Economic crisis prompts some teams to push back bonus payments

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Free agency is proceeding, with teams negotiating tentative deals to be signed when the league year officially begins on Wednesday at 4:00 p.m. ET. But world events are creating one specific complication: Some owners are getting shorter on cash.

Per a league source, multiple owners have instructed front-office staff to defer signing bonuses as long as possible. Although signing bonuses are earned when the contracts are signed, teams usually pay the signing bonuses in installments, with some of it paid not long after the contract is executed and other amounts pushed down the road. Currently, some teams are trying to make that road even longer.

While the money has been earned and will be paid, the player loses access to the money and the ability to spend it or to earn interest on it. (Given the current climate, the inability to invest it may not be a bad thing.)

Some teams, like the Raiders, are paying no signing bonuses at all. They did the same thing last year, but tackle Trent Brown received a cap-chewing $10 million roster bonus not long after signing. This year, it’s believed that the Raiders won’t be making any significant lump-sum payments at or about the time contracts are signed.

2 responses to “Economic crisis prompts some teams to push back bonus payments

  1. Advantage to richest ownership if this is the case. Letting players know you are willing to give bonus money immediately should sway some. This seems to be a loophole that the owners should have addressed in the CBA. Only 10% of contractual guaranteed money can be signing bonus, for example.

  2. “(Given the current climate, the inability to invest it may not be a bad thing.)” – MF

    On the other hand it may be just the opposite. It may be a very good time to invest. The market will turn. The key is “when” and it’s much better to have that cash in-hand and ready to invest the moment it starts to turn. Many of these guys, especially the lower tier (pay-wise) players could potentially set themselves up quite well for life after the NFL if they are willing to invest it now (relatively speaking) when they can get much more for less.

    Yes, we are in a never-seen-before situation, from an investment perspective, but the same was true during the 2008 crash, during the 9/11 crisis, and other times in history. And the market has always come back stronger than before. Right now everyone is reacting emotionally to everything from toilet paper to investments. When the emotions settle the tide will turn favorably. And if it doesn’t then what does matter anyway? We’ll all be on our own! 🙂

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