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FORMULA 1
Why Guaranteed Isn't Always Guaranteed
![](https://www.spotrac.com/public/img/news-placeholder.png)
There's likely nothing more frustrating to the average NFL fan than trying to understand just how "guaranteed" a player's contract actually is. Unfortunately, the way this is communicated regularly adds to the confusion. Here's a quick breakdown to hopefully help uncover some of the concerns.
Guaranteed at Signing
There's no better place to start with a contract breakdown than this value, as it tells the story of the cash a player will 99.9% earn on the deal. Why not 100%? If a player is suspended for conduct, or has a non-football related injury that keeps him from honoring the contract, teams can void guarantees, or recoup already paid signing bonus. For most multi-year contracts in the NFL, guaranteed at signing will include an initial signing bonus, and any salary or roster bonus due in that first season. For some, the 2nd year salary will also be included in this metric.
Future, but Practical Guarantees
"Ok, so if i just look at the Guaranteed at Signing value, I'll know everything I need to know". Not necessarily. The reason we show two values for guaranteed money within a contract is that often times, future guarantees kick in a year (or even two) early. This is the "Guaranteed Mechanism" buzz phrase you certainly heard plenty about after Patrick Mahomes' contract was signed.
For instance, let's say a player has $15M fully guaranteed at signing, a bonus, a first year salary, and a second year salary. However, the player's 3rd year salary becomes fully guarantees in March of the 2nd year. This is what we classify as a "practical" guarantee, as it's not at all likely that the player will be released out of his contract before that 3rd year salary guarantee kicks in. This is very often also the case for a roster bonus in year 2 or 3 that isn't fully guaranteed at signing, but because it becomes guaranteed or payable in early March, has a practically of earning to it.
Full vs. Injury Guarantees
Lastly, the different between a full guarantee, and a guarantee for injury is very important. Any salary or bonus that is deemed "fully guaranteed" will be paid out to the player regardless of status (with the exception of the suspension or non-football injury as described above). An injury guarantee is simply an insurance policy in the event that a player suffers a football related injury that doesn't allow him to pass a physical once the salary becomes applicable.
Odell Beckham Jr.s 2021 salary is the latest example of an injury guarantee vesting. When OBJ tore his ACL in 2020, nearly $13M of his 2021 salary became essentially vested, as it holds the injury guarantee insurance on it.
Very often, any "practical" guarantees that are not "fully guaranteed at signing" are deemed "injury guarantees" at the beginning of a contract. Those injury guarantees convert to full guarantees on specific days built into the language of the deal (often one of the first 5 days of a respective league year).
CATEGORIES
- NBA 103
- NFL 71
- GOLF 47
- MLB 24
- NWSL 19
AUTHORS
- Michael Ginnitti NFL, MLB
- Keith Smith NBA
- Scott Allen Contributor
- Taylor Vincent NWSL
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2024 NBA Offseason Financials: Oklahoma City Thunder
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Breaking Down Trevor Lawrence's Jaguars Extension
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![](https://d1dglpr230r57l.cloudfront.net/images/crop/4352_USATSI_23335482_168390303_lowres.jpg)
Roundup: NWSL Teams Limiting Exposure to Free Agency
Taking a look at how NWSL teams have limited their exposure to the free agency window.
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NFL Free Agency's Top, Value, & Best Available
The 2024 NFL offseason is now three months old, prompting Spotrac to reflect on the top free agent signings at each position, a newly signed player who may hold significant value for the upcoming season, and a few notable players still available on the open market through the middle of June.
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2024 NBA Free Agents: Top 50
Breaking down and ranking the Top 50 2024 NBA free agents.
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- 1 LeBron James (PF, LAL)
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- 1 NBA Free Agents
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