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Old 03-26-2006, 10:05 AM   #1
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Question Poison Pill in contracts

Can some one explain this stuff to me? I don't understand it, how does it work?
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Old 03-26-2006, 10:19 AM   #2
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Default Re: Poison Pill in contracts

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Originally Posted by Stlrs4Life
Can some one explain this stuff to me? I don't understand it, how does it work?
Many lawyers are familiar with a "poison pill" in corporate law, which are defensive measures intended to prevent hostile takeovers through stock acquisition. A poison pill is a section of a contract written by a team that makes the structure of a contract hard to handle in your cap if you decide to match an offer.

In the Seahawks/Vikings situation, Steve Hutchinson of the Seattle Seahawks, signed a 7-year $49 million dollar contract with the Minnesota Vikings. The Seahawks have the right to match the deal, and want to do so, but the Vikings have included a "poison pill" clause.

The clause stipulates that Hutchinson must be the highest paid offensive lineman on his team after the first year of the contract and that, if he isn't, the entire contract becomes guaranteed. The provision is a difficult one for the Seahawks, who have the right to match the Minnesota offer, because offensive tackle Walter Jones is the team's highest paid lineman and would be even if Hutchinson were on the Seattle roster.
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Old 03-26-2006, 11:56 AM   #3
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Default Re: Poison Pill in contracts

that being said..I have less of an issue with what the Vikings did...but the Seattle/Burleson thing had the stipulation that if Burleson played more than 5 games in the state of Minnesota..the entire contract would be guaranteed...this targets a team directly..where the hutchison clause targeted all teams in general
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Old 03-26-2006, 02:38 PM   #4
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Default Re: Poison Pill in contracts

Speaking of, me and my dad had an interesting argument over the weekend concerning lineman, particularly offensive lineman, vs. skill players concerning salaries.

He's an old lineman, and he states that it's impossible to overpay for a lineman, because he considers ALL offensive lineman underpaid to begin with.

The Shawn Alexander deal is a perfect example. Alexander is the second highest paid RB in the NFL behind LD, but he's only the third highest paid Seahawk behind Hasselback and Walter Jones.
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Old 03-26-2006, 03:03 PM   #5
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Default Re: Poison Pill in contracts

Have I missed something or have these crazy stipulations and clauses in these contracts (Hutchinson and Burleson) just started happening??
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Old 03-26-2006, 03:35 PM   #6
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Default Re: Poison Pill in contracts

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Have I missed something or have these crazy stipulations and clauses in these contracts (Hutchinson and Burleson) just started happening??
It seriously looks like they just started,because I don't remember them from years past.

The Burleson one was just payback for what the Vikes did with Hutch's deal.
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Old 03-26-2006, 04:15 PM   #7
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Default Re: Poison Pill in contracts

The NFL actually took up the case of the Seahawks against the Vikings regarding the Hutch contract. And lost. It will be interesting to see if they try to fight this Seahawk contract.

IMO, Paul Allen was pissed that he lost in a business transaction and he could be doing this Burleson contract more out of spite than anything else. I think he also wants to show where the Hutchinson arbitration ruling will lead and that maybe they need to ammend the CBA to get rid of this stuff.

I believe that a lack of guarenteed contracts is one of the reasons the NFL has such a consistantly good product. This trend is going to screw all that up.
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Old 03-26-2006, 04:36 PM   #8
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Default Re: Poison Pill in contracts

So basically... the Vikings and Seahawks could be destorying the NFL labor piece? Awesome.
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Old 03-26-2006, 07:09 PM   #9
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Default Re: Poison Pill in contracts

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So basically... the Vikings and Seahawks could be destorying the NFL labor piece? Awesome.
Don't forget the agents and the players they represent. And most importantly, the "Special Master" who declared that these type of contracts are acceptable...
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Old 03-26-2006, 09:17 PM   #10
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Default Re: Poison Pill in contracts

Thanks for the responses.
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