Vick gets thrown for loss as deal could be voided
Wednesday, August 22nd 2007, 4:00 AM
THE BIGGEST LOSER
Michael Vick stands to lose a fortune after he pleads guilty to dogfighting charges on Monday: His remaining base salaries and a pro-rated portion of $37 million in bonuses he has already been paid are in jeopardy.
Remaining Base Salaries
2007: $6 million
2008: $7.5 million
2009: $9 million
2010: $10.5 million
2011: $12 million
2012: $12.5 million
2013: $13.5 million
Bonuses already paid
The Falcons are expected to claim Vick is in default of his contract and demand repayment of the pro-rated share of bonuses based on the number of years left on his contract. Here are the bonuses he collected:
2004: $7.5 million signing bonus
2005: $22.5 million roster bonus
2006: $7 million roster bonus
The bill for Michael Vick's role in illegal dogfighting could reach a staggering $100 million in lost future salary, potential repayment of bonuses demanded by the Falcons for defaulting on his contract and endorsement money that is drying up.
That not does not include the cost to his reputation and image. No price tag can be put on that damage, which may be irreparable.
Vick will plead guilty to federal dogfighting charges Monday in Richmond, Va. A sentencing date has not been set, but it is anticipated he will spend 12-18 months in prison. NFL commissioner Roger Goodell could then add a year's suspension, meaning Vick's earliest re-entry into the NFL appears to be 2010, assuming a team wants to take on the baggage and negative publicity that will come with signing him.
The grand total for Vick's potential financial losses: $71 million in base salary, as much as $25 million in bonus repayment, depending on the interpretation of roster bonuses in the new collective bargaining agreement and $3 million-$5 million per year in endorsements.
"It's game over from a marketing standpoint for Michael Vick," one industry expert said yesterday.
The Falcons signed Vick to a 10-year, $130 million contract in December, 2004, the largest in NFL history. He has already collected about $40 million, including $37 million in signing and roster bonuses. Sources expect the Falcons to aggressively pursue Vick repaying the pro-rated portion of the $37 million, which could be as high as $25 million. Sources also indicated they expect Vick to challenge the amount. The Falcons could also face opposition from the NFL Players Association. The dispute could wind up going to an arbitrator.
Vick's contract included a $7.5 million signing bonus, which was paid in three installments, the last one within five months of signing the contract; a $22.5 million roster bonus in 2005 that was paid out with $4.5 million upfront, $8 million on Oct.15, 2005 and $10 million on March 15, 2006 and for salary-cap purposes counted as a signing bonus. He also had a $7 million roster bonus for 2006 that was paid in full on March 15 this year, about half of which was counted as a signing bonus in the cap.
There is default language in the contract that makes Vick vulnerable to the Falcons pursuing reimbursement. Part of the clause allows for a pro-rated share to be recouped if Vick "is suspended by the NFL or Club for Conduct Detrimental, or is suspended for violating any of the NFL's disciplinary policies or programs, including but not limited to, the NFL Policy and Program for Substances of Abuse, the NFL Policy and Procedures for Anabolic Steroids and Related Substances and the NFL Personal Conduct Policy, then Player shall be in default of this agreement."
Vick voided out the last year of his contract in 2014 at $17 million after reaching a 45% playing time incentive, thus leaving $71 million in non-guaranteed base salaries from 2007-2013 on the table. The Falcons are expected to cut Vick - but not quite yet. Goodell has asked them to refrain from taking any action against him pending a decision by the commissioner.
And with salary-cap savings available if the Falcons wait until the start on the 2008 league year next March, there is no need for them to release him now. The collective bargaining agreement allows teams to release a specified number of players before June 1 but still get the June1 benefit of avoiding immediate acceleration into the salary cap.
Vick was due to make $6 million in base salary this year. That will come off the Falcons books. So will his future base salaries, including the $7.5 million he was due to make next year. Atlanta should have ample salary-cap room to sign a veteran quarterback next year. The problem is franchise quarterbacks rarely make it to the open market. If Atlanta has a bad season, it will have a high 2008 draft pick. That could allow new coach Bobby Petrino to draft Brian Brohm, his quarterback at Louisville.
Rawlings ended its endorsement deal with Vick, Nike suspended his contract, Upper Deck and Donruss are not including Vick's trading card in their releases this season and the NFL is no longer selling Vick merchandise through its online store.
"He has just become radioactive," Marc Ganis, the president of Sportscorp Ltd., a Chicago-based sports business consulting firm, said after Vick was indicted last month.
Show me a good loser, and I'll show you a loser.
"None are so old as those who have outlived enthusiasm".
Henry David Thoreau
Fail to prepare and you prepare to fail.
"Luck is the residue of design." - Branch Rickey