Historic Breakthrough in Guaranteed NFL Contracts

By: Leigh Steinberg

ORIGINAL POST on Forbes.com

The team sport with the highest risk of injury and shortest career span-the NFL- was able to impose an ironclad "no guaranteed contract" policy for most of its history. This hard-line stance has started to crack in the years since the signing of a Collective Bargaining Agreement. This year the top twenty first round draft picks received contracts which are totally guaranteed for skill and injury. Other first rounders got three of the mandatory four years guaranteed and Paxton Lynch at #26 has $600,000 of his 4th year guaranteed. Second round draftees received two years of guaranteed money. This is unprecedented.

Major League Baseball and NBA players have received guaranteed contracts for many years. NFL players received signing bonuses which were guaranteed but the yearly salaries in a long term contract were not. A skill guarantee means that even if the club waives a player, he receives the remainder of his salaried contract just as if he was playing. When first baseman Albert Pujols signed a ten year guaranteed contract with the Angels, it meant that if the team waived him during the tenure, they were still obligated to pay him every last penny of the years remaining.

An injury guarantee ensures that if a player suffers a career ending injury and cannot play any more, he still receives every salary just as if he were healthy. NBA and MLB injury guarantees often cover injuries sustained in any way, even if not incurred during game play or practice. If a player trips on a rake in the off-season and can never play again, he still is paid the remainder. NFL injury guarantees specify that the qualifying injury has to be "football related," suffered in a game or during practice.

One rationale for paying rookies with large signing bonus was the competitive environment that existed with other leagues. To attract players to the old AFL, the WFL or the USFL, NFL teams had to compete with premium offers being made by the other league. In the early years of football, an attorney like Whizzer White could make more money practicing law than playing football, so teams needed to offer bonuses. Now that players are handsomely paid and there is no competition and guarantees are being introduced, it remains to be seen if this will modify bonuses. In the other team sports, with all the money in salary guaranteed--players and agents who are satisfied with the overall compensation, do not worry about bonusing, because they are sure the money will be paid in all circumstances.

One of the arguments against guaranteeing contracts is that the player may lose motivation. The players I have represented are so fiercely competitive and dedicated to winning that I have never seen that result. Teams also fear that they will be financially obligated to pay millions of dollars for a player who is not healthy or is not productive. This has an especially damaging impact in salary capped football where dead cap money can cripple a team. It puts extra pressure on team executives to evaluate the health and productive life of players to whom they grant long term guaranteed contracts.

In 2011, the first year of the new NFL Collective Bargaining Agreement, 17 players had their contracts fully guaranteed. This year it expanded to 20 players and lower round guarantees. This marks a revolution in the security for NFL players and will continue to expand.