The San Francisco 49ers wrap up their mandatory minicamp on Thursday, and it will be the third day without Vernon Davis. The team's slightly important tight end is looking to get a new contract, and is hoping to gain some leverage by skipping the camp. Davis will owe $69,455 in fines for his minicamp absence. If he skips any of training camp, he would face another $30,000 per day in fines. This covers the start of training camp through the final preseason roster reduction date.
Holdouts are nothing new, and Davis is the second one on the team along with right guard Alex Boone. What is different about this one is VD's deal with Fantex. Under the terms of the deal, Fantex has a claim to 10 percent of Davis's income. If he holds out into the 2014 season, Fantex can still claim 10 percent of each week's paycheck, even if Davis is forfeiting that money during his holdout. Davis's holdout could end at any point for a variety of reasons, but this is one of the more unique reasons. A player's annual base salary is based on weekly game checks. The 10 percent Fantex gets is based on those game checks, so this only becomes an issue if the holdout lasts into the season.
For those not aware, Vernon cut a deal with a company called Fantex in which people could "buy stock" in him. In reality you're buying a tracking stock, and you're not actually "owning" a part of Vernon. The details of Vernon's deal are broken down in a this prospectus, but here's a quick explanation. In this deal, Vernon received $4 million up front. In exchange, for the one-time payment of $4 million, Fantex is entitled to "receive 10% of brand income for Vernon Davis from and after October 30, 2013." Brand income means "gross monies or other consideration (including rights to make investments) that Vernon Davis receives as a result of his skills and brand, including salary and wages from being an athlete in the NFL and related fields (including activities in a non-NFL football league), such as broadcasting and coaching."
The most important point above is that Fantex gets 10 percent of brand income from and after October 30, 2013. On page 7 of the prospectus, it details what this means for his current contract. Previously I had thought the 10 percent only applied to his next contract and beyond. Instead, it counts certain money earned during his current deal. The money considered "brand income" includes base salaries and bonuses received from and after October 30, 2013. In 2013, that was $3.57 million of his $6.072 million base salary. For 2014, that is $4.7 million. For 2015, that is $4.35 million. Additionally, it covers up to $1.4 million in bonus money.
Fantex has said it will claim the money owed if Vernon's holdout goes into the regular season. Davis forfeited a $200,000 workout bonus by skipping the offseason workout program, but Fantex will not claim brand income since the bonus was never earned. I also asked if Fantex had any discussion with Vernon about his holdout plans, and basically how involved they were in this. Their CEO responded, "Vernon Davis owns 90% of his earnings from the NFL. He has an experienced contract agent, and they make contract related decisions."
Anything is possible with a holdout, but it seems difficult to see this holdout lasting into the season. I won't say it won't, but I'd be a bit surprised if it did. Davis has the $4 million up front, so that does cover training camp fines, but with the payments he'll be making on salary he's not earning, it just doesn't seem like the idea situation for Vernon. I would be surprised if the 49ers gave him a new deal this offseason, but maybe they convince him they'll give him a little something next year. And even that might not happen. It's just an overall odd situation. I'm fine with Vernon wanting to get some more money, but all the issues surrounding this leave me a little confused about his grand plan.