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I understand why a star player might take a reduction in pay to ease the team's salary cap situation, allowing it to get better players to help the team win and get him more endorsements.

However, I don't get why just any player under contract would take a pay cut at the request of the team. What provisions may lie in a player's contract if his performance isn't up to the team's expectations?

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Wouldn't the logic you use in the quarterback situation apply to any position? –  user647 Mar 7 '13 at 6:21
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I changed the term to "star player" in the question. I'm trying to distinguish the situation where the player is taking a cut to help the team win more games from the situation where the team asks for the pay cut because they don't believe his play lives up to expectations of his contracted salary –  Nathan Adams Mar 7 '13 at 11:54
    
This is not really a full-fledged answer but have you considered "avoiding disciplinary action"? In football (and here I mean soccer) clubs with economic problems do ask players to accept contracts with lower wages, and if a player isn't co-operative he might be left out of squad for an extended period. That looks bad on a player's profile, not to mention that you lack match fitness (physically and mentally) after being left out for too long. –  posdef Mar 7 '13 at 12:19
    
@posdef more likely in the NFL it's to avoid getting cut altogether. –  wax eagle Mar 7 '13 at 18:44

2 Answers 2

up vote 4 down vote accepted

Let's examine the recent 6-year, $120.6 million contract (with $52 million guaranteed) for Baltimore Ravens QB, Joe Flacco.

  • 2013: $29 million signing bonus, $1 million base salary (guaranteed)
  • 2014: $15 million option bonus (guaranteed), $6 million base salary
  • 2015: $7 million option bonus (guaranteed), $4 million base salary
  • 2016: $18.2 million base salary
  • 2017: $20.6 million base salary
  • 2018: $20 million base salary

In 2013, Flacco's is responsible for $6.8 million (about half of Tom Brady's 2013 number of $13.8 million) toward the salary cap. By his fourth year (2016), this number jumps to $28.55 million.

Flacco's agent, Joe Linta, states, "We really viewed this as sort of a three-year deal to make sure the first three years Joe was paid accordingly with the top guys in the league." This gives Flacco his portion, but this also gives the Ravens flexibility to lower the team's salary cap, make other transactions, restructure Flacco's contract, etc. "Depending on the salary cap, that's what will determine when [Flacco and Linta] get to the fourth year, what [the Ravens are] going to have to do."

An NFL player under contract would "accept" a cut in pay because their whole contract is not guaranteed. Tom Brady, Ben Roethilisberger, and Michael Vick all have restructured their contracts during the 2013 offseason to provide more cap space for their team, potentially lengthen their stay on their team, and receive guaranteed wages (signing bonus, etc.). In Vick's case, his restructuring may have kept him on the team...but perhaps for only a year based on his performance.

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Right. Most likely the Flacco contract will be restructured in 2016 and if Flacco doesn't want to resign for a lower cap number the Ravens will cut him. –  wax eagle Mar 7 '13 at 18:46
    
This contract is crazy, it's like a roller-coaster ride with the salary going up and down in a seemingly random way. Why would anyone offer/accept a deal like that? –  posdef Mar 7 '13 at 18:52
    
@posdef The .6 was put there, most likely, to ensure Flacco is the highest paid QB in the NFL per year ($20.1 mil to Drew Brees's $20 mil). The offer was to get Flacco guaranteed money and the accept was to keep their franchise QB. Anything could happen within three years, and if the Ravens choose to part ways with Flacco by 2016 (as waxeagle states), they can without any strings attached. –  edmastermind29 Mar 7 '13 at 19:00
    
Consider Peyton Manning's contract. No bonus. $18 mil base salary the first year ('12). $20 mil base salary in years 2 and 3 ('13-'14) if Manning is on the roster by the end of the '12 NFL year (If Manning suffers a neck-related injury in '13, he does not get $20 mil for '14). $19 mil base salary for year 4 ('15) if he's on the roster by the end of the '14 NFL year. $19 mil base salary for year 5 ('16) if on the roster by end of '15. This gives the Broncos a lot of outs if Manning can't hold up. –  edmastermind29 Mar 7 '13 at 19:04
    
Ahh, the fact that the whole contract isn't guaranteed is what I was missing. I've certainly heard that "NFL contracts aren't guaranteed" like some other sports, but I hadn't thought about the practical consequences –  Nathan Adams Mar 8 '13 at 0:12

They threaten to cut you. Alot of the money they want to cut is not guaranteed. Most contracts include 'no double dipping rules'.

Let's say a player is due $5m, but only $2m is guaranteed. The team wants to pay him $3m. If he is cut, he gets $2m. So if he signs a $2.5m contract with another team, the $2m the old team owed him will not get paid on top of this.

It looks like teams tend to 'backload' contracts, so players get a big signing bonus. They then sign a 7 year deal. This spreads the signing bonus hit against the cap over 7 years. The closer a player is to the end of the contract, the easier it is to cut them, because if a player is cut, the remainder of the signing bonus that has not hit the salary cap moves to the next year. So there is no security. So players want very large numbers at the end of the contract (which are not guaranteed) and often come with 'roster bonuses' (money paid if you are still on the roster by a certain date. This forces the team to make a decision earlier rather than later about what they want to do with the player. If a player is going to be cut, its best to be cut early so that the other teams still have salary cap space left.

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