NFL Teams Use Offset Language to Avoid Rookie “Double-Dipping”

One of the few things that a rookie to the NFL may negotiate is what is referred to as “offset language” in his contract.

offset languageHowever, chances are, teams won’t be inclined to remove such a clause from a first-year player’s contract.
Offset language isn’t a topic typically discussed beyond meeting rooms occupied by agents, players and team officials. Recently however, this sort of clause has become an issue for one team and its most recent NFL draft pick.
Marcus Mariota remains the last first-round draft pick yet to be signed, as his team, the Tennessee Titans, and he, continue to discuss the offset language the team insists remains in his contract. Offset language has become common in rookie contracts for players chosen within the top 10 draft picks. Only one player taken in the top of the most recent draft, Dante Fowler, has signed a contract without offset language, according to NBC’s Pro Football Talk.

What is offset language, and why is it included in rookie contracts?

Rookies picked high in the draft are pretty much guaranteed to discuss offset language with their teams and agents at some point before they sign their first contracts. Offset language helps ensure that top picks don’t end up double-dipping, or taking money from two teams if they are cut before their first contracts are up. SB Nation explained the concept using a contract – that includes offset language – with a fully guaranteed $5 million 2016 salary.
If the player is cut from his team, he will receive that guaranteed $5 million. However, if he signed with another team, then the salary he is set to receive from that new team will be deducted from what his old team was obligated to pay. If his new salary for the year is set to be $1 million, then his old team will owe him $4 million rather than $5 million. Without offset language he would receive $6 million – $5 million from his first team, and $1 million from his new one. Typically, offset language becomes important in the fourth year of a player’s first contract. Under the most recent collective bargaining agreement, rookie contracts last for four years, with a fifth year option. If offset language is included in that agreement, then the team can save money by turning down that fifth year option.

How offset language is approached in negotiations

Often, rookies will allow offset language to be included in their contracts, if only because teams will refuse to back down and strike such a clause from the deal. Two recently-drafted players without offset language – the aforementioned Fowler, as well as Blake Bortles, drafted in the 2014 draft – play for the same team, the Jacksonville Jaguars. Meanwhile, the Titans have asserted that the team’s intention to include offset language in Mariota’s contract isn’t an indictment of him as a player, but rather a policy in place for all rookies.
Rookies working on their first contracts would be wise to consult a sports attorney about offset language, and whether or not they will be able to negotiate such a clause out of their contracts.
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Anthony R. Caruso is a business transactional attorney in New York and New Jersey with experience in structuring, negotiation and completion of legal deals involving business, entrepreneurs, athletes and performers.

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