Salary Cap Nuggets - No. 6: Split salaries & player "down amounts”

This series is called Salary Cap Nuggets because ‘nuggets’ is such an interesting word in English. It calls to mind chicken nuggets - tasty, bite sized and easy to eat. But it also calls to mind gold nuggets - small, but valuable.

The salary cap is a product of the Collective Bargaining Agreement (CBA), which is a 301-page contract between the NFL Owners and the NFL Players Association. In these articles, I try to explore just one or two small parts of the NFL salary cap defined in the massive CBA. Hence, Salary Cap Nuggets - small, bite-sized, easy to digest, yet valuable information for NFL fans.

The goal is to, one bite at a time, get a clear understanding of the salary cap.

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Injured players don’t always get their normal pay in full

When I was a bit more naive about the NFL, salaries and contracts, I assumed that when players were injured, they didn’t get paid.

Of course, that would be horribly unfair, but I was young and — as I said — naive.

Later, it occurred to me that teams might get some salary cap relief for injured players; there seemed to be a good argument for it. Again, I found that reality didn’t match my expectations.

So, when it occurred to me, one day, that players might get paid less when they’re injured than they do when healthy, I dismissed the thought as being wrong-headed, as well.

It turns out that this idea is not as wrong-headed as I thought it might be, and that — while it doesn’t apply to all NFL contracts — the CBA actually contains provisions allowing teams to reduce pay when a player is injured or otherwise unavailable to play, and defines specific amounts for minimum-salary players.

This type of salary arrangement is called a “Split Salary” contract, and the reduced level of pay that applies when a player is unavailable due to injury or other reasons is referred to in the CBA as the “Down Amount”.

The CBA defines P5 base salary and sets minimums, but says that teams may also negotiate a split salary into a player’s contract.

Split salary is an injury protection for a team

I first learned about split salary arrangements from pages 28 & 29 of Crunching Numbers.

Once a player gets injured during the course of football activity, his P5 base salary for the year is protected for as long as the injury prevents him from playing in the NFL.

Other players may land on various reserve lists...in which they are entitled to salary but are unable to play that week with their teams.

Such players must be replaced on the active/inactive roster, thus making the net salary effect for a team not just the contractual obligation, but also the cost of a replacement player added to that figure.

So, just to make sure that’s clear - injured players (and some other reserve players) continue to get paid their Paragraph 5 Salaries while they are unable to play in games, and continue to be counted against the salary cap. The player, of course, needs to be replaced, and the replacement player also counts against the salary cap.

In an effort to mitigate the cap hit, teams are allowed to create “split salary” contracts that define a “down amount” for the P5 salary, which means a lower salary that is paid to the player for the games he misses while on the reserve list.

Split Salary – “Down Amount”

[An injury to] a rookie... in 2016 could thus cost his team $900,000 (his $450,000 P5 base salary plus a replacement’s $450,000 P5 base salary) in cash and salary cap dollars, which are at a premium in the NFL.

To help alleviate the burden, a split salary reduces a player’s P5 base salary to what’s called a down amount once he lands on a reserve list.

For rookies, this split salary is $333,000 in 2016. For veterans with at least ten years of experience, it can drop as low as $478,000.

As usual, the book is working in 2016 dollars because that’s when it was published. But the numbers for minimum salaries and down amounts are controlled by the CBA and change from year to year.

The following split salary table presents the 2011 CBA (Article 26, Section 1b) negotiated minimum salaries for an NFL player not on a team’s active/inactive list

Minimum Salaries as defined in CBA

I have highlighted the 2019 amounts. You can see that the minimum salary for a 10-year veteran is $1,030,000 which is the amount being paid to Dominique Rodgers-Cromartie in 2019.

• The Redskins currently have 17 players from the 90-man offseason roster earning $495,000, the rookie minimum. These are UDFAs, as draft picks have higher “slotted” salaries.
• The team has another 7 players earning $570,000, the minimum for a player with one accrued season.

Split Salary “Down Amount” as defined in CBA

As you can see, these can be very large financial losses for a player. Not every player has a split salary. They are most common for low-drafted rookies, undrafted free agents, limited playtime expectation signings, injury-prone veterans, and veterans near the end of their careers. For the superstar players, a split salary is never a part of a contract or broached during negotiations.

Example

Let’s look at Dominique Rodgers-Cromartie for an example (I don’t know if DRC actually has a split-salary contract, but he fits easily into the category of player who these contracts normally apply to).

The difference in DRC’s P5 minimum salary of $1.03m and his “down amount” of $523,000 is $507,000.

If we divide this by 17 to find out the effect on his game checks, we can see that, if DRC has a split-salary provision written into his contract, then he would lose $29,823 for every game he spends on injured reserve. Spending, say, 8 weeks on the IR list would cost him over $238,000!

It’s easy to see why teams want this kind of protection in place, but it is hard not to feel at least a little bit bad for a minimum salary player who gets injured, and, in addition to having to face a potentially difficult rehabilitation, may see his paycheck slashed pretty dramatically!

The Crunching Numbers book offers a bit more information on page 80:

Split salaries are common in rookie contracts signed by those in the third round and later, but again it is negotiable.

Teams will push for the first two seasons to contain full split contracts, meaning if at any point in time the player has to move down from the active/inactive roster their salary splits to the down amount.

Good [agents] will get the player the best-case scenario.

• [For example], many teams are willing to concede the splits from two seasons to just one.
• In some cases, the players can negotiate just preseason splits, meaning their full salary is protected if they survive preseason uninjured and capable of playing football.
• It is not uncommon for a contract to contain a full split in year one and a preseason split in year two.
• Some contracts can even be negotiated to contain splits that void if a player plays all of the prior season.

Agents can be creative with these salaries and it can be important to hire someone who knows the tendencies of the teams in regards to these salaries.