Insurance and cap relief

[Warfish]

1 minute ago, Sperm Edwards said:

I generally agree with this re: the meddling stuff. I'm sure from time to time he puts his thumb on the scale, as I suspect almost all owners do as well -- it's their multi-billion dollar property. But it's overblown and repeated GMs have said he lets them do what they want (and is why they get fired for poor performance; otherwise he'd know it's always his own fault). 

In this one area for insurance it seems nothing gets done without Woody OK'ing it (at least if the article is accurate). 

In truth, a GM would have almost no incentive to decline to insure a big-money player. For the GM it's all upside, no downside. 

For me I keep coming back to a core question:  Woody is willing to take on $150 million in payroll guarantees (At the time of the trade under Rodgers old contract), but he's unwilling to follow the advice of his GM, training staff and front office cap experts that the Jets needed to use insurance to back Rodgers in case of injury.

And if JD WAS in fact thinking "man, Rodgers in such an injury risk, we have to have insurance", then why on earth was his primary backup QB Zach "Benched Bust, Definitely Not Playing in 2024, Needs Time to Sit" Wilson?

Again, Woody isn't a good owner.  If he vetoed JD in both insurance AND in finding a non-Wilson backup, wow, thats would be a spectacular failing.

[Sperm Edwards]

5 minutes ago, Warfish said:

Any snark in my original reply was not aimed at you personally, but the community in general. 

 

This.

@Gaffneycatch81 he does it to me, too.

In fairness, I'm quite often no better.  

Don't read into it -- some of us are just occasionally lacking in social graces. Plus it's a message board, people are rarely this impolite face to face, and this godforsaken team does this to its fans after enough years.

He's grumpy. BFD. 

[Sperm Edwards]

1 minute ago, Warfish said:

For me I keep coming back to a core question:  Woody is willing to take on $150 million in payroll guarantees (At the time of the trade under Rodgers old contract), but he's unwilling to follow the advice of his GM, training staff and front office cap experts that the Jets needed to use insurance to back Rodgers in case of injury.

And if JD WAS in fact thinking "man, Rodgers in such an injury risk, we have to have insurance", then why on earth was his primary backup QB Zach "Benched Bust, Definitely Not Playing in 2024, Needs Time to Sit" Wilson?

Again, Woody isn't a good owner.  If he vetoed JD in both insurance AND in finding a non-Wilson backup, wow, thats would be a spectacular failing.

Idzik did say in that interview the subject did come up - and that Philadelphia (where JD was before he was hired here) does this quite often - so it's not like they're oblivious to the option.

None of us were in the room for these decisions, but in this case it at least appears the scale tips one way.

[Gaffneycatch81]

21 minutes ago, Warfish said:

Any snark in my original reply was not aimed at you personally, but the community in general. 

And more directly in response to the 2nd post in the thread, "I, for one, am shocked that Woody is a shortsighted oaf." than your post, which is why I didn't quote your OP.

If we're taking issue with things, I take issue with your direct reply to me that I "didn't read the article" when it's clear the article didn;t name a responsible individual, and people were, in fact, assuming/presuming it was Woody.

So...yeah.  /shrug.  We can keep taking issue with each other on rhetorical stylistic grounds, or (as it seems we do) mostly agree on the topic.

Just seems like you frequently find something to get high and mighty about, and in this case, I think it’s very likely that at least a significant share of that decision is squarely on Woody. And the article kind of made that clear. So yeah, your reply kind of annoyed me. But fair enough — your point that JD could also have been negligent here is valid. I’m can let it go and leave it there.

[Scott Dierking]

8 minutes ago, Sperm Edwards said:

This.

@Gaffneycatch81 he does it to me, too.

In fairness, I'm quite often no better.  

Don't read into it -- some of us are just occasionally lacking in social graces. Plus it's a message board, people are rarely this impolite face to face, and this godforsaken team does this to its fans after enough years.

He's grumpy. BFD. 

I too am tired of all the broad generalizations by people on this board that attempt to portray  some  "collective soul" , especially when that collective souls portrayal points right back at me.

That has to be racist or bigotry in some manner, doesn't it?

 

[Sperm Edwards]

26 minutes ago, Scott Dierking said:

I too am tired of all the broad generalizations by people on this board that attempt to portray  some  "collective soul" , especially when that collective souls portrayal points right back at me.

That has to be racist or bigotry in some manner, doesn't it?

 

Only when it applies to scumbags like you.  

[Gaffneycatch81]

12 minutes ago, Sperm Edwards said:

This.

@Gaffneycatch81 he does it to me, too.

In fairness, I'm quite often no better.  

Don't read into it -- some of us are just occasionally lacking in social graces. Plus it's a message board, people are rarely this impolite face to face, and this godforsaken team does this to its fans after enough years.

He's grumpy. BFD. 

Haha … yeah, I’m an on and off poster, but I’ve been reading Warfish (and many of you guys) for years. I get being grumpy with our lot in life … I swear to god, sometimes I feel like this team has traumatized me.

[Larz]

1 hour ago, Sperm Edwards said:

First off, Woody isn't a blind-investor owner. He's the team's CEO. There aren't too many company CEOs oblivious to any $40MM/year investment in any one individual and just shrug it off like it's not important. It doesn't need to be based in cheapness when - on the part of both owner and GM alike - it can be explained away by incompetence and general lack of foresight.

From the article:

According to an insurance industry source, the Jets never returned calls from multiple insurance brokers, including the one who wrote and sold the Packers their policy on Rodgers. The Jets could have negotiated the existing Rodgers policy to insure a reduced portion of the signing bonus, but instead they let the policy go.

Joe Douglas was hired in 2019 as the Jets' general manager from his role as vice president of player personnel for the Eagles, a team that deals in insurance policies more than any other club. But the insurance decision may not have been his to make.

Former Jets general manager John Idzik, speaking generally about the five clubs he worked for in his NFL career, told ESPN that ownership approval and buy-in is necessary to purchase an insurance premium.

"At the ownership level, there's a certain way of conducting business," Idzik said. "Some clubs will be more apt to insure and they get used to that, and they see the benefits of it. Others are less apt."

A club's philosophy on insurance can be influenced by its salary cap staff's analysis, but it's ultimately determined by the owner, who has to be willing to spend their own money on the premium.

The author here isn't some see-no-evil Jets fan hell-bent on excusing every move made by Joe Douglas.  Because as she writes a little further down that the Jets' inactivity in purchasing such policies predates the current GM:

Sportico reported the Jets haven't done a policy in at least 10 years. Idzik declined to say whether they'd purchased insurance in his two seasons (2013-14) as Jets GM. "It was under discussion anytime we had a big contract," he said.

There's little reason for any GM to refuse to take out an insurance policy since it's not his money and it can only serve to benefit GM-type finances (i.e. the team's salary cap).

At least the way this is presented, this is more likely a Woody Johnson thing than a Douglas (or Maccagnan) thing, and probably Idzik and Tannenbaum before him. The Jets didn't get cap relief when Enunwa again got injured & never played again. Ditto when they lost Santonio Holmes for his Lisfranc injury years before.

And not just Rodgers, of late (though he's the biggest single hit as the QB). To him you can add all the other expensive-player half or most or full season injuries from players and there's no evidence the Jets recovered any amount of their salary cap allocation for all the games missed by:

• Enunwa (mentioned above)
• Santonio Holmes (mentioned above)
• Duane Brown (twice!)
• Corey Davis missing like half his time here
• Carl Lawson (twice!)
• CJ Mosley's first season here
• AVT (twice!)
• Fant in 2022
• Becton (twice!)
• Maye playing on the tag in 2021
• Revis in 2012
• Sanchez in 2013
• (probably others I'm forgetting, too)

In fairness they would not have collected on the bulk of contracts - including really bad ones - that didn't result in injury-missed games. For those, the insurance policy would've been a pure loss every time.

Hey, maybe it is all on each GM trying to stay in good graces with the boss by saving him an extra personal tax on the salary cap, but this stuff goes back to Tannenbaum's tenure here so that's a harder sell.

Here's the thing: if Woody gets reimbursed, then there's a cap credit. IOW Woody doesn't keep the insurance money; rather, it gets re-spent on players the next season. That's again something that appeals only to a GM not to an owner.

[Sperm Edwards]

2 minutes ago, Gaffneycatch81 said:

Haha … yeah, I’m an on and off poster, but I’ve been reading Warfish (and many of you guys) for years. I get being grumpy with our lot in life … I swear to god, sometimes I feel like this team has traumatized me.

He's not always grumpy. 

Once upon a time I went on a Sanchez rant-bender for 3 straight years. I'm not proud of it, but it happened.

OK that's not really true. I'm proud of it. 

[Gaffneycatch81]

21 minutes ago, Warfish said:

For me I keep coming back to a core question:  Woody is willing to take on $150 million in payroll guarantees (At the time of the trade under Rodgers old contract), but he's unwilling to follow the advice of his GM, training staff and front office cap experts that the Jets needed to use insurance to back Rodgers in case of injury.

And if JD WAS in fact thinking "man, Rodgers in such an injury risk, we have to have insurance", then why on earth was his primary backup QB Zach "Benched Bust, Definitely Not Playing in 2024, Needs Time to Sit" Wilson?

Again, Woody isn't a good owner.  If he vetoed JD in both insurance AND in finding a non-Wilson backup, wow, thats would be a spectacular failing.

See my previous post in response to @Sperm Edwards about Woody’s schitzophrenic leadership style. That is one of my biggest issues with him — he doesn’t seem to have a clear vision of how he wants to run this team, and I think his inconsistency filters down to the whole organization.

Edit: My post was in response to Batman

[Warfish]

I'm not comfortable with the meta-commentary regarding me and my current 'social grace grump level' in this thread.

 

[Gaffneycatch81]

3 hours ago, FidelioJet said:

If this article and my understanding of it is accurate - this isn't just a small loop hole but a massive way to artificially increase your cap (as there are always injuries)

If the Jets aren't taking advantage of this (and I don't care if it's the owner or the GM) it clear, to me anyway, they are more about money than winning and they are doing a disservice to their fans.

Yep. And that, I believe, is why people in the league are reluctant to talk about it, and why we haven’t heard about it before.

[batman10023]

3 hours ago, Warfish said:

Oh ok, so the article didn't name anyone as the decision maker, you're assuming it was Woody.  

the article said it's an ownership level decision.

[batman10023]

5 hours ago, Warfish said:

I love the presumption that it was the Owner being cheap, not the GM failing to plan for an injury to the old QB. 

Owners don't personally handle insurance for players, or management of the cap, that's the GM's job.

Lets be honest, anything good "yay GM!", anything bad "Boo, Owner sucks!" tends to be the mantra here at JN.

Same as last year the "owner forced Rodgers on GM" talk, but if Rodgers is great this year it'll be "GM is so brilliant for getting Rodgers despite the Owners objections", lol.

Since the cost is 100% borne out of pocket by the owner - the end of the day the owner has to approve the $$.  
Every GM would want this if possible, why not?

[Larz]

5 hours ago, Warfish said:

I love the presumption that it was the Owner being cheap, not the GM failing to plan for an injury to the old QB. 

Owners don't personally handle insurance for players, or management of the cap, that's the GM's job.

Lets be honest, anything good "yay GM!", anything bad "Boo, Owner sucks!" tends to be the mantra here at JN.

Same as last year the "owner forced Rodgers on GM" talk, but if Rodgers is great this year it'll be "GM is so brilliant for getting Rodgers despite the Owners objections", lol.

Did you watch the video?

[batman10023]

2 hours ago, Gaffneycatch81 said:

I agree with the bolded — which is why, until the last sentence of my original post, I said “the Jets and Woody” when referring to failure to take out insurance.

I don’t agree that there is any reason to question that every owner in the NFL is aware of this option. Several font office sources or former GMs, including Idzik, say it was routinely discussed. And it was part of the Rodgers contract they inherited. And the article states the Jets got phone calls from insurance brokers trying to sell them a policy on Rodgers. So, the idea that a high level decision maker — particularly a guy who has owned the team for over 20 years — is not fully aware of the option and it’s implications is very far-fetched to me. The secrecy around it in the league is, in my opinion, more likely an effort to keep it quiet due to fan reaction if they don’t have a contract insured — conceivably, an owner who doesn’t mind spending his own money to win could insure every player on the roster, and recoup cap dollars every year if he wanted to in the interest of winning, and I’d imagine the owners would prefer that the fans don’t know that. But, I admit that is speculation.

But again, I agree that is the job of Joe Douglas (and probably others in the front office) to convince Woody to spend the money on insurance if at all possible (it may just not be on the table with Woody — we don’t know that). I mean, again, given the rule as it stands, there is no reason why ANY GM would not love to have his owner take out insurance on ANY contract (I mean, it’s someone else’s money to buy cap space — talk about making your job easier) … but I agree that it’s possible that JD didn’t push hard enough for it in this case (we don’t know if it’s even an option with Woody and we don’t know how hard JD pushed, but it’s possible he shares some of the blame). So I don’t take issue with questioning whether JD is at fault too (and, again, I did reference “the Jets and Woody” through my post). I do take issue with the condescending snark in your reply.

who actually thinks that any owner is not aware of this insurance angle?  

 

[batman10023]

1 hour ago, Gaffneycatch81 said:

You can bet the owners hate this rule, because it’s basically a way to filter extra money to the players. The owners use their money to pay insurance premiums that don’t count against the cap, and when those policies get paid out it goes into the cap and paid to players. It was collectively bargained and the owners probably gave in to the players association on it for other concessions. And they probably informally agreed amongst themselves not to use it much, if at all. 

Under this rule, an owner who doesn’t care about costs could, conceivably, insure his whole team. Based on the numbers in the article, that might cost (very roughly here just for the sake of the example) $100M. The payouts will vary year to year and over time won’t average out to 100% of what is paid (insurance is a business, after all) — but let’s say on average they get 60% of that back over time. That’s a HUGE competitive advantage. Obviously, no owner is willing to do that (again, I’d be willing to bet they have agreed not to do that) … but it’s a major loophole in the cap. And I’d guess it’s not something they want the fans — who they want to think the teams are all about winning — to understand.

the cost won't be remotely close to $60MM.  

My guess that the IR average is $30MM and 2/3 of that is $20MM.   Assume 25% profit we are at $25MM spend on the owner.

[Gaffneycatch81]

5 minutes ago, batman10023 said:

who actually thinks that any owner is not aware of this insurance angle?  

 

Ummmm … no comment. I see what you’re up to — you just want to see me and Warfish fight some more 😬

[batman10023]

1 hour ago, Gaffneycatch81 said:

Just seems like you frequently find something to get high and mighty about, and in this case, I think it’s very likely that at least a significant share of that decision is squarely on Woody. And the article kind of made that clear. So yeah, your reply kind of annoyed me. But fair enough — your point that JD could also have been negligent here is valid. I’m can let it go and leave it there.

since this was directed at me -  i very rarely get high and mighty about anything - especially on this message board.

sorry if it annoyed you.

[batman10023]

2 minutes ago, Gaffneycatch81 said:

Ummmm … no comment. I see what you’re up to — you just want to see me and Warfish fight some more 😬

hmm, not really.  but okay.

[Gaffneycatch81]

1 minute ago, batman10023 said:

the cost won't be remotely close to $60MM.  

My guess that the IR average is $30MM and 2/3 of that is $20MM.   Assume 25% profit we are at $25MM spend on the owner.

Yes, true, my estimate was too high. The article said that it would cost $1-$4M for a $50M policy. Multiplying by 50 some players, I came up with $100M — but obviously, the vast majority of those would be insured for way less than $50M. So yeah … your math is probably about right — an owner could basically buy around $20M cap space per year (on average — some years more, some less) for about $25M out of pocket annually.

[Gaffneycatch81]

6 minutes ago, batman10023 said:

since this was directed at me -  i very rarely get high and mighty about anything - especially on this message board.

sorry if it annoyed you.

Wasn’t directed at you, man. That whole exchange was about Warfishes post … not sure what the misunderstanding is about — I just want back and looked, and my post is clearly responding to Warfish as he’s quoted at the top.

[AFJF]

5 hours ago, Asymmetrical said:

I, for one, am shocked that Woody is a shortsighted oaf. 

 

Woody's forward thinking is the reason why Olu Fashanu is a Jet.

[batman10023]

3 minutes ago, Gaffneycatch81 said:

Wasn’t directed at you, man. That whole exchange was about Warfishes post … not sure what the misunderstanding is about — I just want back and looked, and my post is clearly responding to Warfish as he’s quoted at the top.

no worries - you said the post was directed at "batman" - so i just wanted to make sure we are all good.

on the insurance cost - the 1-4mm cost on $50MM seems low.  i would have thought 3-5mm.

if it was 1-2mm - as an owner i'd insure my whole team.

i pledge to JN that if i become owner of the team and this loophole is allowed, I will insure the entire starting lineup.

[Gaffneycatch81]

5 minutes ago, batman10023 said:

no worries - you said the post was directed at "batman" - so i just wanted to make sure we are all good.

on the insurance cost - the 1-4mm cost on $50MM seems low.  i would have thought 3-5mm.

if it was 1-2mm - as an owner i'd insure my whole team.

i pledge to JN that if i become owner of the team and this loophole is allowed, I will insure the entire starting lineup.

Yeah, we’re good. I was referencing you in a different post on a different subject (this subect that we’re discussing here … not the “who’s fault is it, JD or Woody” subject that I was drawn in to)

[Nick Fangold]

This article is a bit misleading as it doesn’t really go into the terms of the contracts.  Generally insurance contracts for sports players only kick in if they suffer career ending injuries and are more commonly used in a sport like baseball where it’s all fully guaranteed for potentially long periods of time.  See David Wright retiring early wit time left on his contract.   In regards to Rodgers his cap hit was really low last year for the Jets so even if there was an insurance vehicle that would have paid out for him for last year (and I don’t think there would have been) it wouldn’t be the cap bonanza it’s being made out to be.  The insurance contract is much more relevant to a situation like Tua where they just gave him huge guaranteed money and he could potentially be told he can never play again .

[Gaffneycatch81]

3 minutes ago, Nick Fangold said:

This article is a bit misleading as it doesn’t really go into the terms of the contracts.  Generally insurance contracts for sports players only kick in if they suffer career ending injuries and are more commonly used in a sport like baseball where it’s all fully guaranteed for potentially long periods of time.  See David Wright retiring early wit time left on his contract.   In regards to Rodgers his cap hit was really low last year for the Jets so even if there was an insurance vehicle that would have paid out for him for last year (and I don’t think there would have been) it wouldn’t be the cap bonanza it’s being made out to be.  The insurance contract is much more relevant to a situation like Tua where they just gave him huge guaranteed money and he could potentially be told he can never play again .

I don’t know off the top of my head what Rodgers’ cap hit was last year. But you’re correct (and the article does make indirect reference to this) that the insurance policy’s vary from player to player, don’t kick in all circumstances, and usually don’t cover all money owed (guaranteed money). So, it’s debatable what the Jets could have gotten back for Rodgers last year — but is clear that Green Bay thought it was worth insuring it, and the Jets opted not to.

 

Tua, as you mentioned, is an interesting case. The article says the Dolphins DO have a policy on his contract, but that it most likely does not include concussions (because of his history). So, will be interesting see (if we ever find out) what they can recoup.

[varjet]

• This  insurance feature is a funny construct as reported.  Premiums (like coaches and GM salaries) are not part of the cap.
• If the player gets injured and there is an insurance payout, that counts to the NEXT YEAR's cap.  So its not like the insurance can be used to save a season.  Insurance is really a funny concept for it.  Its more like a financial instrument.  
• As a practical matter the insurance should be priced so that every dollar of premium returns less than a dollar of payout.  That is why someone like Woody does not buy it.  But:
  • If AR8 was covered in 2023, the Jets would have his insurance payout to work with IN 2024, in addition to having AR8 back.  That could pay for Reddick and Devonte Adams.  Super Bowl maybe?
• For a team that wanted to "buy cap space," like maybe the Eagle do, buying insurance will definitely get you more cap space, and then a better team.  There is a average of how often these policies pay out.  If you buy enough of them, you will get paid out.  But it is expensive, you are basically buy the cap space for a price of almost the amount of the cap space, and then you actually spend the cap space.  
• So paying up for Coaches and Executives and buying cap space is a way a cash rich owner can circumvent the NFL model and basically Steinbrenner their way to being more competitive.  

[Gaffneycatch81]

16 minutes ago, varjet said:

• This  insurance feature is a funny construct as reported.  Premiums (like coaches and GM salaries) are not part of the cap.
• If the player gets injured and there is an insurance payout, that counts to the NEXT YEAR's cap.  So its not like the insurance can be used to save a season.  Insurance is really a funny concept for it.  Its more like a financial instrument.  
• As a practical matter the insurance should be priced so that every dollar of premium returns less than a dollar of payout.  That is why someone like Woody does not buy it.  But:
  • If AR8 was covered in 2023, the Jets would have his insurance payout to work with IN 2024, in addition to having AR8 back.  That could pay for Reddick and Devonte Adams.  Super Bowl maybe?
• For a team that wanted to "buy cap space," like maybe the Eagle do, buying insurance will definitely get you more cap space, and then a better team.  There is a average of how often these policies pay out.  If you buy enough of them, you will get paid out.  But it is expensive, you are basically buy the cap space for a price of almost the amount of the cap space, and then you actually spend the cap space.  
• So paying up for Coaches and Executives and buying cap space is a way a cash rich owner can circumvent the NFL model and basically Steinbrenner their way to being more competitive.  

I don’t think it’s necessarily about being “cash rich” — a business the size of an NFL team, or an individual billionaire owner — can probably produce the money for these premiums (anywhere from a few million to insure one star player’s contract to 20M - 30M to insure a bunch of them). It’s more about an owner being willing to shell out of pocket (money he doesn’t have to spend, unlike the cap) in order to give his team a competitive advantage. And it does COST more than it will recoup in cap dollars, as you point out. And, I suspect, that same spendthrift owner would also have to not care about his fellow owners being furious with him (or her) for busting that cap system they all collectively bargained so hard for. 

[Asymmetrical]

3 hours ago, Warfish said:

Any snark in my original reply was not aimed at you personally, but the community in general. 

And more directly in response to the 2nd post in the thread, "I, for one, am shocked that Woody is a shortsighted oaf." than your post, which is why I didn't quote your OP.

If we're taking issue with things, I take issue with your direct reply to me that I "didn't read the article" when it's clear the article didn;t name a responsible individual, and people were, in fact, assuming/presuming it was Woody.

So...yeah.  /shrug.  We can keep taking issue with each other on rhetorical stylistic grounds, or (as it seems we do) mostly agree on the topic.

 

 

I'll stand by the Woody slander since, while the article doesn't/can't finger him specifically for turning down the insurance, the general context/sourcing in the piece points towards it being an ownership decision across the league. If it's the general manager's fault, we can throw it on the big pile of mistakes he's made but doesn't seem like there will be a clear smoking gun. 

[Jetpain]

I look at this a bit different, especially if i understand the article correctly .  Woody would have to pay for an insurance premium out of his pocket.  this expense could have been several million on Aaron Rodgers alone.  If he puts a claim in on Rodgers injury, Woody doesnt see an actual penny of that back in his pocket.   It is only salary cap money for the next season.  So his salary cap expense is basically the same each year, he doesnt actually save anything personally.  He is going to spend the same exact amount of money next year on the cap as that money just goes back into the salary pool.   Now... if on Rodgers injury if the premium expense Woody paid returned the articles + or - $22 mil into Woody or the current years cap, there is no doubt he would have bought a policy.  Woody is looking at this as the premium is just an expense without real money back if the insurance company pays a claim. 

[Asymmetrical]

2 hours ago, AFJF said:

Woody's forward thinking is the reason why Olu Fashanu is a Jet.

I would be shocked and appalled if he had anything to do with that decision other than rubber-stamping it after it was already made. 

[AFJF]

8 minutes ago, Asymmetrical said:

I would be shocked and appalled if he had anything to do with that decision other than rubber-stamping it after it was already made. 

One of the only people to be right about the details of the Rodgers situation as it all unfolded was Charles Robinson of Yahoo! sports.

He said well before the deal was done that one of the sticking points was Woody insisting on some type of protection against losing the 2024 1st round pick if Rodgers were to get injured.  Without that protection, there was going to be no deal.

[Gaffneycatch81]

7 minutes ago, AFJF said:

One of the only people to be right about the details of the Rodgers situation as it all unfolded was Charles Robinson of Yahoo! sports.

He said well before the deal was done that one of the sticking points was Woody insisting on some type of protection against losing the 2024 1st round pick if Rodgers were to get injured.  Without that protection, there was going to be no deal.

Good point, good memory. I remember that now too.

[bicketybam]

So the 3D chess move is to insure your highest paid player, hope he gets a season ending injury and then use the extra cap space to build a super team the next year? Uh, ok.