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Tuesday, March 18
Updated: March 20, 12:53 PM ET
NFL begins "performance based pay" system

By Len Pasquarelli

One day in the next week or two Randy McMichael will go to the mail box, sort through all of the junk he regularly receives, and discover an envelope with a Miami Dolphins return address on it.

And at that moment, the Dolphins second-year tight end will be more than $40,000 wealthier, compliments of the NFL's new "performance based pay" program. Instituted in partnership with the NFL Players Association, as a part of the 2002 extension to the collective bargaining agreement, the new system will soon reward players with checks ranging from just hundreds of dollars to payouts exceeding $40,000.

Count the excitable McMichael as among the top three beneficiaries.

Play for pay
According to documents obtained by ESPN.com, there are 26 players who earned $30,000 or more under the NFL's "performance based pay" program in 2002. Here are the top 10:
Player Team Bonus
OG Eric Heitmann S.F. $42,048
C Jason Ball S.D. $41,138
TE Randy McMichael Mia. $40,580
C Ben Hamilton Den. $38,296
CB Chris Cash Det. $38,119
SS Arturo Freeman Mia. $37,605
FS Marlon McCree Jac. $37,293
FS Shaunard Harts K.C. $35,956
OG Rich Seubert NYG $35,466
LB Scott Fujita K.C. $35,079

"To tell you the truth, it's kind of like 'found money,' because a lot of guys don't even realize it's coming," said McMichael, a fourth-round pick in the 2002 draft who earned a starting job, and will collect $40,580 because of the new program. "It's a good idea, though, since it seems to (reward) some of the guys who outplay their contracts."

The program isn't exactly a quantum leap toward the kind of "play for pay" paradigm some old-schoolers, having watched salaries spiral ever upward, are always advocating. Nor will it reverse a well-entrenched system where high-round draft choices are rewarded multi-million dollar signing bonuses before they ever take a training camp snap.

What the performance based pay program does, however, is create a fund which primarily supplements the salaries of those players earning minimum paychecks (or close to it), and whose playing time is disproportionate to their compensation. It is, for sure, one of the best ideas to emanate from the partnership the league and the NFLPA have forged.

It should be noted that, while the biggest beneficiaries are the lower-paid players, virtually everyone in the league is eligible for a piece of the pie. NFLPA executive director Gene Upshaw fought hard to ensure that even the wealthiest players in the league would derive some benefit.

So while the proletariat derives the most benefit, even a longtime veteran like Oakland quarterback Rich Gannon, the league's most valuable player in 2002, qualifies for a share of the pool, and earned $4,194 from the kitty. Falcons quarterback Mike Vick got $4,254 and quarterback Drew Bledsoe of the Buffalo Bills will receive $2,249.

For those players, of course, the additional funds are the equivalent of beer money. To guys like McMichael, and other players near the bottom of the payroll, the performance based pay is more cha-ching than chump change.

"Some players, quite honestly, might need the money just to get through the offseason," said Harold Henderson, the NFL executive vice president of labor relations. "And the money is going to get more significant the further out the program goes. Players are going to look forward to those checks in the offseason. When they know those checks are coming, maybe it makes a guy play a little harder in October, you know?"

The program will distribute $15.104 million, an average of $472,000 per team, this spring based on 2002 performances. The checks are scheduled to go into the mail shortly. The fund will grow to $32 million for the 2003 season and so will the individual payouts.

Players are eligible to receive the supplementary income if they participate in just one play. The additional income does not increase a player's cap charge, Henderson and Upshaw both emphasized, because the money is taken out of the leaguewide cap pool upfront.

Despite the educational efforts of union officials, there are many players who aren't fully aware of the program, and who will be pleasantly surprised when the checks arrive. For some players, like McMichael, the performance based pay bonuses will represent a pretty nice bounty.

And essentially, that is the design for the system, to augment the income of players near the bottom of the payroll but who earn significant playing time. McMichael, for instance, earned a $372,500 signing bonus in 2002 but his base salary was the rookie minimum of $225,000. Yet he participated in 66.8 percent of the snaps, far more than Dolphins officials envisioned when they chose him in the fourth round.

Perhaps an even better example of the benefits is San Francisco 49ers guard Eric Heitmann. A seventh-round draft choice, Heitmann's first NFL contract called for him to receive a signing bonus of just $28,500, along with a base salary of $225,000. When the 49ers were beset by injuries, Heitmann ended up starting 12 games and playing 57.6 percent of the snaps.

The result: According to documents obtained by ESPN.com, Heitmann is the big winner in terms of performance based pay, at $42,048.

Not surprisingly, the three highest-paid players under the program were all rookies in 2002. The player with the most league tenure among the top 10 beneficiaries was Miami safety Arturo Freeman, a three-year veteran who earned $37,605 in performance based pay in his first season as a starter.

"It's almost a given that, every year, every team in the league is going to have a couple guys (who outplay their contracts)," Upshaw acknowledged. "Sometimes those players spend years, maybe careers even, trying to catch up salary-wise. This is a way to reward those players. It's a very fair way to distribute the money."

In the example cited by the league, a player who earned $650,000 in 2002 and participated in 75 percent of the snaps, would derive about $30,000 from the performance based pay pool. A player who participated in a like number of plays, but had a salary of $6 million, would earn about $2,000.

The fund was created by slowing the annual increases in minimum base salaries for all players and by blunting increases in the rookie pool. In the past, those increases were typically in the 8- to 10-percent range. But the rookie pool -- the cap within a cap and, essentially, the maximum amount a team can spend on draft choices and undrafted college free agents -- was basically "flat" in 2002 and will be again in 2003. The jump in minimum base salaries is almost negligible.

The term "performance based pay" is probably a bit of a misnomer, since the new system is a function of playing time only, and does not account for a player's statistics. To have attempted to base such a system on numbers, though, would have been nearly impossible. And when a player is logging time on the field, after all, it generally reflects his contribution to the team.

This system, at least, compares apples to apples.

"When we looked at other ways to do it," said Henderson, "things just got too subjective. Is a fullback who carries the football 10 times a game more valuable than a fullback who gets just 10 carries a year? It might depend on the team he plays for and the system he plays in. This is very equitable."

Despite a lack of publicity, it moves the NFL a notable step closer toward equalizing the financial playing field, and yet another step beyond what is taking place in other sports leagues.

Len Pasquarelli is a senior NFL writer for ESPN.com.

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