Why would Fitz end up taking any discount if the Jets had zero leverage? Wouldn't that be evidence the Jets had plenty of leverage? I'd think no leverage would mean Fitz had a 3 year/$50M contract in his pocket.
The reality is both side have equal leverage. In any sort of negotiation, the more unequal the leverage, the quicker the other side caves. In this case, it's very even so neither side is giving in.
Yes Fitz has leverage because plan B for the Jets is not appealing. That's pretty clear. However, the Jets have leverage two ways. First, they are not competing with anyone for his services, thus they have the luxury of waiting him out. Second and more importantly, because there are no other starting QB jobs available, Fitz only wants to play for the Jets. Threats of retirement or signing as a backup out of spite are negotiating ploys. Fitz is desperate to lead a team to the playoffs as a starting QB.
So in summary, the Jets DO have a choice, just not a good one. Fitz doesn't, unless he's prepared to walk away from his career goals (which he would have done by now if he really didn't care). Unlike the team's, his decision is personal, not corporate which IMO make it much tougher on him to win the stare down contest.
As a Bills fan, I wish they'd pay him $20M, but I think the $12M number is about where it will end up.