By KEITH GLOCK
CONJSports.com Founder
@conjsports
There is a nasty reality simmering below the surface of NFL contracts, though it simmers in plain sight. The reality surrounds non-guaranteed contracts.
Seemingly each time a high-priced free agent or disgruntled player currently under contract agrees to a new deal with one of the league’s 32 teams, the headlines are eye popping.
Wednesday, September 4th, 2019 was no different.
The #Cowboys & RB Ezekiel Elliott agree on a 6-year, $90M extension that makes him the highest-paid RB in the NFL, sources tell me and @SlaterNFL. Roughly half guaranteed. In all, it’s $103M over 8 years—the 1st Cowboy to eclipse $100M in total value, the richest RB contract.
— Ian Rapoport (@RapSheet) September 4, 2019
One of the smartest men in sports, former player agent turned Green Bay Packers salary cap guru turned Executive Director of the Sports Law Department at Villanova (whew!) Andrew Brandt, notes that we should probably hold our horses on that initial number:
First reaction to Zeke deal: extraordinary length of 8 years. And likely two years guaranteed, meaning 6 one-year options for the Cowboys. — Andrew Brandt (@AndrewBrandt) September 4, 2019
In the NFL, everything teams do in terms of player acquisition and contract structure is about the salary cap. So what does this Elliott extension really mean for the Cowboys, and for Elliott?
It means that the Cowboys can cut Zeke after two years with what is probably a hefty cap hit (20+ million that year and the next). BUT, and there’s always a but, if he plays two years of his six-year extension, depending on the structure of the base salary, the Cowboys could jettison him with little to no Elliott related monetary dirt caked to the big star at midfield – AT ALL.
So why is Zeke happy?
He gets an extra $7.5 million in his pocket right now, as a part of an extra $50 million overall. And, most importantly it seems for these players, he gets to proclaim, and have headlines written, which say his contract averages $15 million annually, which makes him the “highest paid” running back in the NFL.
Yes, he is excited that he gets to brag, and have the public think, that he’s the highest paid. That’s it. Seriously.
But that’s just not how it works!
The way the headlines read, you see the contract’s total value when divided by the number of years of the terms of the deal, it equals $15 million per year.
Sadly, it’s waaaaaaaaaaay more complicated than that.
The Rules
Let’s geek out for a second and go over the very basic rules (and there are about a million rules when it comes to how the contract relates to the salary cap, because they are starkly different.
1 – Guaranteed Years:
Teams put language in the contract that says, we guarantee your salary for ____ number of years. Take it or leave it. This is essentially the item that means the most.
After those guaranteed years are up, teams can say, “smell ya later!!” and the base salary (whatever non-guaranteed part is left of it) no longer counts against the salary cap.
For players, it’s why Kirk Cousins’ fully guaranteed three-year deal with the Vikings was ground breaking. Though no other fully-guaranteed deals have followed, so was it really?
2 – Signing Bonus:
As they relate to the salary cap, a player’s signing bonus is divided by the number of years in the term of the contract, and the quotient is the number which counts against the team’s salary cap.
Now let’s look at how these rules relate to Elliott’s extension. The key word is extension. That means that the current contract plays itself out, and then this new part kicks in.
The Years Already Under Contract:
2019:
$3.85 million guaranteed salary + 4.08 of prorated money = 7.94 million against the cap
2020:
9.09 million base (previously not guaranteed, now is) and no proration because it was option year of his rookie contract = 9.09 against the cap
The 2021-2026 Extension
Terms: $7.5 million signing bonus with zero guaranteed years, but $50 million in guaranteed money.
Therefore: $7.5 million / 6 years = $1.25 million annually against the cap.
Let’s say that the Cowboys have structured all their recent extensions so that Elliott gets a hefty sum in the first two years of this deal – say $20 million and 22.5 million (which when you add together with his $7.5 million signing bonus = the $50 million guaranteed).
In theory, Elliott could play out those next two years and the Cowboys could decide that they want to go with a less expensive runner because of other contracts they want to sign.
They say hasta la vista baby and from 2023 through 2026 Elliott counts just $1.25 million in dead money against the salary cap (signing bonus divided by contract years) to be rid of his salary. Talk about a bargain.
But it makes for great headlines.
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