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Strategies & Market Trends : IPO and Other Stock Plays

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From: david7775/4/2005 10:14:26 AM
   of 13331
 
OT/WINSLOW TO LOSE MORE THAN $9 MILLION?

Setting aside for now the question of whether Browns tight end "Evel Kellenievel" Winslow should have been riding a motorcycle as he still rehabs from a broken leg that scuttled his 2004 rookie season (and prevented him from earning a big-money bonus payment by failing to participate in 30 percent of the team's offensive snaps), we've gotten a look-see at Winslow's contract, which indicates that he shouldn't have been riding a motorcycle at all. Ever. Period.

As a general matter, Winslow has breached Paragraph 3 of his contract, which prevents him from "engag[ing] in any activity other than football which may involve a significant risk of personal injury."

And this breach could have significant consequences. Winslow's motorcycling allows the team (if it so chooses) to recover $5 million of his initial signing bonus and the full $4.4125 million of his option bonus triggered at the outset of the 2005 league year, $2.4125 million of which won't actually be paid to Winslow until July 15.

So the total potential price tag on Winslow's deliberate failure to comply with the terms of his contract is a whopping $9.4125 million.

Under the contract, Winslow becomes potentially responsible to pay back the bonus money due to "injury as a result of a breach of Paragraph 3 of the Contract" or "as a result of participation in hazardous activities which involve a significant risk of personal injury and are non-football in nature, including but not limited to skydiving, hang gliding, mountain climbing, auto racing, motorcycling, scuba diving, or skiing." (Emphasis added.)

The bottom line is that, under the terms of Winslow's deal, getting injured while motorcycling is no different that walking away from his contractual obligations, a la Ricky Williams did nearly a year ago.

In either case, the club can recover bonus money.

And in Winslow's case, he could end up forking over more than $9 million.

The bigger question is whether the Browns should make a grab for Winslow's $9 million. Since the guy that drafted Winslow is long gone and given that we can't imagine Winslow and 2005 first-round pick Braylon Edwards co-existing in the same conference much less in the same locker room, we think the Browns should send Winslow a bill for $9.4125 million, and then let nature take its course.

If nothing else, such a move could help the Browns recoup a major chunk of Butch Davis' buyout.
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