Dead Money
“Agent's Take: Some of the NFL's
worst teams have this one thing in
common”
By: Sophia Brown
What is "Dead Money"?
•
Charge on salary cap for a player that has been released
•
Money on the accounting books years later (signing bonus and salary)
Greg Jennings:
$45 million contract &
$10 million signing bonus
In Reality
$45M $10M
Bonus
Salary
$9M
$10M
Year 2
$9M
0
Year 3
$9M
Salary
Bonus
Year 1
$9M
$2M
Year 2
$9M
$2M
Year 3
$9M
$2M
Year 4
$9M
$2M
Year 5
$9M
$2M
Bonus
Year 1
0
On the Accounting Books
Dead Money = Sunk Cost
•
•
Sunk cost:
•
Signing Bonus
•
Guaranteed Salary
Economic cost:
•
High accounting cost
•
Opportunity cost: Less flexibly with roster