NFL CBA Series: Signing Bonus

The Lambeau Leap never felt so good.

The Lambeau Leap never felt so good.

A signing bonus one of most mainstream forms of player compensation. The term is often utilized in sports media when discussing new player contracts. A signing bonus is guaranteed (subject to some forfeiture provisions) and is often referred to as the only guaranteed money for NFL employees.

Signing bonuses are lump sums awarded to a player when he signs his contract.

Though a player does technically earns his this bonus right away, sometimes players will defer some of this money, receiving it in payments over time.

The most notable payments in NFL history have been signing bonuses, and there have been quite a few of note:

Name

Signing Bonus Amount

Year

Aaron Rodgers

$35 million

2013

                         Joe Flacco

$29 million

2013

Tony Romo

$25 million

2013

Drew Brees

$37 million

2012

Peyton Manning

$34.5 million

2004

Signing bonuses are different because of their unique calculation for salary cap purposes. Teams can take advantage of Proration (also covered in the NFL CBA Series), which allows them to spread the bonus amount over the life of the deal (up to a maximum of five years) therefore reducing the team’s yearly cap hit from the Player Contract.

Though the term “Signing Bonus” is a bonus a player gets for signing, there are many amounts that the NFL treats as a Signing bonus and can be prorated. Here is a brief summary of these other payments as set forth in Article 13 of the CBA (Section 6, 93).

  1. Any amount described as a signing bonus
  2. Any guaranteed reporting bonus
  3. Guaranteed or paid considerations for option years, contract extensions, modifications, or individually negotiated rights of first refusal
  4. Any option exercise fee or bonus
  5. The entire difference between a player’s first and second year of contract if second year of deal is less than 50% of first year
  6. If a contract is signed after training camp, any reporting bonus in that season
  7. If a contract is signed after the last preseason game, any roster bonus for that season
  8. Any guaranteed salary advance
  9. Any guaranteed workout bonus
  10. Any salary advance the player isn’t required to repay
  11. Any worker, roster, or reporting bonus that is guaranteed for skill, cap and injury on a “non-contingent” basis for all guarantees
  12. For any contract, renegotiation, or extension of Player Contract executed in the Final League Year, if the money is to be paid in the next league year, any salary advance that does not need to be paid, any workout bonus that requires participation in less than half of the program, any offseason roster or reporting bonus
  13. Any bonus that is given for a player to honor his player contract or any bonus given to a player for not holding out (often called a completion bonus) that is guaranteed for skill and injury
  14. Relocation bonuses that are individually negotiated between a team and a player
  15. Any increase in salary causing a salary increase in the current League Year—if NFL doesn’t receive the terms of the agreement prior to 4PM the Monday after Week 10 of the NFL season.

If you are interested in how signing bonuses and amounts treated as signing bonuses affect the cap, check out In2The League’s section on Proration.

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