Agent’s Take: Is Deshaun Watson’s fully guaranteed Browns contract a game-changer in

Deshaun Watson’s trade to the Browns has the potential to be the NFL‘s most significant transaction during the salary cap era, which began in 1994. The draft capital in the trade won’t be the reason. The Texans dealt Watson and a 2024 sixth-round pick for 2022, 2023 and 2024 first-round picks, a 2022 fourth-round pick, a 2023 third-round pick and a 2024 fourth-round pick.

Nobody expected Watson to get a fully guaranteed five-year, $230 million contract in the process especially considering the sexual assault and misconduct allegations he’s still facing. The quarterback had four years worth $136 million remaining on the four year contract extension averaging $39 million per year he signed in September 2020.

The Browns “pulled a rabbit out of the hat” with the help of the new contract. Watson had narrowed the teams he was willing to waive his no trade clause for down to the Falcons and Saints. The Browns had barely missed the cut prior to the new contract entering the equation.

The record for guarantees in an NFL contract is shattered with Watson’s deal. He more than doubles the amount fully guaranteed at signing in Packers quarterback Aaron Rodgers‘ new contract, which is widely considered to be $150.815 million over three years, although there are two additional below market years in the deal.

Rodgers had set new standards for guaranteed money with football contracts in becoming the NFL’s first $50 million per year player. He has $150.665 million in total guarantees and $101.515 million fully guaranteed.

Watson has the type of guaranteed money typically reserved for the most lucrative NBA contracts. For example, Bucks forward Giannis Antetokounmpo, the 2019 and 2020 NBA MVP, signed a five-year extension in December 2020 that took effect this season worth a fully guaranteed $228,200,420.

The four-year extension Warriors All-NBA guard Steph Curry signed last August that begins next season is for a fully guaranteed $215,353,662. The five years, including the 2021-22 season, Curry is currently under contract total a fully guaranteed $261,134,628. Unlike the NFL, fully guaranteed contracts are the norm in MLB and the NBA.

The history of NFL game-changers

History can’t repeat itself in order for Watson’s contract to forever change the NFL’s economic landscape. The three-year, $84 million deal quarterback Kirk Cousins received from the Vikings in 2018 free agency was the NFL’s first lucrative fully guaranteed veteran contract.

Cousins set the stage for other high profile players to push for fully guaranteed contracts. Any momentum there could have been for additional fully guaranteed contracts stopped after Matt Ryan and Rodgers signed extensions in the following months in 2018. The Falcons made Ryan the NFL’s first $30 million per year player on a five year extension with $94.5 million fully guaranteed at signing. Rodgers surpassed Ryan as the league’s highest paid player at $33.5 million with his four year extension that preseason. He had $78.7 million fully guaranteed in the deal, which was less than the amount in Cousins’ contract.

Ryan held the mark for the most money fully guaranteed in an NFL contract for nearly three years. That was until Dak Prescott signed his four-year, $160 million deal with $95 million fully guaranteed at signing last March to remain the Cowboys‘ quarterback.

Why NFL’s funding rules could be big obstacle

One potential obstacle to Watson opening the flood gates to fully guaranteed contracts is the NFL’s funding rules. The new NFL collective bargaining agreement ratified in 2020 modified the NFL’s archaic funding requirements which necessitated teams putting into an escrow account the amount of any guarantees in a contract other than those just for injury, including ones in future contract years. The new rules are as follows:

The NFL may require that by a prescribed date certain, each Club must deposit into a segregated account the present value, calculated using the Discount Rate, less $15,000,000 (the “Deductible”), of deferred and guaranteed compensation owed by that Club with respect to Club funding of Player Contracts involving deferred or guaranteed compensation; provided, however, that with respect to guaranteed contracts, the amount of unpaid compensation for past or future services to be included in the funding calculation shall not exceed seventy-five (75%) percent of the total amount of the contract compensation. The present value of any future years’ salary payable to a player pursuant to an injury guarantee provision in his NFL Player Contract(s), shall not be considered owed by a Club under this Section until after the Club has acknowledged that the player’s injury qualifies him to receive the future payments. The $15,000,000 Deductible referenced in the first sentence of this Section 9 shall apply to the 2020-28 League Years only. This Deductible shall increase to…