what is the purpose of a signing bonus

[snyder55]

I see this in all contract negotiations and wonder what the hell it is, is it just another way of giving a player more money?

[Kruunch]

It’s guaranteed money. Once the player signs a contract, his signing bonus is fully guaranteed. Teams can spread it out for the duration of the contract. Or, give a large sum of it the first year.
In other words. It’s good to be an NFL player.

[GameTime]

helps the cap being able to portion it out if necessary

[snyder55]

its the term "signing bonus" that is a little confusing to me, I've signed contracts and no one ever gave me a bonus ..

[imgrate]

May 31, 2021 15:54:40 GMT -5 Kruunch said:

It’s guaranteed money. Once the player signs a contract, his signing bonus is fully guaranteed. Teams can spread it out for the duration of the contract. Or, give a large sum of it the first year.
In other words. It’s good to be an NFL player.

Minor correction - signing bonus the player gets the cash immediately. The team can and usually does spread out the salary cap impact of the signing bonus evenly over the # of years of the contract.

[imgrate]

May 31, 2021 16:06:34 GMT -5 snyder55 said:

its the term "signing bonus" that is a little confusing to me, I've signed contracts and no one ever gave me a bonus ..

Gotta negotiate one in!

[imgrate]

May 31, 2021 9:39:32 GMT -5 snyder55 said:

I see this in all contract negotiations and wonder what the hell it is, is it just another way of giving a player more money?

Its a way for the team to figure out how they want the money to show up on the salary cap and it gets the player cash upfront.

So for example, say a player signs a contract for 5 years, 100million dollars with no signing bonus. Then the team and player would negotiate what the player's salary would be each year and how much of it is guaranteed. Say the player's base salary is 20million each year, then the player doesn't start getting paid until the season starts and his cap hit every year is 20million.

Now let's say the player gets the same amount of years and dollars, 5 years 100mill. However, the team is strapped for salary cap the first year (much like we were this past offseason). So the team says ok, we'll give you a 19 million dollar signing bonus and a base salary of 1 million in the first year. The player would prefer this deal because he gets 19million immediately, instead of throughout the course of the season. And the team gets to spread out the cap hit of that 19 million evenly over the course of 5 years. So 19 divided by 5 is 3.8million. Then you add the base salary of 1 million, and now the player's cap hit in year one is only 4.8million.

[te88]

It’s basically cash in hand once pen is put to paper.

Teams can manage it so it doesn’t all hit the cap in one year though.

[snyder55]

thanks for the explanation, that clears it up for me...