Falcons asking for $20 million; experts say it could be only $3.5M
By Len Pasquarelli
Updated: August 29, 2007, 5:05 PM ET
ATLANTA -- The Atlanta Falcons formally sent a demand letter to Michael Vick on Monday, asking to recover $20 million of the $37 million in total bonuses paid to Vick under terms of the 10-year extension that he signed on Christmas Eve 2004.
The unanswered question: how much of that $20 million will the Falcons actually receive? Most experts agree that the Falcons probably will eventually recoup only a fraction of what they are seeking, perhaps as little as $3.5 million by some estimates. And that amount might not be clear for a long time, given that the matter is almost certain to be resolved by an arbitrator.
New sentencing date?
In a separate matter, sources close to Vick told ESPN.com that his legal team is exploring its options in attempting to have his sentencing by U.S. District Judge Henry E. Hudson moved to an earlier date. Those same sources said the Vick camp has yet to hear directly from NFL commissioner Roger Goodell about a face-to-face meeting with the banished quarterback.
Hudson on Monday set Dec. 10 for sentencing Vick. Federal authorities have recommended that Vick serve a sentence of 12-18 months, ESPN's Kelly Naqi reported. Hudson, however, does not have to accept that recommendation. Chris Mortensen of ESPN reported Monday that Goodell likely will meet with Vick before the Falcons' star begins serving prison time.
NFL Players Association executive director Gene Upshaw, perhaps communicating with Vick's lead counsel, Billy Martin, may play some role in arranging such a meeting.
-- Len Pasquarelli
Falcons president/general manager Rich McKay on Wednesday declined to comment on the team's efforts to recapture bonus money, and referred to comments that he and owner Arthur Blank offered on Monday during a press conference following Vick's plea.
"We have studied [our] options a lot," McKay said at the time.
The attempt by the Falcons to recover a portion of Vick's bonuses was not unexpected. For much of the months-long ordeal, it was speculated that Atlanta would seek to recoup part of the bonus money if Vick defaulted on his contract. Blank and McKay confirmed that in their Monday news conference. Neither Blank nor McKay commented Monday on how much the Falcons might try to recover.
The $20 million amount, generally estimated at $22 million-$29 million in previous media reports, was confirmed for ESPN.com by league sources.
The lone certainty, at least for now, is that the Falcons are not liable for Vick's scheduled $6 million base salary for 2007, as he serves the indefinite suspension that Goodell imposed on him. That $6 million amount will be credited to the Atlanta salary cap for this season.
In terms of recoverable bonus money, though, the matter is anything but simple. And it is certainly complicated by an arbitration ruling last November in a case involving former Denver Broncos wide receiver Ashley Lelie, who, ironically, played for the Falcons in 2006.
In that ruling, an arbitrator stipulated that teams cannot recover option bonuses or prorated shares of option bonuses, and appeared to severely limit the money that teams could recoup if a player defaulted on his contract. Providing even more teeth to the ruling was that the decision by the arbitrator was sealed by U.S. District Judge David Doty, who has jurisdiction over the collective bargaining agreement between the NFL and the NFLPA.
Much of Vick's bonus money, $29.5 million of the $37 million, was characterized as roster bonuses in the December 2004 extension. Some experts who have carefully studied the Lelie ruling generally feel that roster bonuses will be viewed as similar to option bonuses if teams attempt to recover them.
That might mean Atlanta would only be able to pursue a prorated share of the initial $7.5 million singing bonus Vick received in three installments as part of his 10-year extension. For salary cap bookkeeping purposes, that signing bonus was prorated over six years, the 2004 through 2009 seasons. Since Vick fulfilled his contract in three of those six seasons, the Falcons might be entitled to only half of the signing bonus money.
The contract extension called for Vick to receive a roster bonus of $22.5 million in 2005, and a second roster bonus of $7 million in 2006. According to a copy of Vick's contract, the first of those bonuses was paid in three installments: $4.5 million in February 2005, $8 million on Oct. 15 of that year and $10 million on March 16, 2006. The second roster bonus was paid in full on March 15 of this year.
But for salary cap purposes, the Falcons converted about $26 million of the $29.5 million in roster bonuses to signing bonuses, allowing that the money to be prorated.
The Falcons might argue that, since the roster bonuses were converted to signing bonuses, they have the right to seek repayment. Vick would likely counter that it was the prerogative of the Falcons to convert the money into signing bonuses, that they were not bound to do so, and that they are characterized as roster bonuses in the original extension document of 2004.
Falcons officials have spent considerable time consulting with the NFL's Management Council, which is the labor arm of the league, about their rights to recover bonus money. It appears that the amount Atlanta is seeking is generally based on the remaining prorated shares of the three bonuses paid to Vick on the 2004 extension.
There is very precise default language in the contract and it leaves little doubt that Atlanta can seek some sort of recourse. In part, the default language stipulates the Falcons can take action against Vick if he "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."
Also included is a formula for determining the amount that Vick could be asked to forfeit if he defaulted on the contract. The formula: total bonus money, multiplied by the remaining number of games left on the contract, divided by the total games covered in the contract. By that formula, it would seem Vick could be liable for as much as $28 million-$29 million.
But the ruling in the Lelie case supersedes the forfeiture language in the Vick contract and, again, appears to severely limit the amount the Falcons will eventually recover.
Atlanta will not be liable for any of the base salaries in seasons Vick does not play. The base salaries after this season were to have been $7.5 million (for 2008), $9 million (2009), $10.5 million (2010), $12 million (2011), $12.5 million (2012), and $13.5 million (2013). There was a base salary of $17 million for 2014, but that season was voided once Vick reached predetermined playing time thresholds.
Including the Lelie ruling, the NFLPA has won several key battles in recent years to limit the amount that teams can recover in such default cases, and the players association certainly will take up Vick's cause in any arbitration action.
On Tuesday, union president Troy Vincent dispatched a letter to his constituents in which he reiterated that stance.
Vincent wrote, in part: "As you may have heard, the Atlanta Falcons have sent a demand letter to Michael Vick for repayment of certain bonuses previously (paid) under his NFL Player Contract as a result of his plea to dog-fighting charges in Federal Court in Richmond, and his subsequent suspension by Commissioner Goodell. As we do with all our members, we will represent Mike in any efforts by the Falcons to recoup monies previously paid to him, and we will make sure that his rights under his player contract and the CBA are fully enforced. As a union, our responsibility is to protect our members' rights as it pertains to hours, wages, and working conditions, and this case is no different. We will continue as an organization to protect and serve all of our members."
Len Pasquarelli is a senior writer for ESPN.com. ESPN NFL reporter Chris Mortensen contributed to this story.
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