The NFL Collective Bargaining Agreement: Fun for Everyone!
Alright. Another post that I’ve decided to do weekly, or at least, bi-weekly, is to look at one of the many, many sections of the NFL collective bargaining agreement, and interpret it in layman’s terms, because the CBA is a bit dense at times. The fun and exciting section for this week?
Article 17: Entering the Player Pool, Section 4: Operation, subsection (g). To recap, that’s Article 17, section 4, subsection (g). It states,
(g) Any amount which a Club may pay to a player to buy out a right the player has or may have to terminate one or more contract years shall be treated as a signing bonus at the time the buyout is exercised by the Club, and prorated at that time over the remaining term of the contract, including the current League Year, if the right to terminate and/or the right to buyout is based upon one or more incentives that are not “likely to be earned.” Such a buyout amount shall not be included in any calculation for purposes of the 25% Rule for Rookies set forth above. (The parties acknowledge that they disagree as to the treatment of allocated signing bonus and buyout payments when a player’s right to terminate one or more contract years and/or the Club’s right to buyout is based upon one or more incentives that are “likely to be earned,” and not upon any incentives that are not “likely to be earned.” These issues are expressly left open. Except to enforce the terms of this Subsection (g), the terms of this Subsection may not be referred to or used by any of the parties in any proceeding, or otherwise, and the parties otherwise reserve all their rights with respect to the subject of this
parenthetical.).
This section is talking about a situation where a club can pay a player in order to buy out a player’s option to terminate one or more years on their remaining contract If the club does buy out a player’s option to terminate, the money paid shall be treated as a signing bonus (won’t hurt the team salary cap-wise) for the player and the payout will be prorated (paid in equal amounts) over the remaining portion of the contract that was bought out, if the buyout is based upon incentives in the contract that the player is not likely to earn. (Note: The 25% rule that is mentioned deals with a rookie not being allowed to receive an annual salary increase of more than 25% of their first year of their contract, unless the salary in question is the league minimum salary for the league year).
The Owners and the Players Association disagreed on how to treat a club’s buyout of a player’s right to terminate in a situation where the buyout is based on incentives that are likely to be earned, and I assume this area will be covered when the CBA is re-done in 2012, if not sooner.
See, that was fun, right?
For more “light reading”, the NFL’s CBA can be found here.
