A quick overview of the NFL’s Performance Based Pay bonuses

The legal tampering period of free agency is set to start on Monday, with the true commencement of free agency coming on Wednesday at 4 pm New York time, but for right now let’s talk about the performance based bonuses that are available to NFL players.

Last Wednesday, Eric Winston authored a very short Twitter thread about bonus money that gets paid to NFL players on top of their regular earnings, and which does not count against the salary cap. Winston’s name may be familiar to fans of the Seattle Seahawks because of his play with the Arizona Cardinals in 2013, most notably a run play on which he was reduced to splatter on Kam Chancellor’s visor.

Yes, that one.

In any case, I’ll allow Winston to take over from here, and jump in for further explanation in the middle.

That’s pretty self explanatory, as the $188.2M of the salary cap is not the only money the players get. Obviously there are benefits and lot of other stuff on top of that number, and it’s why an NFL team receiving $255M from the league’s shared revenue pool isn’t simply able to pocket the difference.

So, there’s a performance based pay pool for players who outperform their contracts, but pay particular attention to how they have to outplay it - playtime. That is important and I’ll be rounding back to this point again before I finish up.

So, there are actually two separate pools of money that go towards players that outperform their contracts, which is great for younger players on minimum salary, or near minimum salary, contracts that outperform their contracts. However, let’s loop back to how the league evaluates how a player outperforms their contract.

As Winston notes, the money in these pools is for players who “outperform their contracts through playtime”. These funds are not allocated on production or based on awards, they are based solely on playtime, and that creates a situation where a disproportionate amount of money is distributed based on one factor - snaps played.

That is obviously an issue when measuring performance for a single season, as it is the same discussion that gets had when looking at AV over a small period of time. AV is a fine metric to use when the time period over which performance being measured is at least several years. However, when the time period being measured is a single season, AV becomes more subject to other variables that are far less indicative of a player outperforming their contract.

For a demonstration of this, let’s take a look at the 2018 Seahawks and three young players on their rookie contracts, running back Chris Carson, tackle George Fant and cornerback Tre Flowers. They were all key contributors in 2018 and played a role in making the season as successful as they were, but here is a look at their snap counts over the course of the year.

So, when measuring for which of these players outperformed their contracts, Flowers played more snaps than both Fant and Carson combined. Does that mean that Flowers outperformed his contract by as much as Fant and Carson combined to outplay their contracts? In pure performance value, my guess without running any kind of analysis would be no simply based on the fact that Carson finished in the top 5 in the NFL, and Fant certainly contributed at some level.

However, that’s not how the NFL defines “outperform” for the purposes of these incentives, and thus the recipients of these bonuses are far more likely to be from certain position groups, specifically offensive linemen, defensive backs and quarterbacks. To that end, in 2017 of the top 25 recipients of the largest bonuses for Performance Based Pay, 19 played offensive line, defensive back or quarterback. In 2016 it was 20 of the top 25 recipients who played in one of these three position groups.

That does not mean that running backs and wide receivers get left out completely. They certainly still earn these bonuses, they simply don’t earn bonuses which are quite as large simply because at positions where players are rotated more often and snap counts are lower, they don’t see enough playing time to compete with players who are put on the field to play every snap.

Just to give an idea of how lucrative these bonuses can be for players, we’ll take a look at Dak Prescott of the Dallas Cowboys. Prescott, of course, is the starting quarterback, and his rookie contract has allowed the Cowboys cap flexibility and extra space that they have not had for some time. So, here’s his rookie contract as a fourth round draft pick from 2016 per OverTheCap.com.

Now, if I can get sidetracked for a moment, what makes Prescott a perfect example to study for cap purposes is that 2019 base salary of $2,025,000. That base salary may jump out to some fans as identical to the salary for an original round tender for a restricted free agent, and that’s because it is. Having been the full time starter for the Cowboys for all three of his seasons in the NFL, Prescott qualified for the Proven Performance Escalator, a subject I covered earlier this offseason.

That said, let’s get back to how much Prescott has earned in his career. He received a $383,392 signing bonus when he signed his rookie contract in 2016, and he’s earned three years of base salary. Combining all those together, he’s at $2,003,392 in earnings through the first three years of his career.

However, that excludes any money he might have made through either of these bonus pools. Thus, turning to the NFL’s press releases about the players who earned the largest performance based bonuses in 2016 and 2017, we can get a more complete picture of how much money he has made playing for Dallas. Here is how much he has made from these two bonuses during his first few years in the league.

The reason 2018 is left with question marks is because these numbers have not been released by the league just yet. The NFL has traditionally released these numbers on the last day of the league year, which for 2018 means we should expect them sometime before 3:59 pm New York time on Wednesday, and they’ll largely get lost in the frenzy that comes with the start of free agency.

However, since Prescott played every single snap of every single game, and the metric used to measure outperformance for the distribution of these bonuses is snap count, then it seems likely that Dak will once again be at or near the top of the league in terms of PBP bonuses. It’s likely that his 2018 bonus should be in the same range as each of his 2016 and 2017 bonuses, and should land him somewhere in the neighborhood of just over $1.1M in PBP bonuses earned through the first three years of his career. Thus, while he has been one off the lowest paid starting quarterbacks in the NFL the past three seasons, he will have made about 55% more than his cap hits would indicate.

That said, an extra $1.1M over three years is a drop in the bucket compared to the money he will command the instant he signs his next contract. However, for other players at other positions, such as Tre Flowers, Shaquill Griffin, Tedric Thompson, Quinton Jefferson and the other Seahawks who are in line to earn nice bonuses based on their playing time, it likely carries a lot more weight.

For fans who are interested in learning more about the specifics of how the NFL calculates the bonuses, you can read about it here, where the methodology is explained through a simplified example.