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Explaining the NFL's Performance-Based Pay Program

Last week, the NFL released the player payouts in the league's performance-based pay program. What is it, and which Browns players earned the most for the 2015 season? Read on to find out.

Last week, the NFL announced that it doled out over $121 million in performance-based pay for the 2015 season. Based on an over a decade-long agreement made between the NFL and the NFLPA, each of the league’s 32 teams received $3,802,500 to mete out between all of their players. But what exactly is performance-based pay and how does it affect the Cleveland Browns’ salary cap?

It doesn’t. The league and the Players’ Association have made sure that the money in the performance-based pay program comes from the leaguewide pool of salary cap money before it is divided and distributed to teams. This way, teams don’t have to account for an ever-growing chunk of money taking away their cap space, nor have the opening to manipulate contracts and playing time of their players in order to effectively game the system.

That doesn’t exactly answer what the performance-based pay program is about, though. Every player on a team’s roster receives cash from it, but lower-paid players generally receive the most. This is because the program was designed to provide extra money to players earning at or around minimum salaries and whose playing time is out of proportion with that salary. Every player who is on the field for even just one regular-season snap gets cash from the program, relative to their salary cap figure and playing time. High number of snaps plus low salary figure will equal more performance-based money to that player after the season. Base salary isn’t the only thing taken into account: a player’s performance-based earnings are determined by totaling the snaps he played then dividing that by his total regular-season pay, which includes salary, prorated signing bonus and other incentives earned and then comparing that number to those of his teammates.

The Browns’ highest earner in performance-based pay for the 2015 season was safety Jordan Poyer. Poyer had total compensation last year totaling $591,240 but played 46.8 percent of the team’s defensive snaps, giving him a bonus from the pool of $192,734.32. The other top earners were cornerback K'Waun Williams, with a bonus of $190,519.12 (2015 earnings of $510,000), receiver Travis Benjamin, with a bonus of $184,189.25 ($779,250 earnings), linebacker Armonty Bryant, with a bonus of $180,842.47 ($601,375 in earnings) and linebacker Christian Kirksey, with a bonus of $180,558.10 ($707,625 in earnings). 

You can see how teams would be able to manipulate the amount paid out in performance-based pay if it came out of their own cap space. Higher-paid players could get more playing time simply to limit the amount of performance-based pay they would have to pay out. By having this process centralized by the league and the NFLPA and taken off of the cap pool before it is divided up to teams, it remains a fair and objective practice to reward players who outperformed their pay grades.

This is different from other playing time incentives that are often built into players’ contracts. Those, divided up into LTE and NLTE (a.k.a. likely to be earned and not likely to be earned, respectively), come off of a team’s salary cap when earned. As noted in columns past, LTE incentives are counted against the team’s salary cap immediately and included in a player’s total cap hit for the season. The NLTE incentives, meanwhile, do not count against a team’s cap unless they are, in fact, earned—though again, they aren’t “likely to be.” Still, teams must hedge towards that money being earned so as to not get into a salary cap conundrum at season’s end, so that cash is typically saved and earmarked for such a purpose. It also must be noted that not all contract incentives are of the playing time variety, though it is the most common incentive written into players’ deals. Others include yardage and receptions benchmarks, such as what was written into now-former Browns receiver Dwayne Bowe’s contract, which was worth $250,000 annually. Granted, he never reached that benchmark and did not earn that money following the 2015 season; however, he did get money out of the performance-based pay pool, to the tune of a meager $2,846.14.

Though not directly related to the Browns’ salary cap spending, understanding the what, the why and the how of the program provides greater understanding of how NFL players can be compensated. And it is also worth noting that as the cap rises on a yearly basis, so does the amount each team is granted to hand out to their players, which means even greater incentives exist for those earning little more than the minimum for their position and veteran status in the league. Higher-paid full-time starters aren’t left out of the opportunity for rewards, but those in the financial margins like Poyer and Kirksey can receive fair compensation for outperforming playing time expectations on the field.

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