HOUSTON -- The Houston Texans will forfeit their original fifth-round selection in the 2023 NFL draft and have been fined $175,000 for a salary cap reporting violation involving former quarterback Deshaun Watson, the NFL announced Thursday.
After a review, the NFL determined that the Texans provided Watson compensation in the form of a membership at an alternative athletic facility in 2020, early in the COVID-19 pandemic.
The Texans said they "absorbed $26,777 in costs for player benefits for the use of alternate athletic facilities." The team said it understands that amount "should have been charged instead to player salaries."
According to the collective bargaining agreement, teams must report any player compensation or benefit. The Texans believe the payment didn't provide any salary cap advantage and viewed it as an accounting error.
"The club has fully cooperated with the league in its investigation of these matters and maintains that it had no intention to circumvent any salary cap rules or gain any sort of competitive advantage," the Texans said in a statement. "While we disagree with the league's ruling, we will accept the imposed discipline and move forward."
The NFL originally had taken a fourth-round pick from the Texans and fined them $250,000, but those penalties were reduced on appeal, sources told ESPN's Adam Schefter.
After losing the fifth-round selection and then receiving a compensatory seventh-rounder later Thursday, the Texans now have 11 picks in this year's NFL draft, including the Nos. 2 and 12 selections they received as part of the trade that sent Watson to the Cleveland Browns in March 2022.
After that deal, the Browns signed Watson to a five-year, $230 million contract.
He was suspended for 11 games for violating the league's personal conduct policy by committing sexual assault, as defined by the NFL, on massage therapists. He was also fined $5 million and required to take part in the mandatory treatment program.
Watson was accused by more than two dozen women of sexual assault and other misconduct during massage sessions before he sat out the entire 2021 season. Over the summer, he agreed to settle 23 of the 24 lawsuits against him. Two lawsuits against him are outstanding, including one filed Oct. 13. Two other women filed criminal complaints against Watson but did not sue him.
ESPN's Jake Trotter contributed to this report.