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How Guaranteed Money Changes the NFL

Drew Brees by Keith Allison is licensed under CC BY-SA 2.0

How Guaranteed Money Changes the NFL


Estimated Reading Time: 4 Minutes

The 2018 NFL offseason will be one fans remember for a flurry of signings, trades and eventually for the draft picks. Players and owners, on the other hand, will remember the 2018 offseason due to guaranteed money being added to new contracts.

For years it was assumed NFL players would never enjoy the luxury of guaranteed contracts due to the nature of the sport. In a recent study from Harvard University the rate of injury in the NFL went from an abstract to a quantifiable certainty:

The mean number of injuries suffered per game in the NFL is approximately 3.4 times higher than the combined rates of MLB, the NBA, NHL, and UEFA combined. Similarly, the NFL’s concussion per game rate is approximately 6.9 times higher than the combined rates of those same leagues.

Because of this increased chance of a player being injured, it is understandable why owners reduced their financial risk by making contracts about longevity and incentives, no upfront payments. It was a pure business transaction. Owners knew any player could sustain a career ending injury at any point in a game. Therefore, they gave players ridiculous, incentive-laden deals that looked much more lucrative than they really were when first reported.

An NFL Contract Example

To understand life before guarantees here is an example. Let’s say Ryan Fitzpatrick signed a three-year deal worth $30 million. At first glance, that’s a pretty great deal. Ten million dollars per year to play football? Sign me up. But then we would learn more. The second and third year would be team options. And there would be incentives included in the total value. And then we’d find out the final nail in the coffin: only $7 million was guaranteed.

That deal quickly goes from a $30 million dollar payday to a $7 million haul. That’s great because, well, Fitzy would still be getting millions of dollars to play a game. But Fitzpatrick would be a sad panda because there would be $23 million left on the table. And that money would more than likely never reach his bank account due to the team not picking up his options, unless Fitzpatrick turned played like Brady.

Guarantees and a 2021 Lockout

The frustration with these contracts has been a hot topic for the NFL Players Association for decades, especially as NFL players saw their counterparts in the NBA, MLB and NHL receiving much more guaranteed money than anything they could hope for. Coupled with frustrations over revenue sharing between players and owners, which directly impacts the league salary cap, rumors began swirling about a lockout in 2021.

But then the owners did the unexpected this year. They gave into the desire for more guaranteed money. Now don’t get me wrong, players earning guaranteed money isn’t done out of the kindness of the owner’s heart. It gives them another card to play when trying to draw a player to their team.

Going back to our example with Fitzpatrick, let’s say he got that same deal offered to him by team 1, but team 2 gave him another deal. And this one was three years for $20 million and $11 million guaranteed. In our little scenario, the 2nd and 3rd years would still be team options. Not too surprisingly, Fitz would more than likely take the deal from team 2. So the owner that played the guaranteed money card would win and Fitzpatrick would be happy with his guaranteed payday.

So, Who is Getting Paid?

Let me be very clear: supply and demand is at play when it comes to these guarantees. Punters do not get a lot of guaranteed money. But you know who is? Quarterbacks. All of them. If you have an arm and look like you may be able to throw a ball relatively straight for more than ten yards you will get paid. Just look at these deals that were signed in 2018:

Kirk Cousins

Kirk becomes the first quarterback to sign a multi-year, fully guaranteed deal.

Jimmy Garoppolo

Includes $48,700,000 guaranteed.

Drew Brees

Two years, $50 million. Includes $27 million in guaranteed money and will include a no-trade clause.

Guaranteed Nightmare

Keep in mind that while this is a win for players, there is a damn good chance that one of these contracts absolutely ruins a franchise. I’m not saying these players don’t deserve a payday – I’m happy for them and hope they buy a fleet of platinum and gold jet skis. But these contracts come with, not surprisingly, a lot more risk. Previously, teams were able to avoid a lot of risk if a player went down with a career-ending injury.

Now if a player who signed a guaranteed contract gets injured, the money doesn’t just go away. Instead, it counts toward their salary cap space (currently $177,200,000 in 2018), which impacts the team’s ability to fill the now empty and slot sign other important players.

So to every Vikings, Saints and 49ers fan out there: here’s hoping that your quarterbacks stay healthy. Otherwise, you’ll only be able to afford Tim Tebow at quarterback and whatever fan is in seat 5, section J at strong safety.

Mark was raised outside of Boston, so his favorite socks are red and the only Giants he'll ever like are the little ones. He is a michelada advocate and a big fan of 8 game parlays that never work. He has been writing about sports since starting his own blog in 2014, Don't Think Just Throw, and is excited to be a part of The Turf.

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