If you follow football, you might have heard of the term “guaranteed contract.” However, if you’re not familiar with the business side of the NFL, it can be challenging to understand what this phrase actually means. In this article, we’ll dive into what guaranteed contracts are in the NFL and how they work.

What Are Guaranteed Contracts in the NFL?

In short, a guaranteed contract is a type of contract that ensures that a player will receive a specific amount of money, regardless of what happens. In other words, if the player gets cut or injured and cannot play, they will still receive the guaranteed money.

Guaranteed contracts are different from non-guaranteed contracts, which only guarantee that the player will receive the amount of money that is guaranteed in their contract, but not the entire contract value. Non-guaranteed contracts are often used to give teams more flexibility and control over player salaries.

How Do NFL Guaranteed Contracts Work?

Guaranteed contracts in the NFL work similarly to other sports leagues. When a player signs a guaranteed contract, the team guarantees that they will receive a specific amount of money over the length of the contract. This can be paid out in a variety of ways, such as bonuses, signing bonuses, or guaranteed base salaries.

For instance, if a player signs a five-year contract for $50 million with $30 million guaranteed, that means they are guaranteed to receive $30 million over the next five years, regardless of what happens. The remaining $20 million of the contract isn’t guaranteed and can be renegotiated or cut if the team needs to free up cap space.

If a player is injured or cut and cannot play, the team is still required to pay out the guaranteed money. However, if a player violates the terms of their contract, such as getting arrested or not showing up to practices, the team may be able to void a portion or all of the guaranteed money.

Why Are Guaranteed Contracts Important?

Guaranteed contracts are important in the NFL because they provide financial security to players. These contracts ensure that players receive a certain amount of money if they are injured or cut, which is especially important given the physical nature of the sport. Without guaranteed contracts, players’ salaries would be at the mercy of the team, which could cut them at any time without any financial compensation.

Guaranteed contracts also provide stability for teams. When a team signs a player to a guaranteed contract, they know exactly how much money they will be paying that player for the duration of the contract. This gives them a better understanding of their salary cap space and can make it easier for them to plan for future seasons.

Conclusion

Guaranteed contracts are a crucial part of the NFL business landscape. These contracts provide financial security to players and stability to teams, making them an essential tool in the world of professional football. Whether you’re a fan or not, understanding how guaranteed contracts work can give you a deeper appreciation for the inner workings of this highly competitive and exciting industry.