Welcome to part two of 7 NFL Negotiation Strategies that Maximize Guaranteed Money. In the Part 1, we learned about incentive-laced contracts, the definition of deferred payments, and what signing bonuses are. Today we’re finishing up with the remaining 4 strategies/concepts that I’d like to share.
4. Try to get at least a $2 million signing bonus. An NFLPA study showed that, since 1993, 95% of players who got a signing bonus of at least $2 million stayed on their original team for at least two seasons, and 73% of them staying on their original team for at least three seasons.
This is crucial, because the longer you’re on the roster, the more salary money out of your contract you’re going to see.
In order to fall into this category as a rookie, you generally have to be drafted in the second round at the lowest, as the average guaranteed money in a second round contract is $1.8 million, and for the first round it’s a little under $12 million. Of course, with the new CBA, players picked at the top of the first round are going to make less, so the $12 million average for first round players will likely drop some.
5. If you get a 2 million signing bonus, try to front-load your salary. Let’s say you have a 5-year $25 million contract, plus that magical $2 million signing bonus. Let’s also pretend that we could see into the future, and we knew that team X was going to cut you after your second season for whatever reason.
If your contract was set up so that you’d make $7million of the $25 million during your rookie year, then $8 million during your second, you would’ve made $15 million of the $25 million. Alternatively, if your salary was split evenly amongst the five years, you would’ve only made $10 million of the $25 million.
6. Try to get a large roster bonus after the third contractual year. If you perform up to expectations, a roster bonus will make sure you get more “guaranteed” money. Roster bonuses are additional guaranteed funds (like a signing bonus) that players make as an incentive for doing well enough for the team to keep them.
Let’s stick with the 5-year, $25 million contract example. If you met expectations after year two, and the team that drafted you wanted to keep you around, they’d pay you your roster bonus of, say, $4 million dollars, plus the $3.3 million you were due in base salary for that third year of the contract.
…so now the team has 4 million reasons ($) to keep you around, at least for the third year of the contract. At this point you’re virtually guaranteed another $7.3 million dollars, when you add together the $3.3 million you’re due for base salary, plus the $4 million roster bonus.
7. Consider putting-off guaranteed base salary until the last years of the contract. It’s extremely rare for players to the see the incentive money or base salaries from the last couple years in the contract, because by then, the player will have either a) outperformed his original contract and signed for an extension, or b) played poorly and would have been released by then.
In the example above, your first couple years are likely in-stone anyway (because you got $2 million or more signing bonus), so you could save those “guaranteed” money vouchers (for lack of a better description) and use them towards the end of the contract. Plus, teams like this, because the signing bonus’ hit against their salary cap is stretched-out over more years, which gives them more money to work with as an organization each year of your contract.
Disclaimer: Always consult with your attorney or agent about these issues, to make sure they’re right for your specific situation.
My goal was just to enlighten you to some NFL Negotiation strategies that you can bring up or discuss with your agent when it’s time to start the negotiation process. Best of luck!
Do you think I left anything out? Leave your comments, I’d love to hear back from you!