Out of the four major leagues in the US (NBA, MLB, NHL), the NFL is the only league that does not overwhelmingly guarantee contracts. This means that the money you sign on for, that deal that says you make $X million over Z years, does not actually mean you will make that total $X *Y amount. You pretty much make your money based on your signing bonuses, as well as any bonuses as the season goes on that are set by ownership and the GM.
Economically, it makes nearly no sense to have non-guaranteed contracts in the NFL, especially for the players. No sport in the big four has the injury rate of the NFL. Players almost always play shorter careers in the NFL than anywhere else, and what's more, the actual post-playing consequences of the NFL are far greater, with CTE and chronic pain being a few of those results. Every single year that they can play effectively, they need to maximize the value of their careers before that time eventually passes. For the maybe eight to ten years the average good player has to make money, you would think that they would want and demand a guaranteed contract.
Unfortunately, because much of the NFL not giving players much of anything else like free agency until 1993, and have continued to fight about pensions, health insurance, and more, guaranteed contracts have unfortunately been turned to the wayside. Another substantial issue with the guaranteeing of contracts is that in the Collective Bargaining Agreement set by the NFLPA and NFL states that if a contract is guaranteed over any years, that money must be put into escrow, or into an other bank account. The salary cap imposed as a result of the free agency going into place also made owners care less about giving athletes guaranteed contracts.
A Harvard study found that just 44% of the money put in NFL contracts was actually written as guaranteed. And although this is almost two-fold increase from 12 years ago, it still does not actually give NFL players the chance to have their own skills to be valued as highly. Fortunately, as of late, some of the best players have begun to have outlined in their deals specific amounts guaranteed, where players like Aaron Rodgers is being guaranteed $100M of his $134M contract (75%!). Yet, with the sport's high injury rate, coupled with the NFLPA fighting far more important battles with the NFL, it appears as though guaranteed contracts will not be in the near future for players, even if the merits themselves are well-deserved. NFL players by all measures should receive guaranteed contracts, but until owners are pressured to make this a reality, there is little to no hope it will ever happen.
Sources:
https://deadspin.com/why-only-the-nfl-doesnt-guarantee-contracts-1797020799
https://www.usatoday.com/story/sports/nfl/2017/09/16/will-nfl-contracts-ever-fully-guarantee-players-can-hope/105676754/
https://www.cnbc.com/2018/08/30/aaron-rodgers-signs-134-million-nfl-contract-commits-to-green-bay.html
Thanks for the post, Noah! I had no idea that the NFL's contracts don't really guarantee that players will see their money. From the players' standpoint, this is abominable and unfair: football takes a toll on the human body, and they should be guaranteed pay.
ReplyDeleteHowever, when you look at it from the NFL's standpoint, these malevolent practices are actually good business. Just like the NBA, the NFL is effectively a monopsony: where else will you play pro football? Because players have nowhere else to go, the NFL can get away with such unethical (yet profit-maximizing) business practices.