Richard Sherman’s self-negotiated contract and the case for hiring an agent

Richard Sherman has never been one to shy away from controversy or go against the grain, on or off the field. So it wasn’t a complete surprise when, two years ago, the 49ers’ Pro Bowl cornerback decided to represent himself in free agency and negotiate his own contract without an agent following his release from the Seahawks. 

The Stanford grad is one of the brightest minds playing today. He’s not the first NFL player to act as his own agent, although the few who have negotiated on their own behalf in the past typically made minimum salary. In Sherman’s case, the principal terms of the contract were well defined, and just a few incentives needed to be added.

He wound up signing an incentive-heavy $27 million deal with San Francisco with only $9.05 million guaranteed, drawing criticism at the time.

By making the Pro Bowl, being selected second-team All-Pro and achieving a playing time bonus this season, Sherman has added approximately $5 million to his $27 million base over the 2018, 2019 and 2020 seasons.

DIAMOND: An apology for doubting San Francisco’s surprising Super Bowl run

I know he thinks he did well in the final analysis on his contract. In recent weeks, Sherman on Twitter has pounced at several media people who questioned his wisdom regarding negotiating on his own and the resulting contract, which could have maxed out at $39 million if he hit all the incentives.

I hate to burst Sherman’s bubble, but the facts are that he accepted a limited guarantee of $3 million upon signing, along with another $2 million roster bonus upon reporting to last year’s training camp. That $5 million effective guarantee is only 13 percent of the $39 million maximum attainable income, which is well below market for a player who had made four Pro Bowls at the time, even if he was coming off a major surgery.

Most established vets who have been elite players in the past will get at least 50 percent of the contract guaranteed. 

It fits Sherman’s persona to act as his own agent. But I raised an eyebrow over a then-30-year-old taking on this responsibility after the Achilles injury ended his 2017 season in Week 10. He was walking into a situation in which those teams interested in him would want to tread carefully on the financial commitment. He also had just finished playing under one of the largest cornerback contracts in the league at $14 million per year, so his expectations would be high.

Sherman likely felt he could afford to take the risks inherent with negotiating his own contract, perhaps because he had made substantial money in his seven previous seasons (nearly $50 million, per Spotrac). And with an abundance of self-confidence, he believed he could take on any general manager just as he regularly locks down the NFL’s top wide receivers. 

As a former NFL GM and president who negotiated contracts for 20 years, I never did negotiate a contract with one of my own players directly.

I would not have minded sitting down at the bargaining table with a player as long as he was even-keeled and could keep his emotions in check. It wouldn’t have changed my negotiation strategy, either. I always tried to reach an agreement that both sides felt was fair.

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I also tried my best to stay positive in a negotiation and not over-emphasize a player’s weaknesses. I wouldn’t have been concerned with insulting a player face-to-face, because I always operated under the assumption anything I said to an agent would get back to the player.

If I had negotiated with a player such as Sherman, I wouldn’t have licked my chops at a chance to get a heavily team-favored deal. I never wanted to destroy an agent or a player in a negotiation. I believed if they felt taken advantage of, it could affect future negotiations with the agent on the particular player or negatively impact the opportunity to sign a free agent that the agent represented.

After all, I was working within a system — which is still in place — that said NFL players could hit free agency after their fourth season as long as the team didn’t slap a franchise tag on them. 

I would have recommended that Sherman hire an agent to handle his contract work, and I’m not just saying that because I currently do consulting work for an agent group.

To rely on Pro Bowl and All-Pro selections is certainly a shaky proposition given the popularity contests that usually determine who makes those teams. It looks good now that Sherman got his 2020 base salary guaranteed by making the Pro Bowl this season, but if I were a player I would prefer to have a more objective factor (such as playing time) serve as a trigger on that guarantee. 

He also did not visit with a team other than the 49ers, which limited his negotiating power with John Lynch and San Francisco’s brass. I think it would have helped him increase the guarantees and lower the active roster bonuses he wound up earning ($125,000 per game for a $2 million maximum under the initial deal) if he had found another team to bid on his services. 

Even if he made a couple calls to other GMs, it’s obvious that Sherman was determined to play in his home state of California and in the Bay Area, where he attended college, so he could seek revenge twice a year against the Seahawks team that gave up on him.

Sherman could have benefited from the fact that good agents and their support staff do so much more for their players than just handling contracts. They help with the transition to a new city for a player and his family in terms of housing, schools for the kids and other needs. They coordinate marketing activities, which for a well-known player such as Sherman can amount to millions in off-field income (so he likely had to take the time to research and then hire an outside marketing firm). 

Astute agents help build a player’s charitable endeavors and their foundation. They assist in setting up an excellent offseason training regimen that is so important to extending careers. They find qualified doctors to get second opinions on injuries when needed and fight league or club fines by setting appeals in motion for their player clients.

I strongly feel Sherman would have done better — in his contract and in his personal existence — with an agent representing him.

He already had earned enough money during his Seattle years for he, his wife and children to be set for life. I don’t see how saving the 3 percent commission paid to an agent is worth the time he spent doing the research on cornerback salaries, talking with the Players’ Association about necessary steps, and engaging in the actual negotiating process along with losing out on the other services an agent provides.

Jeff Diamond is a former president of the Titans and former vice president/general manager of the Vikings. He was selected NFL Executive of the Year in 1998. Diamond is currently a business and sports consultant who also does broadcast and online media work. He makes speaking appearances to corporate/civic groups and college classes on negotiation and sports business/sports management. He is the former chairman and CEO of The Ingram Group. Follow Jeff on Twitter: @jeffdiamondNFL.