Perspective on the Business Decisions Around Andrew Luck's Retirement From the NFL
With the inexorable flow of NFL news over the last week, even the NFL offseason’s biggest story lost steam amid the flurry of activity over the past week. That story, however, is too important to leave behind, as I have not yet commented on Andrew Luck’s retirement in this space. I have some thoughts on Luck, hopefully bringing a unique perspective with different insights than you have seen elsewhere.
My name is Andrew, I went to Stanford, and I left the NFL to pursue a fuller, more diverse life. I believe the same is true for another Andrew who went to Stanford. I do not profess to know Andrew Luck, but I know people who know him well, and I know his father Oliver (we were general managers together in the NFL’s World League) and uncle (Luck’s agent).
Andrew Luck is, well, different. And that is not a bad thing.
Luck would have been the top overall pick in the 2011 NFL draft, but chose Stanford and Palo Alto over the Carolina Panthers and Charlotte (they picked Cam Newton instead). It reminded me of when I was advising Ricky Williams when he decided to stay at Texas after his junior year, rather than turn pro and be one of the top picks in the draft. He said to me: “Why would I go and be drafted by St. Louis or Chicago when I can stay here in Austin? Next year I know I have to leave Austin.” Luck has been compared to Williams in some circles for his eccentricity and early retirement, and I do see some of that (minus any use of marijuana).
Luck has never used a smart phone (I can’t imagine another NFL player not having one). He secured two top-of-market quarterback contracts without the use of a traditional agent or agency, using his uncle instead. He has a book club. And one personal memory I will never forget: When I spoke at Stanford during Alumni Weekend in the fall of 2011, I saw a student at the cafeteria eating while hunched over a computer, books and calculators strewn around him. That student was Luck, the presumptive top pick in the next NFL draft who, oh by the way, had a game against UCLA the next day.
Maybe Luck’s retirement shouldn’t be that big a surprise. Tired of the “cycle of pain,” Luck—married to a woman from the Czech Republic, now with a child on the way—has a vision about a better future, a fuller life with a bigger blueprint.
Two final thoughts on Luck:
The dream transition ends
I was incredibly fortunate to be in the Packers front office as we had the most rare of all NFL, transitions: moving from one franchise quarterback (Brett Favre) to another (Aaron Rodgers). That rarity also happened in Indianapolis. Peyton Manning’s complete absence in 2011 after three neck surgeries gave the Colts a grooved path to Luck with the first pick in the 2012 draft. Now, for the first time in two decades, Colts fans will have to deal with the inevitable drop-off at the game’s most important position that every NFL franchise has or will encounter (except the Packers).
So much money left behind
Luck had the highest of pedigrees for NFL earnings, entering as the top overall pick and receiving a then-record setting extension four years later. He made $97 million in seven years with the Colts.
Although NFL teams are permitted to recover unamortized bonus from players who retire with years remaining on their contracts, the Colts are reportedly not going to pursue recovery of over $16 million from Luck. Their decision may be an acknowledgement of not providing much protection around Luck, especially in his early years. And conversely, Luck could have stayed on the roster on an injured list and collected his salary of over $9 million, an amount he is foregoing.
What remains unclear, however, is the status of the $12 million roster bonus “earned” by Luck in March. Payment terms reportedly included half in March (paid) and the remaining $6 million due this fall. It will be interesting to see if $6 million due will be paid. Luck could reasonably argue that he was on the roster at the time of the “roster bonus”; the Colts could counter that the bonus was paid with the assumption that Luck would be the roster during the season. Both arguments have some validity but again, reports indicate this has already been worked out. My sense is that if it is true the Colts are giving up the right to go after $16.8 million of unamortized bonus then Luck is giving up the right to receive this $6 million.
The most striking money angle here, to me, is the potential amount of future earnings that Luck is forfeiting going forward. Assuming a return to full health, Luck, at age 29, could have played many more years with a realistic chance for two more contract extensions. With elite quarterbacks potentially crossing the $40 million a year threshold by next season—and maybe the $50 million threshold by 2024-25—Luck could have made truly generational wealth in the next 8-12 years. How much? Maybe $300 million, perhaps $400 million, and it would not be totally out of line to suggest he is losing a potential half a billion dollars of future earnings.
Which, of course, brings us back to where we started in discussing Andrew Luck. I don’t think Luck will think about those lost future earnings for one minute. In fact, I don’t think Andrew Luck will miss football…at all. He is, well, just different. And that is not a bad thing. I get it.
I always tell players “Don’t look at football as a life. Look at it as a head start on life.” Andrew Luck has a nice head start on what looks to be a fuller life ahead.
Now five more thoughts entering the season:
1. The flurry of activity from the Texans this weekend illustrates the peril of a team acting without a general manager experienced in trade and contract negotiations and, in parallel, the dangers of a head coach making management decisions. Texans coach Bill O’Brien, in the two trades made on Saturday, was probably thinking (1) “Clowney’s unhappy here, get him out of here, NOW,” and (2) “We need Tunsil bad, let’s get him, no matter what it takes, NOW.” The fact that the Texans paid Clowney $7 million to go away is astounding; I can’t believe the Seahawks would have killed the deal without the Texans paying part of the freight. As for Tunsil, I assumed we’d see a companion contract extension with the trade, one that never came. The Texans may as well have handed Tunsil a contract to fill out, as he is now armed with extraordinary leverage. With a general manager in Houston, there would have been more deliberations, more negotiations and, most importantly, more attention paid to the future of the franchise. The coach-as-general-manager—Bill Belichick excluded—is a leadership model that has not and cannot work as coaches, by their nature, prioritize short-term gain over long term, sustained success.
2. Congratulations! You played as much this preseason as Aaron Rodgers, Carson Wentz, Philip Rivers, Julio Jones and many more NFL stars! Also, each NFL team is now 0-0. Did the NFL preseason even happen?
3. Yes, something has to be done about the preseason. But to the NFL, everything is a negotiation. They will gladly reduce or change the preseason, but will want something from the union in return. Namely, more regular season and/or postseason games.
4. Ezekiel Elliot and Melvin Gordon have three options: (1) return to the team on their existing contract; (2) stay away from the team and receive no income; or (3) sign the contract offered by the team, giving them large raises but not the deals they want. It has been a “careful what you wish for” scenario, one that, as I wrote here, will ultimately benefit the team more than the player. As for Gordon now being able to seek a trade, he will need a team (1) willing to give the Chargers adequate draft compensation, and (2) willing to give Gordon adequate contract compensation. As I often say...good luck with that.
5. Labor Day weekend in the NFL is stark; 30% of the NFL labor force is wiped away through massive firings we label “cuts.” Many of these players did everything asked for the last five months but, in reality, had no chance of making it from the moment they were signed. I always hated this weekend not only from an agent perspective but also from a team one. I did learn a lot about players we released, though. Obviously, some were bitter and angry, but others were professional, thankful for the opportunity and, well, made me want to hire them beyond football. Any way you look at it, though, the business of football is a cold one in the heat and humidity of Labor Day weekend.
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