Welcome! Log In Create A New Profile

Advanced

another take on this

February 12, 2020 11:22AM
Quote
dzrams

I'm wondering if this is a situation where the policy was originally put in place to protect the players but now that's been turned on its end and it hurts the players.

I think you're right on the owners' motive for backing the escrow policy being that it functions as a hidden cap on guaranteed money. It probably didn't start out that way though.

I don't know when the escrow requirement (which is called "the funding rule" ) was initiated. It's old though.

Here's another take on all this:

Quote

. [www.hogshaven.com]

The Elimination of the Funding Rule

This should be the shortest negotiation point in the history of negotiations, as it benefits the owners every bit as much as the players.

Article 26 (Salaries), Section 9 (Funding of Deferred and Guaranteed Contracts) discusses the funding rule which is a requirement that any guaranteed, other than injury guarantees, needs to be set aside in an escrow account, by each NFL team. This is one of those rules that has helped prevent players from negotiating guaranteed salaries in future NFL seasons because it requires so much liquidity up front by NFL owners.

There was a time when the rule probably made sense to have. The NFL, after all, wasn’t the billion dollar juggernaut that it is now. There could have been a threat to players accepting deferred compensation or expecting guaranteed salaries to simply have their money vanish if a team was insolvent and incapable of meeting their obligations. Those times have now changed.

Instead of protecting the players the rule has now hurt them as it becomes involved in negotiations. It’s not like you can even argue it to try the force the issue- the rule exists and the only way around it is to use injury related guarantees that vest at a later date, typically starting in the second year of a contract.

Not surprisingly injury guarantees are at an all-time high at around 50% of the contract value of free agent signings. Full guarantees lag under 40%. The funding rule isn’t the only reason why that is the case but it is one of the reasons and one that should be easily eliminated. With that rule eliminated it will at least give the players side of a negotiation a fairer ground to stand on when discussing guaranteed salary rather than simply being told it can’t be done because of the funding rule that is in place.










....



Edited 1 time(s). Last edit at 02/12/2020 11:24AM by zn.
SubjectAuthorViewsPosted

  Something I learned about NFL contracts and guarantees

Deadpool505February 12, 2020 06:22AM

  Re: Something I learned about NFL contracts and guarantees

zn188February 12, 2020 06:30AM

  Wow!

RamUK159February 12, 2020 07:52AM

  Re: Wow!

zn129February 12, 2020 08:05AM

  Agree zn, spanos crying poor is laughable

promomasterj90February 12, 2020 08:33AM

  Re: Agree zn, spanos crying poor is laughable

zn79February 12, 2020 08:49AM

  Re: Agree zn, spanos crying poor is laughable

Ohiorams56February 12, 2020 09:01AM

  Which teams can't afford it? Spanos is worth 2.4 billion

promomasterj31February 14, 2020 09:53AM

  Re: Which teams can't afford it? Spanos is worth 2.4 billion

AlbaNY_Ram29February 14, 2020 11:31AM

  exactly it's cash flow not assets

zn38February 14, 2020 12:21PM

  They don't have to have cash in a bank vault

promomasterj24February 14, 2020 01:14PM

  Re: They don't have to have cash in a bank vault

zn27February 14, 2020 02:13PM

  You think Kroenke has 700 million in cash lying around?

promomasterj34February 14, 2020 03:23PM

  Re: You think Kroenke has 700 million in cash lying around?

zn32February 14, 2020 03:44PM

  Re: You think Kroenke has 700 million in cash lying around?

AlbaNY_Ram31February 14, 2020 04:42PM

  Re: Wow!

dzrams63February 12, 2020 09:12AM

  another take on this

zn58February 12, 2020 11:22AM

  Its funny how that works

Deadpool60February 12, 2020 10:28AM

  Re: Its funny how that works

zn46February 12, 2020 08:45PM

  TO fix This Guaranteed Non Guaranteed - League needs Gurley Rule like NBA Bird Rule

Rams_8149February 14, 2020 04:31AM

  That's not what the NBA Bird Rule is

AlbaNY_Ram50February 14, 2020 07:40AM