Every year as the NFL trade deadline nears, we speculate about player trades. And every year, the trade deadline comes and goes with almost no action. To many, it seems odd that the NFL has not embraced trades the way other leagues have. Bad teams in other sports become sellers, and the trade deadline presents an option for teams to get out of bad contracts or receive something in return for players who may not be in their future plans. The NFL trade deadline, which this year is Tuesday at 4 p.m. ET, would seem to be a perfect opportunity for teams to acquire draft picks. But there are certain reasons why the NFL finds it difficult to trade players. The standard NFL contract in general is not conducive to trading in the salary cap world of football. Most teams follow a standard protocol when it comes to negotiating a contract structure. A player often receive a signing bonus when he agrees to a contract. The signing bonus is a large payment, often a percentage of the total contract value. For accounting purposes, the maximum amount that counts on the cap in a given season is one-fifth of the bonus, so it allows teams to prorate the costs and lessen the salary cap impact of a contract. These bonuses can be as large as $30 million for a superstar quarterback and around $10 million for a decent starter at other positions. In terms of salary cap impact, a trade is essentially the same as releasing a player. If a player is traded at the deadline, all future prorated money will accelerate into the next season. For some teams, that takes certain players off the table if their signing bonuses and other prorated bonuses were large. In general, if a player’s dead money charge in a given year will prevent them from being released the following year, it will also prevent them from being traded during the given season. The signing bonus also presents a major psychological barrier to trading. The “sunk cost trap” is something we all fall into in our daily lives. If you feel you already paid a large amount of money for something that no longer does the job you expected, you still try to fix it and make it work because you paid so much. Imagine paying somebody $20 million in a given year for a five-year contract and by the next year sending the balance of that contract to another team. In essence, you are handing that team $16 million of your money in return for a third-round pick. A general manager looks bad in that scenario.
Why NFL trade deadline does not produce NBA-, MLB-like blockbuster deals
Sporting News | Oct 30