Exploring contract incentives in NFL player contracts, as well as differentiating LTBE and NLTBE incentives.
Dead Money and Acceleration The term “Dead Money” refers to the amount of player’s salary that a team has already committed to but hasn’t been charged to the cap (NFL CBA, p. 93-95). It’s essentially a sunk cost. Signing bonus prorations, fully guaranteed base salaries and earned bonuses are examples of dead money—money a team... Continue Reading →
Incentives in veteran player contracts, unlike those rookie deals that are limited to playing time, can be earned through the accomplishment of individual and team goals (i.e. statistics, playing time, awards, etc.) specified in the contract (NFL CBA, p. 96-104). For a list of acceptable performance incentives see pages 98-101 in the CBA. There are... Continue Reading →
When a player is not on a team’s Active or Inactive List, the team can reduce that player’s salary due to his services being unavailable (i.e. on a team’s Injured Reserve list). Many young players, typically late-round draft picks, will sign what are referred to as Split Contracts to reduce the financial burden to teams... Continue Reading →