want to take major discounts because it’s bad for the agency’s brand. As an agent, your main sales pitch is that you have and will get the best deal for your clients. If new and old players alike see an agency consistently achieving below-market deals for their clients, it’s likely they’ll look to other agencies for their business. In contrast, if an agency lands the richest deal for a position in NFL history, it will generate business for a number of years.

CBA impact

The struggle for monetary dominance in the NFL is an intense negotiation between the National Football League Players Association and the league’s owners. Every single person encounters negotiations on a daily basis, from relational ones in their home to business-to-business ones in the boardroom. However, most people don’t negotiate billion dollar deals on a regular basis.

It’s in the NFLPA’s best interest for players to ask for the most money they can. What’s more, the players’ contracts at the top can either have a positive or negative effect on the contracts of the players at the bottom.

The truth is that the owners are likely only concerned, albeit only slightly, with what the most prominent players think and want. If the top players aren’t negotiating for more money, no one will offer it to them freely. Any extra money that would have trickled down to the players barely making the roster won’t exist.

Conclusion

There are other reasons I haven’t even mentioned, such as the cost of potential long-term health care outside of what is provided by the NFL. It’s clear based on many retired players’ health outcomes, that some are more predisposed to long-term health problems from football than others.

While Super Bowl champions like the Chiefs present a number of advantages for veterans, it becomes more difficult with time to expect players to take below-market deals simply to win games. That’s not to say they won’t, but once again it will probably be the exception rather than the rule.