Watson’s suspension will cost him $5.69 million: How it affects his massive deal

There has been plenty of focus on the suspension portion of the punishment handed down to Cleveland Browns quarterback Deshaun Watson on Thursday, but the $5 million fine that goes with Watson’s negotiated 11-game suspension is noteworthy for a couple of reasons.

Watson, who was accused by more than two dozen women of sexual misconduct during massage sessions, is believed to be the first player fined under the NFL’s personal conduct policy. In previous cases the league determined a suspension without pay was adequate. A player making $18 million per year for an 18-week (17-game) season who was suspended for nine games would lose $9 million in such a scenario.

But in the case of Watson, the NFL was determined to factor a fine into the final discipline for two reasons:

First, Watson earned his entire $10.5 million salary from the Houston Texans last year despite not playing a single game, and sources say there were more than a few people at the league office (not to mention among the general public) who thought he should face some sort of retroactive financial consequence for the 2021 season.

Second, Watson’s contract structure with the Browns lessens the financial impact of a suspension. That structure, which has been widely reported and extensively debated since Cleveland traded for Watson and signed him to the new deal, was also impacted by the contract extension Watson signed with the Texans in the summer of 2020. Combine the two deals, and Watson’s total earnings between the summer of 2020 and March 31 of next year will total at least $78.81 million after accounting for the $5 million fine.

Start with the current deal. Watson’s fully guaranteed, five-year, $230 million contract with Cleveland featured a $44.965 million signing bonus and a 2022 salary of $1.035 million, which is the minimum 2022 salary for a player like Watson with between four and six years of service time. That means the 11-game suspension, which covers 12 weeks of the season because the Browns’ bye week falls in Week 9, will cost Watson only $690,000. (Players get paid weekly during the regular season in equal, 18-part installments.)

Now, a couple of points on this, because the Browns’ structuring the contract this way angered a lot of people who believed they were doing Watson an unnecessary favor:

• Quite a few NFL contracts are structured this way, with a large signing bonus the team can spread out over the life of the deal (up to five years) for salary cap purposes and a low (often minimum) first-year salary. Tyreek Hill, for example, got a $25.5 million signing bonus and a minimum $1.035 million salary in 2022 on his Miami Dolphins deal this offseason. A.J. Brown‘s deal with the Philadelphia Eagles is similar in structure.

• The Browns were doing themselves a favor on the structure of the contract as much as they were doing Watson one. On the day they acquired Watson, even after restructuring the deals of Amari Cooper and Case Keenum to save cap room, they had $1.7 million in cap space — the third-lowest figure in the NFL at the time. Cleveland couldn’t have operated the rest of its offseason if it hadn’t structured the Watson deal this way.

• The deal actually covered the Browns well if Watson had been suspended for a full season, since his contract would have tolled and the $1.035 million season would have been 2023 instead of 2022.

If you want to criticize the Browns for acquiring Watson at all, or for guaranteeing the whole contract as a means of doing so, that’s fair. But the first-year contract structure wasn’t some slimy way of saving Watson money. It was standard NFL business.

Regardless, as mentioned, the contract structure bothered a lot of people, and the NFL believed a fine on top of the suspension was called for. So instead of $690,000, the discipline will cost Watson $5.69 million.

What does that mean to him? Not a great deal, and the nature of that aforementioned contract extension Watson signed with Houston in 2020 is at the root.

When Watson signed his contract extension with the Texans in 2020, he got a $27 million signing bonus plus a 2020 salary of about $1.177 million. So he pocketed more than $28 million that season. The following year, in 2021, Watson made $10.5 million in salary even though he didn’t play. In January 2021, less than two months before the first civil lawsuit was filed against Watson, he told the Texans he didn’t want to play for them anymore. The subsequent civil suits and criminal investigation of him for sexual misconduct impeded the Texans’ ability to trade Watson during the 2021 season, so they left him inactive every week and he made all of his money.

When Watson was traded to the Browns, Cleveland tore up the rest of his contract and gave him that fully guaranteed five-year, $230 million deal with the $44.965 million signing bonus. According to his contract, a copy of which ESPN has obtained, the signing bonus is paid in three parts: $15 million was due by July 31. Another $15 million is due by Jan. 31, 2023. And the final $14.965 million is due by March 31, 2023.

So, since Watson signed his deal with Houston in the summer of 2020, he has made roughly $53.5 million, with another $29.965 million in bonus money coming in the next eight months on top of the $345,000 he’ll earn in salary over the final six weeks of the 2022 season.

That adds up to $83.81 million, minus Thursday’s $5 million fine. Assuming he plays the final six games of the Browns’ 2022 season, he will have played a total of 22 games over that time period plus any playoff games the Browns might play this year.

Watson then has $46 million in fully guaranteed salary coming each year from 2023 to 2026.

A $5 million fine feels small by comparison, but it’s clear the NFL felt it had to do something to dent that income when a suspension wasn’t going to do it on its own.