The Football Educator’s last 3 posts have centered on defining the idea of “Revenue” and the various sources throughout the National Football League’s business operations that help to fill the so called “buckets”. We’ve examined where the money is generated from, what various efforts by ownership are allowed as credits, and the obscure, sometimes unseen rules that pick and poke at that overall revenue number.
Robbing Peter to pay Paul?
Unlike our government that relies upon perpetual collection of taxpayer monies to fund benefit programs promised past and present, the NFL is a business that sells a product. The profits of that product are what must be used to ensure their own programs are a mainstay of protection for years to come. Thus Player Benefits are directly subtracted from Player Cost Amounts (filled by the revenue buckets) to set the financial ceiling standard (known as the NFL Salary Cap) for decision makers in football operations when building a Club’s roster. It’s a trade off for “Player Benefits” commitments made for past and present performance (current & retired players) in exchange for salaries to be paid for future performance.
This arrangement ultimately ensures that everyone is getting “theirs” under a finite set of resources; ownership, players, and retired players.
Defining Player Benefits
With that let’s look at the definition of “Player Benefits” that are taken from Player Cost Amounts (as related to All Revenues) to get to the annual NFL Salary Cap. Directly from the new Collective Bargaining Agreement (CBA);
“Benefits” and “Player Benefit Costs” mean the aggregate for a League Year of all sums paid (or to be paid on a proper accrual basis for a League Year) by the NFL and all NFL Teams for, to, or on behalf of present or former NFL players, but only for:
The Golden Years
Revenues used to finance the Pension fund, which includes the Bert Bell/Pete Rozelle NFL Player Retirement Plan and Second Career Savings Plan. Those “vested vets” with 3 credited seasons, or players with 5 years of service, are eligible for Pension. NFL Clubs are mandated to contribute to this fund and have no way to opt out. NFL Clubs must also contribute to the Second Career Saving Plan through matching contributions in accordance with voluntary player salary deductions, and or minimum contributions to the general fund based on numbers of players eligible.
Are you in good hands?
Group insurance plans; life, medical, and dental coverage, along with the Disability Plan. Vested players no longer employed with a club after May 1 in a calendar year are covered through Week 1 of the regular season the following calendar year and can extend up to 60 months thereafter before COBRA benefits apply.
- Life – $600K for a Rookie, increased by $200K for each credited season to max at $1.6M
- Medical – Annual deductible of $600 for individual player, $1200 for family coverage. Out of network co-pay of 30%. Amount paid by a covered individual for non-compliance with precertification and emergency admission procedures $500 and reimbursement paid to the covered individual for such services reduced by 50%. A 3 tier prescription drug co-pay of $15/$25/$50. One physical a year for the player and his spouse.
- Dental – Usual customary and reasonable (UCR) expenses associated with dental work. $50 annual deductible per player and $100 per family. Max expenses to be covered at $2000. Preventative care services covered at 100%, General 85%, and Major 50%.
- Disability – Changes were made to the Disability Plan through the new CBA regarding eligibility and payments that are more lenient towards player application and claims, yet appear to require more administrative oversight.
Once, and only once
Injury Protection (2011-2015) – To qualify for Injury Protection Benefits a player must have been physically unable to participate in his club’s last regular season game due to a severe football related injury (NFL game or practice) and gone through the normal rehab procedures during the offseason that followed. If the player then fails the preseason physical leading up to the next season because of this injury and is subsequently released, he is eligible for Injury Protection. There is no way for an NFL Club to “skirt” the rules by the timing of the physical and or release.
As per the CBA; A player qualifying under Section 1 above will receive an amount equal to 50% of his Paragraph 5 Salary for the season following the season of injury, up to a maximum payment of: $1,000,000, in the 2011–12 League Years; $1,050,000, in the 2013–14 League Years; $1,100,000, in the 2015–16 League Years; $1,150,000, in the 2017–18 League Years; and $1,200,000, in the 2019–2020 League Years; in each case unless he has individually negotiated more injury protection or a larger guaranteed salary in his contract.
An NFL player is entitled to this protection but once in his NFL career.
Next up from the Football Educator, more in a long list of Player Benefits.