Contract Question

[mgteich]

Are there limits on spreading out salaries?

For example, could a contract have a $2M first year salary and a $14M 2nd yea salary.

I know that this use to be OK, but I thought that they many have changed the rules.
=======
It would seem that Wilson would want a contract like this, guaranteed of course.

 

[SlowGettingUp]

Yes, you can have an "option bonus" for example - like a signing bonus, but only kicks-in in year 2.

https://www.si.com/nfl/chiefs/gm-report/the-art-of-nfl-contracts-part-1-the-basics

The Art of NFL Contracts Part 2: The Examples

Putting concepts into practice uncovers the intricacies of NFL contracts.

www.si.com

Likely Wilson will want some guaranteed money in year 2, which makes him not a good fit for the Pats. He's worth more than the vet minimum (which is all he will cost in year 1), and so he will demand some sort of year 2 guarantee.

 

[Steve102]

Are there limits on spreading out salaries?

For example, could a contract have a $2M first year salary and a $14M 2nd yea salary.

I know that this use to be OK, but I thought that they many have changed the rules.
=======
It would seem that Wilson would want a contract like this, guaranteed of course.

If you look at a guy like Mahomes, he's spread out all the way out to 2033.
Patrick Mahomes

 

[Jim Beankie]

Ah yes the ol' 60yr $300mill contract.

 

[203Pat]

Ah yes the ol' 60yr $300mill contract.

The old Bobby Bonilla deal.

 

[jmt57]

Are there limits on spreading out salaries?

For example, could a contract have a $2M first year salary and a $14M 2nd yea salary.

I know that this use to be OK, but I thought that they many have changed the rules.
=======
It would seem that Wilson would want a contract like this, guaranteed of course.

I swear I remember there being a limit to that type of contract at one time.

But I cannot find anything saying that is the case now.

Perhaps with the voidable years in contracts now, that type of contract is no longer being signed.

 

[XLIX]

I swear I remember there being a limit to that type of contract at one time.

But I cannot find anything saying that is the case now.

Perhaps with the voidable years in contracts now, that type of contract is no longer being signed.

The closest I can think of where they limited that sort of contract was in 2010, the "uncapped" year. Even though that year was uncapped, teams were forbidden from drafting contracts where an unusual amount of money was paid in 2010, thereby circumventing the salary cap in prior or subsequent years.

But these days I believe you can structure it however you want. However, a signing bonus can only extend out 5 years so if the goal is to reduce the cap hit of your signing bonus, you can't spread it any further than year 5 even in a longer contract (though in subsequent years, you can convert salary to bonus and spread that out into the 5 following years).

 

[jmt57]

The closest I can think of where they limited that sort of contract was in 2010, the "uncapped" year. Even though that year was uncapped, teams were forbidden from drafting contracts where an unusual amount of money was paid in 2010, thereby circumventing the salary cap in prior or subsequent years.

But these days I believe you can structure it however you want. However, a signing bonus can only extend out 5 years so if the goal is to reduce the cap hit of your signing bonus, you can't spread it any further than year 5 even in a longer contract (though in subsequent years, you can convert salary to bonus and spread that out into the 5 following years).

Thanks for jogging my memory - yes, that was it.

If I recall, at that point in time there was also some sort of a limit to the number of years a contract could be, to sort of coincide with when the end of the players-owners NFLPA agreement ended?

 

[TheRainMaker]

I remember Jay Cutler had this back in the day.

 

[BTTA]

The old Bobby Bonilla deal.

The Sox are still on the hook with Manny for $2M a year for quite some time, IIRC

 

[vicspats]

The Sox are still on the hook with Manny for $2M a year for quite some time, IIRC

Miss me some Manny !!!

 

[DaBruinz]

Max number of years that you can spread out Signing bonus amortization is 5 years.

 

[zimmy]

I think you can have a minimum salary in year one if you want but any signing bonus needs to be spread out evenly over the course of the contract, although you can add dummy years on the end to drop this even further.

 

[DaBruinz]

I think you can have a minimum salary in year one if you want but any signing bonus needs to be spread out evenly over the course of the contract, although you can add dummy years on the end to drop this even further.

The signing bonus is spread out over the length of the contract up to 5 years. You cannot amortize the Original SB beyond that.

Now, if they CONVERT salary to signing bonus, then that is spread over the remaining years, up to a total of 5 years (including void years) . You can't amortize any signing bonus beyond five years.