Caleb Williams Will Sign a Contract Just Like Everyone Else

As the NFL nears the halfway point of its season, there are, as always, plenty of business-related topics in the news. Here’s my take on three of them.

Caleb Williams nonsense

There have been some recent reports or, in some cases, rehashes of old reports, that USC quarterback Caleb Williams, the defending Heisman Trophy winner and presumed top pick in the 2024 NFL draft will be making some business of football decisions regarding the NFL draft next year.

Two reports that have caught my attention are (1) he may stay at USC next year and earn name, image and likeness money instead of NFL money, and (2) he may ask the team that drafts him for a percentage of ownership in the franchise. Well, good luck with that.

Whether this is truly coming from Williams, or his father, or others, or no one at all, none of this is going to happen.

Regarding the first rumor about NIL money, consider the following: This year’s top draft pick, Bryce Young, signed a four-year contract worth approximately $38 million, with $24 million of it in signing bonus. We can estimate that the top pick in 2024 will earn roughly $40 million on a four-year contract, with roughly $25 million of it in signing bonus. That is before any endorsement money (the professional equivalent of NIL).

USC donors and sponsors may be wealthy, but they are not paying Williams more than $25 million to play for them next year. And even if they could and would, as a former agent I could never advise Williams to bypass the NFL as a top pick. First, he would be putting a $40 million contract on hold for another year when he could suffer injuries or a downturn in performance. More important, he would be delaying his second NFL contract as well, one that he can’t even negotiate until he has played three years in the NFL. And the second contract is where the “real money” for players resides.

Granted, the NIL vs. NFL is a legitimate conversation for low-round draft picks, where bonus amounts are in the $100K to $200K range. But it is not a serious discussion for the top of the draft.

As for equity in a franchise, well, no. The NFL draft system is a slotted system. Williams will know his compensation the moment he is drafted; the collective bargaining agreement has prefabricated all rookie contracts, and the numbers above will represent his contract if he is at the top of the draft.

Just for conversation’s sake, though, let’s say the NFL magically allowed the team that drafts him to give Williams equity in the franchise, and the team surprisingly and stupidly caves in to Williams. The equity, of course, would have to be valued for cap purposes. He could not take his entire salary in equity; he would have to be paid at least minimum salary. Thus, if we project roughly $1 million a year in actual salary, there would be $36 million of the $40 million contract that he could take (if somehow it were allowed) as equity. Thus he would have $9 million a year in equity of a franchise worth, say, $7 billion. In doing the math, that would be a 0.012% stake in the team for four years, or less if the valuation rises each year. And after four years, depending on whether Williams re-signs or has a team option, etc., that equity could be returned. Again, this is purely an academic exercise; it is not going to happen.

After all the noise and rumors over the next six months, Williams will sign a four-year contract with a fifth-year option next summer, and the nonsense will cease.

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Goodell extension

I remember being in the NFL when Roger Goodell assumed the commissioner role in 2006; it was a stark and noticeable change from the previous commissioner, Paul Tagliabue. Tagliabue was a lawyer, very concerned about fairness to players and the legal system determining proper punishment for conduct. Goodell was the new sheriff; he would not wait for legal proceedings to mete out punishment for personal conduct.

Goodell’s bosses, the 32 teams, have now extended his contract through March 2027. And Goodell is not necessarily retiring after that; there could still be another extension to come. Goodell is the only commissioner of the major four sports who is not a lawyer, coming from a business background. And boy, has business been good under his reign.

His is a more lucrative contract extension than any player deal, and it makes sense. Goodell is being paid by 32 owners; players seeking extensions can negotiate with only one owner. My guess is he is making roughly $64 million, or $2 million per team. Goodell’s career earnings through this deal will be approximately $700 million, more than twice the career earnings of any NFL player in history.

And it was a no-brainer for these owners, as the key metrics are all pointing straight north. Record media deals with both legacy networks (CBS, NBC, Fox, ESPN) and digital giants (Amazon, Google) total $110 billion and are just kicking in. The latest franchise sale, of the Commanders, was a staggering $6.05 billion. There are still seven years left on the most team-friendly CBA in major sports. Every week produces more record ratings for networks (and Amazon) showing NFL football; overseas games sell out in a matter of minutes. Business is booming.There does not seem to be any serious threat to the NFL’s unparalleled popularity and prosperity. Not concussions, not Colin Kaepernick or Ray Rice or Deshaun Watson or Daniel Snyder or whatever other bad behavior has brought negative attention to it. Nothing seems to knock the league off its perch; it may just be too big to fail.

Goodell, whether in the right place at the right time or using keen business savvy or some of both, has presided over this unprecedented prosperity. It was a no-brainer for the owners to reward him handsomely.

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Flag football

It has barely been a week since the International Olympic Committee approved flag football as one of five Olympic sports (along with squash, lacrosse, baseball-softball and cricket) for the Los Angeles Olympics in 2028. But the NFL is already leaning in. Every game this weekend had ads about the inclusion, with video of flag football players young and old, male and female, playing the game.

The NFL is clearly thrilled with the decision; it will grow the game with boys and girls domestically, and expand football’s footprint globally on the world’s biggest sporting stage.

As for the teams, well, perhaps not so much.

As I know from my experience as a club executive, NFL teams are sensitive about players’ doing pretty much any offseason activities that aren’t pro-football-related. I know, this is technically “football” and would theoretically be some good preparation for real football, but we know the risks. There are still visions of former Patriot Robert Edwards tearing up his knee in a similar event at the Pro Bowl years ago, albeit on the beach. It is way too early to think about now, but mark my words: In five years, there is going to be some difference of opinion between the NFL and some NFL front offices about allowing or encouraging certain players to play.

Speaking of which, there is already speculation as to which NFL and former NFL players will participate, with names thrown around such as current superstar Tyreek Hill and former superstar Rob Gronkowski. It is just the start of buzz for the event over the coming years. And this is five years away!

To keep both the NFL’s hype machine and its team general managers happy, my sense is that the 2028 United States Olympic flag football team will consist of primarily, if not exclusively, recently retired NFL players. In other words, current NFL stars who will be former NFL stars by then.

Get used to the NFL’s massive marketing machine hyping flag football for the next five years.