Why are multiple 1st round picks worth giving up a QB?

**ShadeRaven** · 02-02-2023, 03:05 PM

If Lamar is holding those around him back then how come Hollywood,OBJ and Hurst havent been better since they left to play with "better passers"

**jonboy79** · 02-02-2023, 03:14 PM

Originally Posted by InigoMontoya

I think you're misremembering the play. https://www.denverbroncos.com/video/...ncos-at-ravens

He doesn't run into the linebacker. He's is in the middle of taking off, but doesn't see the linebacker, and Cooper gets to him from behind. I agree that Lamar needs to get rid of the ball faster, but what you're saying didn't happen on that play.

Oh, I guess that IS last head now.
I meant vs Cleveland
And “technically” I wasn’t using “ran into” in the headfirst manner; but was tackled awkwardly due to running when better options were available.

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**jonboy79** · 02-02-2023, 03:15 PM

Originally Posted by Shas

From my Googling I see that a typical loss-of-value of insurance policy (which is what we're talking about) would have a premium cost of about $80,000 a per million dollars of coverage (8%).

I don't recall the roster spot thing. I thought Belle just retired flat out, so I wouldn't expect so.

But, back to how the idea would apply to the Ravens and Jackson, it isn't addressing Bisciotti's concern, it's addressing Lamar's (the concern being he doesn't see all the money that the contract adds up to).

So in my scenario, if the total value is $250M but of that total, $20M in each of years 3, 4, and 5 is not guaranteed (meaning he has to be able to perform to the team's expectations to earn some combination of salary or roster bonus during the last three years), the the Ravens would be only be fully guaranteeing $190M of the $250M. And Lamar's concern would be about the potential loss of $60M off the bottom of the deal due to his loss-of-value after year two.

And so, to protect himself, he could insure the $60M potential loss of value through a policy with a premium cost of $4.8M.

Under that same scenario, then, the Ravens could offer to simply increase the signing bonus by $5M in order for Lamar to payout the cost to insure himself for his potential loss of value from not being on the roster in years 3-5.

Lamar gets what he wants, a full guarantee that he'll see the $250M value of the contract he's looking for (again, my numbers are hypothetical as an example) at no additional cost to him, and the Ravens get what they want, only the $190M portion fully guaranteed, and they avoid setting a precedent of fully guaranteeing contracts.

The only losers in that scenario are the NFLPA, because they would not be able to use Lamar to set a new precedent of teams fully guaranteeing contracts...and Llyod's of London, if Lamar gets hurt. The insurer wins of course, if they can pocket the $5M and never have to pay out on any loss.

Wowzers that’s far cheaper than I would have expected.

Why guarantee anything beyond the first year and simply buy insurance policies instead…

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**jonboy79** · 02-02-2023, 03:16 PM

Originally Posted by ShadeRaven

If Lamar is holding those around him back then how come Hollywood,OBJ and Hurst havent been better since they left to play with "better passers"

When has anyone said he is holding players back?

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**kronusthebonus** · 02-02-2023, 03:57 PM

Originally Posted by jonboy79

Wowzers that’s far cheaper than I would have expected.

Why guarantee anything beyond the first year and simply buy insurance policies instead…

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Isn't still costing Lamar $5m/year to insure himself? If the total value is still 250m, 5m/year has to come from somewhere, so Lamar is still not getting the full value if he has to pay out of pocket for a policy. Now, if we increased to 265, maybe he'd go for it, but that is additional cap as well.

**Dirt1** · 02-02-2023, 04:08 PM

Originally Posted by kronusthebonus

Isn't still costing Lamar $5m/year to insure himself? If the total value is still 250m, 5m/year has to come from somewhere, so Lamar is still not getting the full value if he has to pay out of pocket for a policy. Now, if we increased to 265, maybe he'd go for it, but that is additional cap as well.

I think the point they are trying to make is to offer Lamar a contract where the last year isn't guaranteed, but cover the $5 million cost of the insurance policy by bumping up the guaranteed amount by $5 million. I think that is actually a very creative solution, but would require the Ravens to move their fully guaranteed amount up to around $200 million. So, 5-year $250 million contract with $205 fully guaranteed ($5 million of the fully guaranteed amount being the cost of the insurance policy).

**InigoMontoya** · 02-02-2023, 04:11 PM

Originally Posted by jonboy79

Oh, I guess that IS last head now.
I meant vs Cleveland
And “technically” I wasn’t using “ran into” in the headfirst manner; but was tackled awkwardly due to running when better options were available.

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Like I said, I agree in general. He needs to get rid of the ball faster. But the Cleveland play wasn't his fault. There was a free blitzer and he got rid of the ball quickly. It should have been a penalty because there was absolutely no reason for the Cleveland defender to go to the ground on the play. Lamar got hurt on that play because a defender was allowed to target his legs in the pocket.

Go to about 43 seconds in.

**Mark** · 02-02-2023, 04:21 PM

Originally Posted by Shas

From my Googling I see that a typical loss-of-value of insurance policy (which is what we're talking about) would have a premium cost of about $80,000 a per million dollars of coverage (8%).

I don't recall the roster spot thing. I thought Belle just retired flat out, so I wouldn't expect so.

But, back to how the idea would apply to the Ravens and Jackson, it isn't addressing Bisciotti's concern, it's addressing Lamar's (the concern being he doesn't see all the money that the contract adds up to).

So in my scenario, if the total value is $250M but of that total, $20M in each of years 3, 4, and 5 is not guaranteed (meaning he has to be able to perform to the team's expectations to earn some combination of salary or roster bonus during the last three years), the the Ravens would be only be fully guaranteeing $190M of the $250M. And Lamar's concern would be about the potential loss of $60M off the bottom of the deal due to his loss-of-value after year two.

And so, to protect himself, he could insure the $60M potential loss of value through a policy with a premium cost of $4.8M.

Under that same scenario, then, the Ravens could offer to simply increase the signing bonus by $5M in order for Lamar to payout the cost to insure himself for his potential loss of value from not being on the roster in years 3-5.

Lamar gets what he wants, a full guarantee that he'll see the $250M value of the contract he's looking for (again, my numbers are hypothetical as an example) at no additional cost to him, and the Ravens get what they want, only the $190M portion fully guaranteed, and they avoid setting a precedent of fully guaranteeing contracts.

The only losers in that scenario are the NFLPA, because they would not be able to use Lamar to set a new precedent of teams fully guaranteeing contracts...and Llyod's of London, if Lamar gets hurt. The insurer wins of course, if they can pocket the $5M and never have to pay out on any loss.

I've also wondered for several months why this won't work as a rational and viable way to guarantee money. You may have particular insight into the cost of the premium for this coverage but my gut tells me the cost to insure an athlete in a high injury risk,collision sport where the insured is sustains hundreds/thousands of violent impacts a year might be prohibitive. This is especially the case when concussions are more commonly diagnosed and something as simple as multiple concussions may keep someone off the field permanently. It also seems like a player wants his money guaranteed without having to sue an insurance carrier for a disputed claim. My guess is that is why the CBA requires the owner to escrow the guaranteed money when the contract is signed. If the premiums are not prohibitive, the league and the union have probably discussed this option at some time over the years. As you said, it also doesn't protect the player if he is healthy enough to play but can't perform and the union won't approve that.

**Shas** · 02-02-2023, 06:20 PM

I am no expert and simply Googled it and found what sounded like a straight forward number. Filmstudy was an actuary, so he probably has a bead on this.

It's interesting that it seems to be more and more common, and particularly with college athletes who realize they are headed for a big payday that could get majorly disrupted by injury. I'm seeing references where they are looking at a draft projection, and calculating the value of the rookie deal at a certain cut off, and then they are taking out a policy that repays them whatever money they lose by falling below that threshold. A guy insured to go in the first round insures himself against the loss if he ends up getting drafted 70th.

I'm also seeing references to lawsuits where insurers refuse to pay out, claiming injuries were pre-existing.

I assume agents are paying the premium to lock up sophomores early. And the earnings difference been 32 and 70 isn't as dramatic as a QB getting cut with two years left on a five year extension because his arm fell off.

I know there are injury settlements and maybe teams take out insurance to cover those costs, for all I know.

**jonboy79** · 02-02-2023, 07:48 PM

Originally Posted by InigoMontoya

Like I said, I agree in general. He needs to get rid of the ball faster. But the Cleveland play wasn't his fault. There was a free blitzer and he got rid of the ball quickly. It should have been a penalty because there was absolutely no reason for the Cleveland defender to go to the ground on the play. Lamar got hurt on that play because a defender was allowed to target his legs in the pocket.

Go to about 43 seconds in.

My memory wasn’t perfect on this, but still it highlights that Lamar always tries to go out the back of the pocket to avoid a sack instead of getting rid of it faster OR stepping up, both of which would have been better and less dangerous in this instance.

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**Culex** · 02-03-2023, 02:20 AM

Originally Posted by ShadeRaven

If Lamar is holding those around him back then how come Hollywood,OBJ and Hurst havent been better since they left to play with "better passers"

Brown got hurt

OBJ is one of the best left tackles in football

Hurst has always sucked.

**Kyle Cactus** · 02-03-2023, 08:57 AM

Shas, that's a really fascinating idea.

One reason the players union might object to this practice is that the insurance companies would get a piece of the total player revenue pie pie. In recent CBAs there's been a cap floor that basically guarantees that the players (and their agents) get the entirety of the 50ish% of NFL revenue that is allocated to the cap.

If it becomes common to have these insurance policies, then it must come out of that 50ish%. The most valuable players are guaranteed to get their slice no matter what, but the players collectively get a bit less.

Admittedly I'm misrepresenting this a little. As I understand your example, the player is free to buy or not buy the insurance with their bonus money, just like they're free to buy a car, house, etc... But in this case it's a wink-wink part of the negotiation of the contract. "We'll give you X more bonus money (out of the cap designated for players). You'll buy insurance with that money and have a fully guaranteed revenue stream."