Total compensation in the second year of the NFL’s ‘Performance Based Pay’ system increased by 112 percent to $32 million, the NFL announced today.
When the NFL and the NFL Players Association extended the Collective Bargaining Agreement in 2002, they created a supplemental form of player compensation based on a comparison of playing time to salary.
This year, the fund totaled $32 million ($1 million per team) and will grow to approximately $57 million in 2004.
The $32 million distributed in 2003 was 112 percent higher than the Performance Based Pay of 2002, which was $15.1 million, or $472,000 per team.
The total will continue to increase in each year of the CBA.
The biggest earner in Performance Based Pay last season was Minnesota Vikings safety Brian Russell, who earned $114,258 in additional pay. Clubs have been notified to distribute payments to players.
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 is 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 2003 earning a salary of $600,000, playing in 50 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 $3,000.
‘The Performance Based Pay system is especially beneficial to lower-salaried players,’ says 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 shift 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.’
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