2012 RULES: Guaranteed Money Feedback

[Goodell]

This post on LB Ahmad Brooks's recent 6-year, $44.5 million contract with $17.5 million guaranteed ($7.5 SB) might give some additional insight into guaranteed money in the NFL today:
http://profootballtalk.nbcsports.com/20 ... n-signing/

I need to find some good resources talking about that more and the salary cap impact of a partially guaranteed contract.

I was kind of thinking the way to add it to our league would be giving that an option on the free agency bidding to enter a percentage of guaranteed money as well as how long a team would guarantee that.

Ex. I bid 5-years and $1M a year with 1M SB, and will also guarantee 50% of the salary for 3 years.

Based upon feedback we'll probably do the full year salary guaranteed for vets after week 1 so the partial guarantee would mostly come into play if the player was cut with some guaranteed salary left. If cut after 1 year in the example above, the player would still have 2 years partially guaranteed (in addition to the rest of the prorated SB left for cap hit). I'm not sure if we'd lump the rest of the partial guaranteed salary into his lump of SB left and apply it the usual way (either all this year or split over 2) or have the team pay 50% of the salary on their books for all of the remaining years. I'd like to find more on that if some interest in moving toward guaranteed money beyond SB. Also don't want to make it too complex, but this could also give us better FA bidding and more consequences for bad bids.

A Leigh Steinberg article last year talked about more guarantees and partial guarantees coming into the NFL. http://blog.steinbergsports.com/post/87 ... n-analysis

Also don't want to make it ovely complex either. But open to all feedback on these. We'll probably try to zero in poll question specifics sometime this week.

[Ulrich82]

I am still not a fan of this as it is largely covered by signing and roster bonuses.

If you look at the Ahmad Brooks contract details, essentially what he has is a bunch of roster bonuses that activate on Apr 1 of each year. Otherwise, the contract is generally guaranteed against injury, but the team can cut him any time for performance. Here is the contract:

SB: 7.5 million
2012:
$750,000 base salary fully guaranteed (you wouldn't cut him before year 1 anyway)
$500,000 salary paid out per game as an active roster bonus (not owed if inactive)
$100,000 workout bonus (we should just fold this into base salary)
2013:
$4.3 million guaranteed against injury. Becomes fully guaranteed on Apr 1 2013 if still on roster (aka roster bonus)
Various escalators and de-escalators depending on performance (up to +$500,000/-$2.5mil)
$750,000 salary paid out per game as an active roster bonus
$100,000 workout bonus
2014:
$5.25 mil base salary
-4.95 mil of that is guaranteed against injury
-4.95 also becomes fully guaranteed as of Apr 1 2014 (another roster bonus)
More escalators/de-escalators
$750,000 salary per game as an active roster bonus
$100,000 workout bonus
etc.

As the post sums up, it is a 1 year deal with 8.25 mil guaranteed mainly in the form of the signing bonus. From there, the team can move on any time before Apr 1 with no money owed but the money is still "guaranteed" in the form of annual roster bonuses. There is also $9 million in injury guarantees over the life of the deal, but if Brooks is cut next year, these go away.

Why should we introduce extra complication when our current tools can emulate this? So the roster bonus here becomes due on Apr 1 not Jun 1(or whatever date we use). The major difference is whether or not we guarantee money against injury. Even the Steinberg article you linked mainly talks about guarantees for injury. I think injury guarantees are more important as insurance for real players than our players. Career ending injuries just are not that common.

[Goodell]

Good points. I'm not sure enough about all the exact details myself and definitely looking for more discussion and great links into that complicated subject. It would be reassuring to have a stronger understanding about how those details all work, make any adjustments (if any) to the overall contract structures, and then be pretty confident that we have it right going forward. I want to put a lot of our rules into a stronger document this off-season so want to take a closer look at some of these things now.

From when I entered the first set of player contracts to now when we mostly are looking at new draft contracts and trying to keep up somewhat with reality's changes, it seems the figure reported for guaranteed money and the signing bonus seem increasingly different.

I'd love to find more articles like these that get into the nitty-gritty of these deals and see what those guaranteed figures really mean. It doesn't seem too guaranteed to me if the player can be cut and not get those funds classified as guaranteed down the road, but maybe it's all just different definitions used than I'd be thinking. Some of the injury-related rules mentioned might be more than we'd want to include if more of a real player benefit bargained for than something to focus on for team-building.

It's easier to keep it simple and not change scripts, etc. But I'd feel much better about our setup in general the more and more we can de-mystify these contract elements. If we get enough interest to add another league sometime, when we have to collect all the current contracts for that I also want to make sure we'd be entering those in realistically from the start. Whatever changes (if any) would be good to also have that part of any new FA bids and new draft contracts.

But may not need to be any or much change needed. It's something I'd like to find more resources and definitive answers about if possible. Love the detailed post, thanks!

[Ulrich82]

Figuring out what guaranteed really means is getting tough. Agents like to give big guaranteed numbers because it makes them look good, and teams are happy to oblige because it keeps the agents happy. The true guarantee is often less than announced since injury guarantees mean very little. Not only can a player be cut for performance but a team can cut a player simply due to cap problems and not pay him money if it is only guaranteed for injury. ProFootballTalk.com often posts the true contract numbers once they get them, but the contracts are not always public.

Our system doesn't match the NFL perfectly (for example, there are a lot of contracts with 1 time roster bonuses, like Peyton's $28 million or the money Kolb just got. These are not annual roster bonuses like ours). However, it works with a consistent set of rules and approximates NFL signings. Since our FAs don't have free will, we need a simple system in which the value of a contract can be obviously determined.

The recent contracts by Tampa are a good example of guaranteed money in contracts. Tampa wanted to sign salary cap friendly contracts and they want to avoid the cash hit of a large signing bonus). What they do instead is sign a 5 year contract with high base salaries and fully guarantee the base salary of the first two years (with the base salaries being highest in the first two years). This is different than a signing bonus because the SB cap hit is spread over all 5 years of the contract. With these deals, Tampa could cut the player after 2 years and have no remaining cap hit.
SIDE NOTE: this also might be more friendly to the new spending floor as I understand it. In the NFL, the new CBA says teams have to spend a minimum amount of cash each year (not use a minimum amount of cap space). As I understand, a signing bonus counts as a cash spend in the year it is given, but does not count towards the floor in future years. By having no signing bonus and a high base salary, each year of the contract will count more toward the spending floor.

You mentioned possibly introducing an option to guarantee a percentage of a contract when signing a FA. I don't see this as being very different than our current system. Take the following two contracts:
Option A: 5 years, 5 million per year, 20% guaranteed through the life of the contract
Option B: 5 years, 4 million per year + $5 million signing bonus.
Both contracts carry a cap hit of 5 million per year. Also, in both cases, cutting the player leads to the same amount of guaranteed money remaining. In option B, the remaining bonus money becomes an instant cap hit. In option A, it is not clear to me what happens. Its possible that the player counts $1 million per year against the cap for the life of the contract, but I believe I've read that the guaranteed money accelerates to the current cap year (identical to option B).

I'm still against guaranteed contract terms since I worry about how they will work in FA signings. For example, in the current system, to sign a FA, you have to improve on the current offer. But what if a player has a deal on the table with high signing bonus, but I'd rather offer him a deal worth more money but with lower signing bonus and higher guaranteed base salary. We have no way to do that. However, if we really want to introduce guaranteed base salaries, I think a better way to do it is to specify how many years of the deal you are willing to guarantee. In that way, the guaranteed money would have a different cap structure than a signing bonus (assuming guaranteed base salaries don't accelerate to the current season when a player is cut).

[Goodell]

Great post. Thanks. I'm thinking we are going to see more and more of those TB deals like you mentioned with guaranteed salary different from the signing bonus and would like us to try to incorporate more realism in the contracts if they increasingly go that way. At this stage, though, thinking it's just something to keep researching and discussing for the future. It would impact free agency bidding and time's running short for a massive adjustment to that.

We might take a look at it again when we enter draft pick contracts which we try to adjust each year to more closely match what's happening with the real draft picks, but more likely something for next year's off-season discussions. Finding more article going into the details of contracts and posts like yours will be helpful in everyone understanding the details more.

Thanks!