Understanding NFL contract terms: Signing bonus, guaranteed money and more

Let's take a minute to learn about a few important contractual terms that will be popular this spring in the NFL.

In this photo illustration, a person is seen holding 100, 50...
In this photo illustration, a person is seen holding 100, 50... / SOPA Images/GettyImages

Each spring, the 24/7 frenzy of NFL coverage takes a bit of a nerdy turn as teams begin the role of roster construction for a new league year. With free agency involved as one of the primary pillars of this process, it means that NFL contracts—and our ability to understand them—become a significant part of our experience covering the league.

While video games like Madden might allow us to construct rosters with relative ease, the truth is that building a winning roster is akin to threading a financial needle. Teams need talent and depth and a mix of cost-controlled assets along with more expensive and productive veterans.

As another round of free agency hits, we thought it would be important to cover some important contractual terms that are used often in NFL news during the offseason.

What is guaranteed money?

In NFL contracts, guaranteed money refers to the portion of a player's contract that is guaranteed to be paid to them, regardless of whether they are cut or released by the team before the contract expires. Guaranteed money provides financial security to the player and is often a key factor in evaluating the true value of a contract.

Last year, the Kansas City Chiefs' biggest signing in free agency was right tackle Jawaan Taylor to a four-year deal. The contract was typically announced as an $80 million deal, but the truth is that only $60M of it was guaranteed.

What is a salary guarantee?

Guaranteed money can come in various forms, including guaranteed salaries, signing bonuses, and roster bonuses. A salary guarantee is the portion of a player's base salary that is assured, meaning the team is obligated to pay it to him, even if he is no longer on the roster.

What is a signing bonus?

Players often receive a lump sum payment upfront as a signing bonus. This amount is guaranteed and prorated over the life of the contract for salary cap purposes. Even if a player is released, the team cannot reclaim the portion of the signing bonus that has already been paid.

What money is non-guaranteed for NFL players?

It's important to note that not all money in an NFL contract is guaranteed, and the non-guaranteed portions may be tied to performance incentives or other conditions. Just this past season, for example, Chiefs defensive star Chris Jones was given several lucrative incentives tied to both individual and team performance.

Understanding guaranteed money is crucial for both players and teams during contract negotiations. Players seek higher guaranteed amounts for financial security, while teams may structure contracts to manage salary cap implications and minimize financial risks. A good team finds a way to reward players and keep them happy while maintaining flexibility.