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FOR USE AS DESIRED PLAYERS BEGIN RECEIVING “PAY FOR PERFORMANCE” NFL players will soon receive their first checks from clubs under the league’s newly implemented “Performance Based Pay” system. When the NFL and the NFL Players Association extended the Collective Bargaining Agreement on January 8, 2002, they created a new supplemental form of player compensation based upon a comparison of playing time to salary. This year, the league-wide fund totaled $15.104 million ($472,000 per team) and will grow to approximately $32 million in 2003. That figure will continue to increase each year of the CBA, which is scheduled to expire in 2008. Players become eligible to receive Performance Based Pay in any season during which they play at least one down of the regular season. The fund that will be distributed to players under the Performance Based Pay system was created by slowing the growth in 1) yearly minimum salaries for all players and 2) the annual entering player pool for rookies. In any given year, the amount of the fund will equal the difference between 1) the new lower minimum salaries and the higher minimum salaries that were in place prior to the CBA extension, and 2) the difference between the new lower entering player pool amount and the higher entering player pool amount that was in place prior to the CBA extension. Under the system, Performance Based Pay is computed by using a “Player Index.” To produce the index, a player’s regular season playtime (total plays on offense, defense and special teams) is divided by his adjusted regular season compensation (full season salary, prorated portion of signing bonus, earned incentives). Each player’s index is then compared to those of the other players on his team to determine the amount of his pay. One hypothetical example is “Player A” in 2002 earning a salary of $650,000, playing in 75 percent of his team’s plays. His bonus would total approximately $30,000. “Player B” has a salary of $6 million and took part in a similar percentage of plays. His bonus would be approximately $2,000. “The Performance Based Pay system is especially beneficial to lower-salaried players,” said NFL Executive Vice President of Labor Relations HAROLD HENDERSON. “Under this system, if a player is making the minimum but plays in a high percentage of his team’s plays, he stands to get a larger payout than a teammate with equal playtime but a higher salary.” Added NFLPA Executive Director GENE UPSHAW, “We shifted money from the projected increases in minimum salary to annual payments based on playing time, a fairer distribution of the money. Pay for Performance rewards players who may be on the bottom of the team pay scale, but play a majority of the games." |