If money is evil, how can NFL teams convert it into good?
As we all know, NFL budgets and salary cap are recurring themes and challenges every off season. Building a team within the appointed salary cap for the season has become a creative artform rather than cold hard number crunching.
Why? The rules as to how much money hits your salary cap depends on the verbiage used to disseminate how said money is going to be paid to the players and coaches is what will affect the actual cap hit. It is no longer about how much money we have to spend and build a team within that budget.
It has now become a game of how we creatively move money around and pay different kinds of salaries to players. Think of the following items that all fall under the salary moniker but do not all weigh the same against the cap:
- Base Salary
- Signing Bonus
- Roster Bonus
- Option Bonus
- Restructuring Bonus
The magic of the signing bonus
To elaborate, let’s say a player gets drafted and signed to a four year deal that is worth $25 million total with a $16 million signing bonus. That bonus is guaranteed. However, the team works its financial magic to have the signing bonus be spread out over the 4 years of the contract and thus the cap hit will be a $4 million cap hit for each of the four years of the contract.
The other magic that happens is making contracts heavier towards the end of the term rather than the beginning of the contract. The reason this happens is to lessen the impact on the team cap in the early going of the contract. Teams can then renegotiate during the latter years or release the player.
While this seems to be a huge team beneficial approach and would most likely sway players not to sign, there is always an extra incentivisation process that allows players to make bank while still being team friendly. This incentive is once again the signing bonus.
A signing bonus in the NFL is the deciding factor for most players as the bonus is guaranteed money. This means that if a player gets hurt, cut or traded, that money is still guaranteed and is not linked to any back heavy contracts or performance incentives.
Who gets paid what
Now that we know there is artistic magic happening in the financial areas of each NFL team, how has this translated to the field? Are the highest paid players returning the successes the teams need to justify their contracts? Are the accolades enough to justify the expenses of the players? Are merchandise sales enough to counteract the cost? Or are we carrying the artistic approach to team building with a cap to also evaluate true player value?
There are many questions we could ask ourselves here as outsiders to NFL organizations that will most likely not give us a satisfactory answer. If we look at other professional sports across the world and the organization in charge of those sports we see very different patterns emerge. In MLB, all contracts are fully guaranteed at the moment of signing. In the NBA we see very player friendly contracts being handed out like candy on halloween.
In Football/Soccer we see the different leagues give out different salaries based on a multitude of factors like jersey sales and advertising revenue on the club level (rather than their specific league level).
With that in mind, let’s look at the top 10 salaries in the NFL, based on their cap hit for the 2022 season. Add their position and the successes they have achieved with their current teams.
- Ryan Tannehill (QB)
- Patrick Mahomes (QB)
- Kirk Cousins (QB)
- Jared Goff (QB)
- TJ Watt (OLB)
- Chris Jones (DT)
- Aaron Rogers (QB)
- Carson Wentz (QB)
- Joey Bosa (OLB)
- Leonard Williams (DE)
Out of that list, there are only two players who have earned super bowls, mvp’s and other accolades that justify their salary. Those players are Aaron Rogers and Patrick Mahomes.
If we approach the list from a purely financial standpoint, it becomes clear that most players in the NFL are overpaid for their performances. The NFL however, cannot be evaluated in that fashion. These players put their body, minds and futures on the line every season for the entertainment of millions.
Having playmakers on your squad generates more income in many areas. Having big names on your roster allow teams to appease their fanbase, generate revenue for next season, attract more playmakers and ultimately achieve success on the field. While there is no guaranteed formula on how to achieve these successes, unless you are the antithesis of proving people wrong or named Tom Brady, there is a method to the madness that is money in the NFL.
Who is the real winner?
Teams work very hard every year to find the next hall of famer or perennial all pro and incorporate them into their teams and keep them on the roster as long as it is beneficial to the teams performance and success.
Players work very hard to make it into the NFL, get on a roster and more importantly stay in the NFL long term. For players, this means that their need to get paid as much as possible as fast as possible is crucial for their long term financial security as the average NFL career is roughly three to five years short. For the writer of this article, it creates a catch 22 situation when trying to evaluate how salaries are paid to players.
Do we side with the teams and fanbase where players get paid team friendly salaries to attract more quality to the team and achieve success? Or do we look at it from the players perspective and realize that these players all have on average of about three years to earn enough salary to last them until retirement?
It becomes a battle to understand the evils of money in the NFL. There are so many angles to consider when evaluating cash and the deeper we go the more difficult it becomes to remain objective. It is the opinion of this writer that there is no 1 side to choose and there needs to be a way to find balance between the two.
If the NFL financial wizardry can find a balance between paying players what they are worth and what they deserve while maintaining some form of team friendly wages then the NFL can finally move forward in a manner that does not cast conspiracies upon each team and their yearly financial games while protecting players better and allowing them to truly earn what they deserve.
