Sports Negotiations – Defining NFL contract incentives

This is part 2 in a series of posts dealing with NFL contract incentives – Part 1: The curious case in support of incentives

Bruce Tulgan, one of the country’s foremost experts in the management of Gen Y workers (and therefore a majority of NFL players), wrote the following in his book Not Everyone Gets A Trophy; 

By the time Gen Yers arrive at the workplace, short-term transactional thinking is second nature to them. … Sometimes when I point this out to managers, they’ll say, “Yeah, well, they’re not paying us.  We are paying them.  So what currency do they bring to the transaction?  They can do as they are told.”  …

Of course you want to get more and better work out of every one of your Gen Yers.  For their part, Gen Yers want to earn more of what they need and want.  The best solution?… Stop paying them and start buying their results, one by one.  The more you trade results for rewards, the more reliable their performance will be.

Gen Yers = NFL Players = Incentives

Hmmm, wouldn’t that be nice in the National Football League.

TGC Geno Smith incentives

Part of Tulgan’s creed is already built into the NFL’s Collective Bargaining Agreement through incentives.  I for one would like to see a more heavy use of incentives in the negotiation of NFL player contracts.  Though their profession is “football player” and not paralegal, computer analyst, or data processor, the NFL player pool can’t escape the very traits that the define the generation they ALL emanate from.

Incentives fall into two distinct categories in relation to the NFL Salary Cap; “Likely to be earned” and “Not-likely to be earned”.  ”LTBE’s” count automatically against a Club’s Salary Cap entering into the season the incentive is tied to.  If an “LTBE” is not achieved in the given season, then the Club will receive a credit of the unearned amount towards the following season’s cap number.  ”NLTBE’s” don’t count immediately against a Club’s Salary Cap in the given season, but are reconciled at the end of the year and deducted from the following season’s total if achieved.  As per the CBA;

“LTBE” Incentives – Count against the Cap

  • Any and all incentive amounts, including but not limited to performance bonuses, shall be included in Team Salary if they are “likely to be earned” during such League Year based upon the player’s and/or Team’s performance during the prior year.
  • Any incentive in year one of a Rookie Contract shall be deemed “likely to be earned.”
  • Any incentive within the sole control of the player (e.g., nonguaranteed reporting bonuses, offseason workout and weight bonuses) shall be deemed “likely to be earned.”
  • TGC Likely to Be EarnedAny team performance will be automatically deemed to be “Likely to be earned” if the Team met or exceeded the specified performance during the prior League Year.
  • Any team performance-related incentive will be revalued under the “likely to be earned” rules if the contract is assigned to a new Team through trade or waiver.
  • Any incentive bonus based on the team’s performance automatically will be deemed “likely to be earned” if it sets a minimum level of statistical performance that is equal to or lower than that achieved by the team finishing fifth from the bottom in the League in the applicable category during the previous season.
  • Any incentive bonus that is based upon the team achieving a particular ranking in its performance relative either to other teams in the League, or to other teams in its Conference, automatically will be deemed “likely to be earned” if it sets a ranking level equal to or lower than fifth from the bottom of the League or third from the bottom of the Conference, respectively.
  • Any incentive bonus based on the team’s ranking in its Division automatically will be deemed “likely to be earned.”
  • Any incentive bonus that is stated in terms of a per play or per game occurrence automatically will be deemed “likely to be earned” to the extent the specified performance was achieved by the player (if an individual incentive) or by the team (if a team incentive) in the previous year.
  • Any incentive bonus to a kicker or punter for leading his team in any kicking or punting category automatically will be deemed “likely to be earned.”
  • Any roster bonus which is deemed not “likely to be earned” based upon the player’s performance during the prior year shall immediately be included in Team Salary when earned. Preseason roster bonuses are automatically deemed “likely to be earned.”

“NLTBE” Incentives – Don’t count against the Cap

  • Any team performance will be automatically deemed to be “not likely to be earned” if the Team did not meet the specified performance during the prior League Year.
  • TGC Not likely to be earned incentivesAny incentive bonus based on the team’s performance automatically will be deemed “not likely to be earned” if it sets a minimum level of statistical performance that is equal to or higher than that achieved by the team finishing fifth from the top of the League in the applicable category during the previous season.
  • Any incentive bonus that is based upon the team achieving a particular ranking in its performance relative either to other teams in the League, or to other teams in its Conference, automatically will be deemed “not likely to be earned” if it sets a ranking level equal to or higher than fifth from the top of the League or third from the top of the Conference, respectively.

Want more incentive to keep reading The Football Educator?  More on incentives in my next post!

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