The big news for the Seattle Seahawks on Thursday was obviously the fact that the team had brought suit in federal court in Michigan in order to force former second round pick Malik McDowell to pay back $799,238 of signing bonus which he owes the team. There have been a lot of misunderstandings about the situation and how things came to be exactly what they are, so I’m going to try and clarify some things today.
For starters, the exact amount that the Seahawks are looking to collect from McDowell is, as noted about, $799,238, plus interest and fees. I’m going to ignore the interest and fees for now, as those are uncertain and only muddy the picture. That said, the legal representation listed for the team in the court filing is Skadden Arps, so for those familiar with the cost of legal services from Skadden, you know the fees could be substantial.
However, getting back to how the amount of $799,238 was arrived at, we need to go back to the signing bonus from McDowell’s rookie contract. After being drafted with the 35th pick in the 2017 draft, his rookie contract had a signing bonus of $3,198,476. That $3,198,476 was to be recognized against the salary cap in four equal cap charges of $799,619 in each league year from 2017 through 2020.
The next step that needs to be understood in order to avoid confusion is the fact that McDowell’s signing bonus was not paid out all at once. Per the terms of the contract, it was to be paid out in three installments. The first installment was for $1,598,476 and was paid shortly after the contract was signed. There were then two further installments, each in the amount of $800,000, which were to be paid in the summer of 2017 and the summer of 2018. McDowell received the first installment of $1,598,476 and he received the second installment of $800,000 during July 2017. However, the team never paid the third installment, the second payment of $800,000 which was due in 2018.
Just in case anyone is confuse, let’s look at this in table format because that might help some understand the details.
So, McDowell only ever received $2,389,476 because the team refused to pay him the $800,000 that was due to him during the summer of 2018.
The amount McDowell received is important because when the arbitrator ruled in favor of the Seahawks, because McDowell never received the summer 2018 payment of $800,000 that went as a credit towards the arbitration judgment. Thus, that amount was deducted from the amount the arbitrator ruled McDowell owed the Seahawks, and how it came to be that the amount he needed to pay the team is $799,238. For those who want to see the math equation behind this, it’s simply $1,599,238 – $800,000 = $799,238. That is the amount McDowell was found to owe the Seahawks for his breach, less the $800,000 credited to him for not receiving the final $800,000 payment.
Now, moving on to the next item is why the Seahawks only asked for half of the signing bonus back. According to the court filing, when the team originally filed the arbitration against McDowell, it was seeking to recover the signing bonus in its entirety. The court filing then goes on to state that, “After negotiations with Mr. McDowell and NFLPA, the Seahawks amended their arbitration demand to seek only forfeiture of Mr. McDowell’s 2017 and 2018 Signing Bonus Allocations.”
The team originally filed to go after the full $3.2M signing bonus.
The CBA doesn’t allow that, so the Hawks “agreed” with McDowell and the NFLPA to only go after half of the $3.2M (the 2017 and 2018 portions of the signing bonus). pic.twitter.com/CC0RL7UkPf
— John P. Gilbert (@JohnPGilbertNFL) May 31, 2019
That might make it seem like the Seahawks were being empathetic to McDowell’s situation, but that is hardly the case. The simple fact of the matter is, as I covered for Field Gulls more than a year ago, under the CBA the team was only entitled to go after McDowell’s 2017 and 2018 portions of the signing bonus, and had no grounds to go after the 2019 and 2020 allocations. If you want the full explanation for why that is the case, feel free to click on the linked article, but for this piece the short version will suffice.
That short version is that under the terms of the CBA, a player cannot be found to have breached their contract by undertaking unreasonably dangerous activities until they are not available to a team in a specific season. Thus, even though McDowell likely would not be able to report for training camp in July, under the CBA he cannot be held to have committed a forfeitable breach of his contract until he is not available in that specific season. So, while it may seem all but certain that McDowell will not be available when training camp opens this season or next, because that is still a future event that remains uncertain, McDowell has not technically breached his contract for either 2019 or 2020. Further, given that the Seahawks waived McDowell, the potential to breach his contract in 2019 and 2020 is eliminated because he no longer has any obligation to be available to the team for either the 2019 or 2020 season.
Lastly, one thing that I would like to clear up is that I’ve seen the sentiment both here on Field Gulls and on social media that the team is only doing this and going after McDowell’s signing bonus because he and his agent are out talking up the idea of playing for another team. Based on the court filing, that does not appear to be the case.
To best explain this, I need to lay out a small timeline of events.
April 28, 2017: Seahawks draft McDowell
Approximately July 17, 2017: McDowell injured in ATV accident
July 29, 2017: McDowell fails to report for training camp
July 20, 2018: Seahawks file arbitration against McDowell seeking recovery of signing bonus
July 26, 2018: Seahawks waive McDowell
That might be a bit surprising, but assuming the court filing is correct, the Seahawks filed the arbitration against McDowell nearly a full week before waiving him. If that is the case, why did they wait to waive him if they had already filed for recovery of the signing bonus? The answer is simple – by waiting until the first day of training camp to waive him, they gained the ability to recover the 2018 portion of the signing bonus because as soon as he was not available he had breached his contract for 2018.
In short, the team filed the arbitration against him the week before training camp started. If the team had wanted to be nice or empathetic, they could have waived him on the 25th on eve of training camp, but that would have cost them the ability to recover the $799,619 of 2018 signing bonus allocation. Basically, they knew what they were doing and worked the system in order to squeeze McDowell for as much as they could without having to keep him around any longer than necessary.