We mentioned last week that the NFL Players Association has filed a “special master” proceeding under the Collective Bargaining Agreement regarding the handling of guaranteed payments to be made in 2010 and beyond, which currently aren’t scheduled to be limited by a salary cap.
The matter is still pending, and some teams and agents are waiting for the outcome before doing any first-round or second-round deals.
The issue, as we understand it, comes down to the practice of guaranteeing playing-time bonuses with base salaries in future years. In many cases, the contract guarantees the full base salary in a future year, and the guarantee disappears once the player secures the incentive payment based on participating in a specific percentage of plays.
The problem is that, if a player’s salary is fully guaranteed in 2010 but not fully guaranteed in 2009 (the last year with a salary cap, under the current CBA), the guaranteed payment in 2010 needs to be reallocated to the remaining capped years, 2008 and 2009. But this reallocation also counts against the first-year rookie pool, and the rule that limits the player’s pay in his second year to 125 percent of his rookie cap number.
In English, there’s no way to fully guarantee the future year’s salary without screwing up the player’s compensation in the first two years of the deal.
We’re told that the device is more common in round two, with the fourth-year salary being fully guaranteed until the playing-time bonus is reached. In that case, the reallocation to 2008 and/or 2009 can be avoided only if the salary is fully guaranteed in both 2009 and 2010, per the CBA.
Though the NFLPA advised agents representing first-round and second-round players to wait until the issue is resolved before signing contracts, Redskins receiver Malcolm Kelly inked a deal that includes a fourth-year salary that is guaranteed for injury only.
The risk for this and other similar contracts is that, if the player doesn’t achieve the minimum playing-time trigger for payment of the one-time incentive amount and if the player otherwise stinks, the team can cut the player prior to 2011, and avoid any responsibility for his salary.
The player in that case would have no recourse (except maybe against his agent), since the payment wasn’t “fully guaranteed,” and thus not subject to the requirement that the 2011 salary be reflected on the books in 2008 and 2009.
[Editor’s note:We realize that many of our readers are bored to tears by topics of this nature, but we need to periodically bolster our “street cred” in league circles. Without resorting to flashing gang signs.]
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July 16th, 2008 at 1:46 pm
You mean you have nothing negative to say about Brett Favre in this article. What a shocker!
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July 16th, 2008 at 1:47 pm
I think most of us would much rather be bored to tears by this story as opposed to another one about Favre.
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July 16th, 2008 at 2:18 pm
Your editors note is too funny.
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July 16th, 2008 at 2:24 pm
so you admit sucking up to the league??
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July 17th, 2008 at 12:17 am
Personally I enjoy reading these types of articles, much more so than 523852987 oped pieces about the same crap (Favre, Pacman, Vick, etc).
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July 17th, 2008 at 12:53 am
Disclaimers for noting the only thing you do right isn’t a bad thing.
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July 17th, 2008 at 3:11 pm
Are you kidding? These articles are a big part of what separates this site from not only the other news-gathering-rehashing sites, but even the big ones like ESPN & SI. Keep up the good work.
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