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Monday, May 27 Signing bonuses boost guaranteed money By Len Pasquarelli ESPN.com |
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In the area of guaranteed contracts, NFL players still trail their counterparts in other professional sports, but have made substantial gains since the current salary cap system was implemented in 1993. According to an NFL Players Association document titled "A New Look at Guaranteed Contracts in the NFL," and obtained by ESPN.com, nearly half of the money earned by players in each of the last four seasons constituted guaranteed compensation. That is a marked increase from pre-1993 levels, when only about 20 percent of the compensation to players was guaranteed.
In 1992, the year before the current system went into effect, just 15 percent of the league salaries (base salary and bonuses) were guaranteed. Over each of the past six seasons, the guaranteed compensation to players had been between 41-51 percent. It peaked in 2000, at 51 percent, and then dropped slightly to 47 percent for 2001. "By far the most important shift is in the role of signing bonuses," reads the report, which was recently disseminated to player agents by way of the NFLPA web site. "That is only natural, because signing bonus money remains the largest share of guaranteed dollars." Since 1993, NFL players have been awarded signing bonuses totaling $8.5 billion. In the ensuing period the number of signing bonuses has more than doubled and average value of the upfront money paid to players has increased by 440 percent, to $679,934. But beyond signing bonus compensation, NFL players have also made quantum gains in landing guaranteed base salaries, a perquisite that other professional athletes, particularly those in baseball and basketball, already enjoyed. "Given a viable market for their services (since 1993)," the NFLPA study reports, "many more players have been able to get guarantees into their contracts." Between 1982-1992, before the current collective bargaining agreement was negotiated, only 11 players in the league had any of their base salaries guaranteed. The total value of the guarantees was $22.3 million. Starting with the 1995 season the average number of players with at least a portion of their base salary guaranteed, and the average value of those guarantees, has exceeded the total guarantees for the previous 11 years. From 1995-2002, the average number of players with guaranteed base salary is about 40, and the guaranteed salary has averaged $27 million per season. The gains are even more substantial when so-called "explicit" guarantees are factored into the equation. When owners invest signing bonuses of $2 million or more in players, they essentially create an environment in which they cannot afford to release the players for two or three seasons, because of the salary cap consequences. So while those players may not have implicit guarantees for their base salaries, the reluctance of owners to absorb salary cap damage creates "explicit" guarantees. Since '93 there have been 467 contracts which included signing bonuses of $2 million or more and the total outlay exceeds $1.8 billion. Those 467 players remained on the roster an average of nearly three seasons because of "explicit" guarantees. "So, in essence, a signing bonus of $2 million and higher also means there is a high probability of gaining ... what might easily be termed a guaranteed three-year contract," the study pointed out.
Len Pasquarelli is a senior writer for ESPN.com. |
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