Getty 2014: Todd Gurley #3 of the Georgia Bulldogs.
We have known for a few weeks now that Todd Gurley would be joining the Atlanta Falcons. But earlier today it was made officially official.
There were rumors ranging from $5 million to $7 million with zero confirmation as to what Gurley’s contract would be worth. NFL Network’s Tom Pelissero shared the details today.
Falcons’ new running back’s deal looks to be worth $5.5 million guaranteed plus even more, depending on incentives.
On top of that, the Rams still owe Gurley another $5 million for releasing him from a four-year extension a year early.
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Breaking Down NFL Contracts
NFL contracts can consist of various components:
- Salary
- Guarantees
- Options
- Signing Bonuses
- Incentives
I’ll break them down briefly fo you.
Salary
A salary is an amount the player is paid for the year. The salary is added to the cap for that year.
So for Gurley’s one year contract, he’s making $3.5 million this year (well $5.5 with the bonus). If he were to sign a 4-year deal say for $20 million. $20 million would be what you would see flashing all over the news channels, but really he’d only be making $5 million per year. Or the team can split up that $20 million however they need to in four years depending on their cap situation.
Guaranteed Money
Look at guarantee money like this, if the team needed to get out of the contract, what is the minimum amount they could pay them while having them still accept the contract. Teams have the option to guarantee money depending on the level of security and risk that player might be to the team.
The larger the guaranteed money, the more the player likes it, but it also means the player is of higher risk to the team.
So if we look at Gurley’s, he will get at least $5.5 million even if he ends up sucking and sitting the bench for a year. That’s a bad example considering it is a lower number but he’s also only on a one year deal, for now.
Options
Teams can make contract years “team options.” This means the team has a choice of keeping that player for that year or releasing them free of charge. It’s kind of cheating in the sense that the team gains control over players longer but minimize the risk if the player doesn’t live up to expectations throughout his contract. Players usually sign these contracts with a lot of confidence in themselves.
Bonuses
General managers use bonuses to restructure contracts by converting the salary money into bonus money. Bonuses are great because players want money now and not later.
First, let’s look at a signing bonus:
Signing bonuses are fully guaranteed and the cap hit is spread throughout the entire contract. Gurley’s is a bad example since he is on a one-year deal.
So we’ll look at another example:
4-year contract, $5 million salary each year, $10 million bonus
Year 1 – $5m salary, $7.5m cap hit ($5m salary + $2.5 mil from bonus)
Year 2 – $5m salary, $7.5m cap hit ($5m salary + $2.5 mil from bonus)
Year 3 – $5m salary, $7.5m cap hit ($5m salary + $2.5 mil from bonus)
Year 4 – $5m salary, $7.5m cap hit ($5m salary + $2.5 mil from bonus)
Again, just like the salary, the numbers don’t have to even out each year. It can be structured based on the cap situation.
There are also roster bonuses:
This bonus is given if the player is still on the active roster on a certain date in their contract.
Incentives
This is more money thrown at players that can be tied to active games, playing time, or even in Gurley’s case, performance like touchdowns and rushes. Again, the money can be divided up throughout the contract’s life.
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