The NFL’s Era of Guaranteed Contracts Begins

Anyone not living under a rock or in North Korea is well aware that the rich continue to get richer while the rest of us basically get to have a Coke and a smile and shut up. Nowhere is this more statistically obvious than under the aegis of the NFL, where typically 15 players per team absorb 75 percent of the salary cap. This usually leaves between 55 to 60 percent of every roster making the league minimum so the stars can get theirs.Of course, the benefits for the top players don’t end there. With the latest round of CBA negotiations there was nary a whisper for the holy grail of pro athletics — guaranteed contracts. Not only do the frequency of serious injuries make this a non-starter for the owners, but the players themselves perhaps know that without the ability to tear up a contract at any time, owners would be less inclined to hand out ever-escalating wads of cash to the elite.

As it turns out, the NFLPA had no reason to sweat it. With big contracts continuing to balloon, sucking up more and more of a salary cap that has inflated at a slower rate, GMs around the league have been increasingly willing to hand out guaranteed money in order to mitigate the salary cap hit in a given year.

Signing bonuses are no longer the lone bastion of guaranteed money in the NFL. With the new CBA limiting the proration of signing bonuses to five years, GMs have resorted to an assortment of other bonuses, often guaranteed, in order to manage their salary cap.

Last offseason, with surprisingly little fanfare, the first largely guaranteed contract in NFL history was signed by Calvin Johnson. The gluttonous and foolhardy eight-year, $132 million deal included $60 million in guaranteed money with only a $16 million signing bonus. The majority of the guaranteed portion was actually the salaries in the first five years of the contract. Once these guarantees dry up in 2016 and Johnson’s base salary dramatically increases, the Lions will likely trash the contract and hand out more bonuses, ala Tom Brady.

While these guarantees help keep Johnson’s cap hit under $13 million until 2015, they also allow Megatron to be the Paulie to the Lions’ Goodfellas. Johnson can decide to join a commune with Smokey Williams and smoke junk all day, and the Lions still have to pay him his salary until 2017.

Joe Flacco’s newly-signed monstrosity provides the blueprint for all rich contracts to follow, likely including those for Aaron Rodgers and Clay Matthews. Though widely known as a six-year, $120 million deal, a closer inspection of the deal shows it is more realistically a three-year deal worth $63 million, with $52 million in guaranteed greenbacks.

For the honor of having Flacco acquiesce to sign on the dotted line, the Ravens are giving him $29 million this year. Next year, he is guaranteed another $15 million bonus and in 2015, he is contracted to received a $7 million bonus. In these three years, Flacco’s cap hit never exceeds $15 million.

Of course, in 2016, the check comes due and Flacco’s cap hit skyrockets to $28 million. However, it is doubtful the Ravens will ever pay that. It is more likely that they will merely pull another Tom Brady and hand out some more guaranteed money on an extension, only purpose of which will be to provide more, likely fictitious, years to prorate the bonuses through.

As mentioned, this provides a path for the Packers to follow. This is also why the Packers aren’t required to have a great deal of extra cap space to accommodate either contract. Through the use of guarantees, the Packers can convince both Rodgers and Matthews to sign on the dotted line while mitigating the blow to their cap, at least in the near future.Of course, any guarantee is the opposite of an incentive for these star players to maintain their elite level of play. That certainly did not seem to affect the play of Calvin Johnson, who broke the receiving yardage record after cashing his lottery ticket, though he did suddenly seem allergic to practice.

Ultimately, teams’ luck with this factor may determine whether they remain competitive or not.