Thread: Poison Pill in Hutch's contract
03-13-2006, 09:18 PM #1Coordinator
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Poison Pill in Hutch's contract
POSTED 10:03 a.m. EST; UPDATED 10:44 a.m. EST, March 13, 2006
HUTCHINSON OFFER HAS MAJOR POISON PILL
A league source tells us that the offer sheet signed by Seahawks guard Steve Hutchinson with the Minnesota Vikings contains a poison pill of unprecedented magnitude and significance, which is aimed at preventing Seattle from exercising its right to match the deal, pursuant to the rules applicable to transition players.
Apart from a 2006 cap number that exceeds $13 million, the offer sheet contains a provision that makes the entire deal guaranteed if Hutchinson at any point becomes anything other than the highest paid player on the team.
From Seattle's perspective, that's a big problem, in light of the Walter Jones contract. If the Seahawks match, Hutchinson's deal could indeed become fully guaranteed from day one.
The Seahawks could attempt to match the offer and exclude the poison pill provision, taking the position that it is not a "Principal Term" of the deal. Under Article XX, Section 5 of the CBA, only the "Principal Terms" must be matched.
So what are "Principle Terms"? Under Article XIX, Section 3(e)(ii) of the CBA, "Principle Terms" include "[a]ny modifications of and additions to the terms contained in the NFL Player Contract . . . that relate to non-compensation terms (including guarantees, no-cut, and no-trade provisions)." Applying the language literally, the poison pill "relates to" a guarantee because it sets forth a specific circumstance in which the specified compensation will become guaranteed.
There's a chance that the Seahawks will attempt to fashion an argument that the trigger for the guarantee violates the spirit of the CBA by placing an artificial limit on the money that can be paid to other players. But, in reality, it doesn't -- it merely provides the player who ultimately is not the highest paid player a guaranteed contract.
Though the issue ultimately might land before an arbitrator, we think that the Vikings will prevail on this one.
We're also told that the Seahawks are livid at Hutchinson and agent Tom Condon with this development. It's one thing, as they see it, for a guy to get the best offer he can on the open market. It's another thing to huddle with the new team in an effort to come up with an offer that the Seahawks can't or won't be able to match.
MORE ISSUES ON HUTCHINSON DEAL
We've gotten plenty of questions in the past 20 hours or so since we broke on Sunday the fact that the Vikings had signed Seahawks guard Steve Hutchinson to an offer sheet.
(For those of you in the industry who give a crap about this kind of stuff, we had the basic story out first but with no contractual details, Jay Glazer of FOXSports.com was only minutes behind but with plenty of information regarding the money involved, and we then followed up with news regarding the 2006 cap number. At some point thereafter, another national reporter who shall remain nameless -- but who knows who he is -- tried to create the impression that the story was his. To that we say, "For shame.")
Anyway, one of the questions we've been getting is whether Hutchinson can sign another offer sheet with another team if the Seahawks match the offer sheet that he signed on Sunday with Minnesota. The answer is no. Unless both the Vikings and Hutchinson agree to a revocation of the offer sheet (see Article XIX, Section 3(d) of the CBA), Hutchinson will have a long-term deal with either the Vikings or the Seahawks after the next week plays out.
Also, others have asked whether the Seahawks must account for the full 2006 cap number in excess of $13 million under their current cap room, which at the launch of free agency was reported to be in the range of $17 million. Again, no. The 'Hawks already were carrying $6.39 million in 2006 cap space due to the transition tag that was applied to Hutchinson, so the "new" cap hit this year for the Seahawks will be the different between the 2006 cap number under the offer sheet and the amount of the one-year transition tender.
Next, it's been suggested by Danny O'Neil of The Seattle Post-Intelligencer that the Seahawks could "receiv[e] something from the Vikings for agreeing not to match the offer." Though we burned up a few IQ points scouring the CBA for an answer, it appears that Article XX, Section 5 incorporates by reference Article XIX, Section 3(h), which says that "[t]here may be no consideration of any kind given by one Club to another Club in exchange for a Club's decision to exercise or not to exercise its Right of First Refusal." In English, this means that the Seahawks can't say to the Vikings, for example, "Send us a third-round pick and we'll forget the whole thing."
That dynamic makes even more curious the decision of the Seahawks not to apply the franchise tag to Hutchinson, which wouldn't have resulted in a significantly higher tender but which also would have given the Seahawks the ability to trade him -- or to pick up two first-round picks if they had decided not to match an offer sheet. Sure, the franchise tender could have been signed by Hutchinson (and thus fully guaranteed), but in the end that same rule applied to the transition tender as well, given the terms of the new CBA.
In fact, we have feeling that, if the league had secured as part of the CBA discussions a 24-hour window last week for teams to decide whether to use the franchise tag, the Seahawks would have converted Hutchinson's designation from transition to franchise.
But, hey, they should have done it in the first place.
03-13-2006, 09:21 PM #2
Re: Poison Pill in Hutch's contract
03-13-2006, 09:22 PM #3Coordinator
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Re: Poison Pill in Hutch's contract
Sorry everyone, didn't see it
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