In 2019, the NFL League Year begins at 4 p.m. ET on March
13. The 2019 salary cap is set at $188.2 million.
Teams are allowed to negotiate with the agents of upcoming
unrestricted free agents from March 11-13 (until 4 p.m. ET). Self-represented
players are not allowed to participate in this window prior to the new League
Year.
At 4 p.m. ET on March 13: All 2018 contracts expire, the
trading period opens and restricted free agent tenders must be submitted, etc.
This is when free agents can officially sign new contracts, and trades
(e.g., Joe Flacco to
Denver, Case Keenum to
Washington) can become official.
The NFL's Collective Bargaining Agreement (CBA) is a thick,
316-page legal document. If you feel like reading the CBA itself, you can get a
copy by clicking here. If you understandably don't want to take on
this task, I underlined some of the most important terms in NFL free agency and
contracts.
Below is a glossary of free-agent terms that range from
free-agent designations and franchise tags to contract language and rookie
deals. This is followed by an explanation of a player's cap hit in a given
season, as well as an introduction (to some) to adjusted annual value -- a
metric to compare contracts that were signed in different years (and financial
landscapes).
*Player contract information from Over The Cap and Spotrac.
UNRESTRICTED FREE AGENT (UFA): Any player with
four or more accrued seasons and an expired contract; free to negotiate and
sign with any team.
RESTRICTED FREE AGENT (RFA): A player with three
accrued seasons and an expired contract. RFAs are free to negotiate and sign
with any team, but their original team can offer them one of various qualifying
offers ("tenders") that come with the Right of First Refusal and/or
draft-pick compensation. These amounts change by a minimum of 5 percent and a
maximum of 10 percent (based on the salary cap) each League Year. Teams must
submit these tenders before 4 p.m. ET on March 13. Tenders are classified as
follows (tender amounts from Over The Cap):
FIRST-ROUND TENDER: One-year contract worth the
greater of (a) $4.407 million or (b) 110 percent of the player's prior-year
base salary. If the player's original team decides not to match an offer sheet
signed with another team, it is entitled to a first-round draft pick from his
new team.
SECOND-ROUND TENDER: One-year contract worth the
greater of (a) $3.095 million or (b) 110 percent of the player's prior-year
base salary. Draft-choice compensation: second-round pick.
ORIGINAL-ROUND TENDER: One-year contract worth
the greater of (a) $2.025 million or (b) 110 percent of the player's prior-year
base salary. Draft-choice compensation: a pick in the round the player was
originally drafted in.
RIGHT-OF-FIRST-REFUSAL TENDER: One-year contract
worth the greater of (a) $2.025 million or (b) 110 percent of the player's
prior-year base salary. Team has the right to match any offer sheet signed with
another team, but there is no draft compensation tied to this tender.
NOTABLE RESTRICTED FREE AGENTS IN 2019: Geronimo
Allison, Robby
Anderson, Peyton Barber, Corey Coleman, Alex Collins, George Fant, Shelby Harris, Cory
Littleton, Brian Poole.
EXCLUSIVE RIGHTS FREE AGENT (ERFA): Any player
with fewer than three accrued seasons and an expired contract. If his original
team offers him a one-year contract and the league minimum (based on his
credited seasons), the player cannot negotiate with other teams.
NOTABLE EXCLUSIVE RIGHTS FREE AGENTS IN 2019: J.D. McKissic, Alex Redmond, Matt Skura.
ACCRUED SEASONS: Used to determine a player's
free agency status (unrestricted, restricted, exclusive rights). In order to
accrue a season, a player must have been on (or should have been on) full-play
status for at least six regular-season games in a given season. A player under
contract must report to his team at least 30 days prior to the start of the
regular season to accrue a season.
CREDITED SEASONS: Used as a measure for many
benefits, its most notably used to determine a player's minimum salary. To earn
a credited season, a player must be on full-pay status for a total of three or
more regular season games.
Minimum salaries
in 2019 based on Credited Seasons (CS):
• 0 CS: $495,000
• 1 CS: $570,000
• 2 CS: $645,000
• 3 CS: $720,000
• 4-6 CS: $805,000
• 7-9 CS: $930,000
• 10+ CS: $1,300,000#NFLCBA
FRANCHISE TAGS
Each team can apply a franchise or transition tender
("tag") to one player scheduled to become a free agent, which
prevents the player from hitting the open market.
Teams can use this designation from the 22nd day preceding
until 4 p.m. ET on the eighth day preceding the new League Year. The window
this season ran from February 19 to March 5.
Each of the different tags (non-exclusive, exclusive,
transition) can be withdrawn by the team at any time before the player signs
it. However, the tenders are guaranteed for skill, cap and injury once signed.
A player must sign his tender to be traded to another team.
Teams and franchise players can sign multi-year extensions
until July 15. If there is no extension in place by that date, the team and
player can only agree to a one-year contract for the current season.
A designated player must sign his tender prior to the
Tuesday following Week 10 in order to remain eligible to play in the current
season.
NON-EXCLUSIVE FRANCHISE TAG: A player who
receives the non-exclusive franchise tag is free to negotiate with other teams.
The player receives a one-year deal with a salary set at the greater of (a) the
cap percentage average for his position (the sum of the franchise tag figures
at a player's position over the previous five seasons divided by the sum of the
salary caps over the previous five seasons) OR (b) 120 percent
of his prior-year salary (the player's cap number from the previous season,
minus any performance incentives).
Teams that use the non-exclusive franchise tag hold the
right of first refusal. If a designated player signs an offer sheet with
another team, the player's previous team has five days to match the offer
sheet. Should it decide not to, the player's original team shall be entitled to
draft-choice compensation equivalent to two first-round picks.
PLAYERS WHO
RECEIVED A NON-EXCLUSIVE FRANCHISE TAG IN 2019: Frank Clark (Seahawks), Jadeveon
Clowney (Texans), Dee Ford (Chiefs), Robbie Gould (49ers), Grady Jarrett (Falcons), DeMarcus
Lawrence (Cowboys).
2019 NON-EXCLUSIVE FRANCHISETAG:
• QB: $24.865 million
• RB: $11.214 million
• WR: $16.787 million
• TE: $10.387 million
• OL: $14.067 million
• DE: $17.128 million
• DT: $15.209 million
• LB: $15.443 million
• CB: $16.022 million
• S: $11.15 million
• K/P: $4.971M
EXCLUSIVE FRANCHISE TAG: A player who receives
the exclusive franchise tag cannot negotiate with other teams. The player
receives a one-year deal for the greater of: (a) the average of the five-largest
salaries at his position at the conclusion of the restricted free agent signing
period of the current league year OR(b) the amount of the
non-exclusive franchise tag.
Last player to receive an exclusive franchise tag: Le'Veon Bell (with
the Steelers in
2018).
TRANSITION TAG: A player who receives the
transition tag is free to negotiate with other teams. The player receives a
one-year deal for the greater of: (a) the cap percentage average of the top 10
greatest prior-year salaries at the player's position OR (b)
120 percent of his own prior-year salary. Should such a player sign an offer
sheet with a new team, his former team has five days to match the offer sheet.
However, should his former team decide not to match, there is no draft-pick
compensation tied to the transition tag.
Last player to receive transition tag: Kyle Fuller (with
the Bears in
2018).
2019 TRANSITIONTAG SALARIES
• QB: $22.783 million
• RB: $9.099 million
• WR: $14.794 million
• TE: $8.815 million
• OL: $12.866 million
• DE: $14.360 million
• DT: $12.378 million
• LB: $13.222 million
• CB: $13.703 million
• S: $9.531 million
• K/P: $4.537 million
MULTIPLE FRANCHISE TAGS: When a player receives
the franchise tag for a second time, he will receive a 120 percent increase of
his previous franchise-tag salary. If a team places the franchise tag on a
player for a third time, the player will receive the greater of: (a) the
quarterback tag, (b) 120 percent of the average of the top five prior-year
salaries at his position or (c) 144 percent of his second franchise-tag salary.
Example: DeMarcus
Lawrence received the franchise tag from the Cowboys in
2018 and earned $17.143 million. The franchise tag for defensive ends in 2019
is $17.128 million, but Lawrence will earn $20.5716 million (120 percent of his
2018 salary) because this is his second franchise tag.
CONTRACT LANGUAGE
GUARANTEED MONEY: Media outlets typically
announce and talk about the "guaranteed money" in a player's
contract. However, much of this money is only partially guaranteed.
Compensation in NFL contracts can be guaranteed for three purposes: skill, cap
and/or injury.
Compensation in a player contract can be guaranteed for one,
two, all or none of the guarantees (subject to some rules). If money in a
player contract is protected for skill, cap AND injury, that
money is fully guaranteed at signing and will be paid to the player. If money
is only guaranteed for one or two of the three protections, that money is only
partially guaranteed.
Here is a quick breakdown of each guarantee category:
SKILL GUARANTEE: If a player contract is
terminated because, in the team's opinion, he does not have the requisite skill
(due to a loss or lack of skills comparable to others on the team at his
position), the player will be entitled to any money that is protected by a
skill guarantee.
CAP GUARANTEE: If a player contract is
terminated so that a team can get under the salary cap, sign a free agent or
re-sign one of its current players, the player is entitled to any money that is
protected by a cap guarantee.
INJURY GUARANTEE: If a player is released but is
currently unable to perform football duties (i.e., doesn't pass a physical) as
a result of team activities, the player is entitled to any money in his
contract protected against injury. An injury-only guarantee is the most common
in terms of partially guaranteed money.
FULL GUARANTEES (GUARANTEED AT SIGNING): Money is
fully guaranteed at signing if it is guaranteed for skill, cap and injury
purposes. Kirk Cousins'
three-year, $84 million contract with the Vikings is guaranteed
for skill, cap and injury.
MOST FULLY GUARANTEED MONEY: Matt Ryan ($94.5 million
with the Falcons).
BASE SALARY: Formally known as "Paragraph
5" salary due to its place in an NFL player contract, it is the
compensation a player receives during the regular season. The collective
bargaining agreement set league minimums for base salaries. A player's
"game check" is 1/17th of his base salary. When a player is suspended
for a game, he forfeits 1/17th of his base salary.
2019 LARGEST BASE SALARY: Kirk Cousins ($27.5
million with the Vikings).
SINGING BONUS: Money earned by a player for
signing his contract. Typically paid out within the first 12-18 months.
Prorated against the salary cap for the life of the contract (five-season
maximum). This is how the Lions could
afford to give Matthew Stafford a
$50 million signing bonus in 2017. For cap purposes, Stafford's signing bonus
counted for $10 million against the Lions'
salary cap for each of the next five seasons.
LARGEST SIGNING BONUS IN CONTRACT: Aaron Rodgers ($57.5
million with the Packers).
ROSTER BONUS: Compensation earned by remaining
on a team's roster on a certain date. Roster bonuses count in full against the
salary cap in the season in which they are earned, unless fully guaranteed at
signing. They are used to avoid signing-bonus proration and pushing dead money
into the future.
Example: Antonio Brown has a $2.5
million roster bonus due March 17. The Steelers want
to trade him before that date to avoid paying the bonus to Brown.
LARGEST ROSTER
BONUS IN 2019: Aaron Rodgers ($13.4
million with the Packers).
PER-GAME ROSTER BONUS: A roster bonus awarded on
a per-game basis for being on the team's 46- or 53-man roster (this varies by
contract). For example, a player with a $1.6 million per-game roster bonus for
being on the 46-man roster would earn $100,000 for each game he is active.
EXAMPLE: Richard
Sherman has a $2 million per-game roster bonus with the 49ers,
so he earns $125,000 for each game he is active.
OPTION BONUS: Gives a team (or, at times, a
player) the ability to exercise the current or future years of the contract by
paying a bonus. Prorated over the life of the contract (up to five seasons).
LARGEST OPTION
BONUS IN 2019: Brandin Cooks ($17
million with the Rams,
becomes guaranteed on March 15).
WORKOUT BONUS: Compensation for attending an
agreed-upon percentage of the offseason workouts.
LARGEST WORKOUT
BONUS IN 2019: Dontari Poe ($900,000
with the Panthers).
REPORTING BONUS: Earned by reporting to team activities
by a specified date.
EXAMPLE: Darrelle
Revis had a $1 million reporting bonus in his 2010 contract with the Jets,
as the team sought to avoid further training camp holdouts.
INCENTIVES (LTBE/NLTBE): Incentives in a player
contract are limited to the list provided in Exhibits A-C in Article 13 Section
6 of the NFL's collective bargaining agreement.
Player incentives are considered "likely to be
earned" (LTBE) or "not likely to be earned" (NLTBE) based on the
player or team's prior-year performance. For example, if a player has a
$500,000 incentive for accumulating 10 sacks in the upcoming season and he had
10 sacks the previous season, the incentive is considered LTBE. If he did not
record 10 sacks in the previous season, the incentive is considered NLTBE.
Except in certain circumstances, LTBE incentives count against the team's
salary cap in the current season, and NLTBE incentives do not count against a
team's current year's cap. Except in rare cases, unearned LTBE incentives are
credited to the following season's salary cap, while earned NLTBE incentives
are charged against the following season's salary cap.
EXAMPLE: Eagles TE Zach Ertz earns
$100,000 each season he makes the Pro Bowl.
He missed the Pro Bowl in
2016, so his incentive was NLTBE in 2017. Ertz has made the Pro Bowl in each of the last two
seasons, so the incentive was LTBE in 2018 and will be again in 2019.
SALARY ESCALATORS: A salary escalator is similar
to an incentive in that it is triggered by attaining certain performance
thresholds. However, the extra money is not always guaranteed to be received.
An earned escalator translates into a raise in a future year
of the contract. If the escalator applies to a non-guaranteed season and the
player is released prior to it, he would not receive the benefit of his
escalator. Contracts can also contain de-escalators that lower a player's
salary for failing to reach performance measures.
EXAMPLE: Keenan Allen earned
a $2 million salary escalator in 2018 for recording 90-plus receptions and
having the Chargers make
the playoffs. His 2019 base salary increased from $8 million to $10 million.
DEAD MONEY: Refers to salary a team has already
paid or has committed to paying (i.e., a signing bonus, fully guaranteed base
salaries, earned bonuses, etc.) but has not been charged against the salary
cap.
In business terms, it is essentially a "sunk
cost." Any money a team pays a player must be accounted for against the
salary cap. If there is dead money in a player's contract and he is released or
retires, that charge will accelerate onto the team's salary cap for the current
year.
There is one avenue to lower this cap hit in a current
season: the June 1 designation. Teams can spread the cap hit over two seasons
by releasing or trading a player after June 1. Teams are allowed to release two
players prior to June 1 while still using this designation and getting the same
cap treatment. However, the cap savings created by a June 1 designation do not
take effect until after June 1.
Essentially, the salary cap is like a credit card, minus the
interest. Anything that is paid out to a player must be paid back to (and
accounted for against) the salary cap at some point.
GUARANTEED MONEY, DEAD MONEY AND CAP SAVINGS
EXAMPLE: Odell Beckham Jr.
Contract (Total value: 5 years, $90.0 million)
- GUARANTEED MONEY: $65.0 million.
- FULLY GUARANTEED MONEY: $40.959
million.
- SIGNING BONUS: $20 million ($4.0
million in cap space for first five seasons).
- 2018: $5.459M
cap hit - $40.959M in dead money = -$35.0M in cap savings.
- 2019: $21.0M cap hit - $35.5M in
dead money = -$14.5M in cap savings.
- 2020: $18.25M cap hit - $14.75M in
dead money = +$3.5M in cap savings.
- 2021: $19.75M cap hit - $8.0M in
dead money = +$11.75M in cap savings.
- 2022: $19.0M cap hit - $4.0M in
dead money = +$15.0M in cap savings.
- 2023: $15.0M cap hit - $0.0M in
dead money = +$15.0M in cap savings.
> CAP SAVINGS:
pre-June 1 release.
ODELL BECKHAM GUARANTEES
BY YEAR
- Signing Bonus: $20M
- 2018: $1.459M base salary.
- 2019: $16.75M base salary.
- 2020: $2.75M of $14.0M base
salary.
FULL GUARANTEE TOTAL: $40.959M.
Remaining Partial Guarantees (Injury Only).
- 2020: remaining $11.25M of 2020
base (fully guaranteed third day of 2020 League Year).
- 2021: $12.791M of 2021 $14.5M base
(fully guaranteed third day of 2021 League Year).
TOTAL PARTIAL GUARANTEES: $24.041M.
TOTAL GUARANTEES:
$65.0M
ROOKIE CONTRACTS
LENGTH: Contracts for drafted rookies are set at
four years. Undrafted rookies receive three-year contracts.
FIFTH-YEAR OPTION: Each player selected in the
first round of the NFL draft has a team option for a fifth season automatically
included in his contract, which extends the four-year rookie contract to a
fifth season.
The salary for the fifth-year option is broken into
two-tiers. The top 10 picks of the draft receive an average of the top 10
prior-year salaries at his position. Picks 11-32 receive the average of the
3rd-25th prior-year salaries at his position.
Teams must exercise this option in the time after the
conclusion of the player's third regular season and prior to May 3 of the
following League Year. When exercised, the option is guaranteed for injury
only. If the player remains on the roster at the start of the League Year of
his option season, it becomes fully guaranteed (skill, cap and injury).
EXAMPLES:
- AMARI COOPER (FOURTH
OVERALL IN 2015 DRAFT): $13.924 million in 2019.
- NELSON
AGHOLOR (20TH OVERALL IN 2015 DRAFT): $9.387 million in 2019.
ROOKIE SALARY: A player's rookie salary is
composed of the following: signing bonus, base salary, offseason workout per
diem (beginning in the second season), base-salary guarantees, permitted
performance incentives, roster bonuses and reporting bonuses.
PROVEN PERFORMANCE ESCALATOR (PPE): This is
intended to reward late-round draft picks for contributions that exceed the
expectations of their draft status.
Players drafted in the third through seventh rounds are
eligible to receive the PPE. Those selected in the first and second rounds, as
well as undrafted players, are not eligible for the PPE.
A player can earn an increase to his fourth-year base salary
by playing 35 percent of his team's offensive or defensive snaps in either (a)
two of his first three seasons or (b) a cumulative average over his first three
seasons.
Players' fourth-year base salaries are raised to the amount
of the Right of First Refusal Tender ($2.025 million in 2019).
NOTABLE PLAYERS WHO EARNED THE PPE IN 2019: Kenyan Drake (Dolphins), Tyreek Hill (Chiefs), Jordan Howard (Bears), Yannick
Ngakoue (Jaguars), Dak Prescott (Cowboys), Kevin Byard (Titans).
PERFORMANCE INCENTIVES: While veterans can agree
to various incentives, rookie incentives are based on playing an agreed-upon
amount of a team's offensive or defensive plays. All incentives are considered
Likely To Be Earned (LTBE).
Rookie performance incentives rules differ by the round a
player was drafted in. For first- and second-round picks, the minimum amount of
playtime a player can be rewarded for is set at 35 percent in the initial
contract year and 45 percent in any other year of the deal.
For players drafted in the third round and later, along with
players who go undrafted, the minimum playtime incentive is set at 15 percent
for the first year and 30 percent for any subsequent years.
These incentives can't be guaranteed for skill, injury or
cap and can only be based on playtime in the current League Year. Earning or
failing to earn an incentive cannot modify, nullify or create another incentive
clause. Unearned incentives cannot be carried over into future seasons.
RENEGOTIATIONS: Rookie contracts can't be
renegotiated or altered in any way until after the last regular-season game of
the third contracted year. Undrafted rookies must wait until after the second
season to amend a contract.
25 PERCENT INCREASE RULE: Unless a player's P5
Salary is set at the minimum every year, no team can sign a player to a
contract that would give him a raise of more than 25 percent annually [Sec. 3,
(e), 26]. So, the second year of the contract can't provide a salary more than
25 percent of the first year, and after that, each subsequent year can't offer
an increase of more than 25 percent of his previous year's salary.
ADJUSTED AVERAGE ANNUAL VALUE: When gauging a
free agent's value, it can be helpful to compare him to what other players at
his position receive in salary. However, it can be misleading to simply look at
the average annual value (AAV) of a contract that was signed in a previous
year, when the salary cap was smaller. A more realistic picture of a signed
player's value can be attained by using adjusted AAV. This allows those
involved in negotiations to identify true financial benchmarks with a common
denominator.
Consider the wide receiver position. Giants receiver Odell Beckham's
current contract has an average annual salary of $18.0 million, which is the
highest at his position in the NFL. He signed that deal in 2018, when the
salary cap was $177.2 million -- meaning his $18.0 million average salary
accounted for 10.2 percent of the Giants'
cap space (not including rollovers, adjustments). The adjusted AAV of Beckham's
contract, then, is 10.2 percent of today's salary cap of $188.2 million: That works
out to $19.1 million.
Now consider Bengals receiver A.J. Green.
Even though the average annual salary ($15.0 million) of the contract he signed
in 2015 is less than Beckham's, Green's adjusted AAV is higher. In 2015, $15.0
million was 10.5 percent of the $143.28 million salary cap; in 2019, 10.5
percent of $188.2 million equals $19.7 million.
WHAT MAKES UP A PLAYER'S
CAP HIT?
A player's cap hit is made of various elements and does not
reflect how much a player is paid in a given season -- but rather, how much a
team is charged against the salary cap in that season. For an example of this,
let's consider how teams use prorated signing bonuses to pay out more cash than
they are being charged for against the cap.
Rams defensive
lineman Aaron Donald signed
a six-year, $135 million contract extension with the Rams
in 2018. Donald received a $40 million signing bonus, which will count for $8
million against the cap in each of the first five years of the contract.
Donald's Year 1 cash flow (in 2018) consisted of $40.892 million, stemming from
the signing bonus and his base salary of $892,000. But because his signing
bonus was prorated, the signing bonus only counted for $8 million against the
cap; when his $892,000 base salary was factored in, his cap charge in Year 1
was $8.892 million.
Now let's examine Packers quarterback Aaron Rodgers'
contract. Rodgers signed a four-year, $134 million contract extension with
the Packers in
2018, and he received a $57.5 million signing bonus, the largest signing bonus
in NFL history. Prorated over the first five years of the contract (Rodgers had
two seasons left on his prior contract), that signing bonus will count for
$11.5 million against the cap in each of those seasons. Rodgers' Year 1 cash
flow (in 2018) consisted of $66.9 million, stemming from his $57.5 million
signing bonus, his $7.8 million roster bonus, a $1.1 million base salary and a
$500,000 workout bonus. But because only $11.5 million of the prorated signing
bonus counted against the cap, his cap charge was $20.9 million.
No comments:
Post a Comment