How Does Guaranteed Money Work In The NFL?
Guaranteed money in the NFL has been utilized on a consistent basis in signing players to lucrative contracts. It is a technique used with the hopes for a team to lock down a big-time player for an extended period of time. It's been used most frequently in contracts for franchise quarterbacks over the last ten years or so. Just recently, the Dallas Cowboys extended Dak Prescott's contract for 4 additional years, with $126 out of $160 million guaranteed.
How this concept works though, can be somewhat complicated.
Guaranteed money is used much more often than not in the NFL
First, take note that guaranteed money in the NFL is not a bonus at all, but more a substantial portion of a newly-signed contract. We outside the front office often regard these numbers as staggering and big enough to make headlines. It's exactly what it's called, guaranteed money. This tactic is often used to lure potential players into signing with negotiating teams. The idea that out of whatever amount a player signs for, he's got a decent chance to get most of it without risking himself during the whole term of the contract would look good to any player. It's been used so effectively and often that it's practically expected when a big name is looking to sign a new contract.
A "Full Guarantee" is the most consistently used form of such a "promise" when dealing with NFL contract signings. Once a player signs a contract with this particular guarantee, that player will receive every single dollar from that portion. When the guaranteed money is exceedingly high (bordering on the amount of half of the team's total player salary), the payout is broken down to annual payments to be added to that specific player's contracted base pay.
There are three separate kinds of guaranteed money
When utilized, the full guarantee of a contract consists of a combination of skill, cap, and injury guarantees, rolled into one deal.
The skill guarantee is unique in the sense that it's meant to protect a player from losing his wages if he were released. In this case, a player would receive guaranteed money if losing a roster spot was due to the declining of his skills in relation to his position. For example, a veteran place kicker who's gradually missing more and more kick attempts loses his job to a more accurate kicker, but will still be paid his full salary, after he's cut from the team.
The cap guarantee will ensure a player is paid in the event he is released for salary cap reasons. The most common situation here is when a team releases players to free up cap space, to be used in signing new players. This, like the skill guarantee, would promise a player's full salary should he be released.
The last form of specific guaranteed money is known as the injury guarantee. This is most often used on its own, free of skill or cap-related promises. It's also quite popular across the league when contract negotiations take place. This guarantee comes into effect when a player suffers a football-related injury that renders him unable to play the length of his contract, as diagnosed by the team's physician. This usually occurs in situations where a player suffers a career-ending injury and the team has no choice but to release said player. The guarantee is nullified if the player is let go for other reasons and is currently healthy enough to play.
Going forward, it will be interesting to see how much the option for teams to offer guaranteed money will affect future contract signings in the NFL. It seems like every couple of years, a new deal is the biggest one ever. Players already have the power to negotiate their place on a team, using guaranteed money as a bargaining tool.