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Layoff vs. payoffs

March 08, 2009|Sally Jenkins | Sally Jenkins is a columnist for the Washington Post.

As long as the Washington Redskins go by the motto "why pay less?" it will be difficult to defend them. Spreadsheets to them apparently mean table linens. Obviously, my own bookkeeping is not to be trusted, because just a few weeks ago, I assumed the team was distressed. Otherwise, why would it have laid off so many people? Turns out I made an accounting error.

It's baffling: One day a team lays off dozens of employees in the legal, marketing, information technology, public relations, game-day operations, television and even the cheerleading staffs. Then, suddenly, it shells out huge sums for free agents. In one 24-hour spending binge, the Redskins extended $182 million in contracts to just three players, including that whopping $100 million over seven years to defensive tackle Albert Haynesworth, while offering a bust like Jason Taylor a $500,000 bonus just to work out.

Can someone help me with the math?

What to make of this combination of layoffs and big spending? Is it a question of lousy addition -- or just an outrage?

The question of those laid-off workers lies underneath all the player salary numbers, like something moving at the bottom of a pile. Surely there is a rationale. Michael Josephson, founder of the Josephson Institute of Ethics, cautions against knee-jerk reaction. "The challenge is to overcome that immediate instinct of saying, 'How can you cut here and spend here?'" Josephson said. "We have the responsibility to look a little deeper than that. For any organization to survive they have to be solvent, and so management has that responsibility of knowing where to pay and where to cut."

Let's look deeper, then. The Redskins are not the only team to pay large while cutting jobs. A dozen NFL teams have shed administrative staff. The Denver Broncos have laid off workers while paying off former coach Mike Shanahan to the tune of $20 million. The Carolina Panthers have shed 20 employees, the Cleveland Browns 18, the Tampa Bay Buccaneers 12. The NFL itself has reduced its headquarters staff by 169. Meanwhile, the league's labor agreement mandates that each team spend at least $111 million on player salaries, for a total of about $4.5 billion.

Although it's unpalatable to say so, some people are simply far more valuable than others. Players are revenue producers, while administrative assistants and seasonal security guards are not. "Some people can generate income, and some can't," Josephson said. "That's inherent in business. I may have to lay off 10 janitors, but I still have to pay my top salesmen a bonus, because if I lose my salesmen I lose everything." It's the responsibility of the Redskins' front office to put the most competitive players on the field, and to control costs and efficiency in a bad economy without harming the essential product: the team.

"There's no getting around the fact that there's symbolism involved on both ends," said Peter Roby, athletic director at Northeastern and head of the Center for the Study of Sport in Society. "If you don't sign a free agent of the magnitude of Haynesworth, can you compete in the marketplace and justify the ticket prices and sponsorship packages that you require and target for fans, if they don't think you are making decisions that allow you to compete for a Super Bowl? On other hand, you also want to send a signal to staff that you're trying to be as fiscally prudent and responsible as you can."

Something else to understand is that the Redskins won't actually spend $182 million. The Haynesworth contract is worth less than it appears to be: $100 million over seven years doesn't really mean $100 million; it actually means about half that. Haynesworth's agreement has a "poison pill" in the fifth year that makes it closer to a four-year deal worth $48 million.

Still, these explanations aren't entirely satisfactory when it comes to the Redskins. The fact remains that the team has spent heedlessly compared with its NFL peers. The binge, while less than the numbers indicate, nevertheless will mean guaranteed payouts of $72.5 million to Haynesworth, cornerback DeAngelo Hall and guard Derrick Dockery -- at a time when the team has undergone not one but two rounds of staff cuts.

It is difficult to defend the team, given its history of high-cost, low-yield player decisions. Record payouts to stars have often as not resulted in sub-par, unmotivated performances. Just Monday, the Redskins released Taylor, a supposed difference-maker at defensive end for whom they gave up second- and sixth-round draft picks, and who was due $8.5 million this year -- after one season in burgundy and gold that was a career low point. He was made so rich by the Redskins that he could afford to decline a $500,000 incentive to attend off-season workouts. Taylor's departure, combined with the release of Marcus Washington and Shawn Springs, allowed the Redskins to offset $18.5 million in costs.

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