What is the Veteran Minimum in the NFL?
The veteran minimum salary in the National Football League (NFL) refers to the lowest possible base salary that an experienced player can earn, as negotiated by the player’s collective bargaining agreement (CBA) with the league and the NFL Players Association (NFLPA). In this article, we’ll delve into the details of the veteran minimum salary, its components, and its implications on NFL players and teams.
What makes a veteran?
According to the NFL’s rules, a veteran player is defined as someone who has accrued three or more credited seasons (including seasons in which he has been a member of a team, but was on injured reserve or has missed the season due to a lockout). For example, a player who enters the NFL as a rookie and then spends his next two seasons on the injured reserve is considered a veteran player once he takes the field in his fourth season.
Components of the Veteran Minimum Salary
The veteran minimum salary has two main components:
• Base salary: The player’s salary for a particular season, which can be adjusted upwards or downwards depending on certain factors.
• Practice squad allocation: A designated amount allocated to players who are assigned to the team’s practice squad, essentially serving as a "insurance policy" in case key players get injured.
Formula for Determining the Veteran Minimum Salary
The formula for calculating the veteran minimum salary takes into account various factors, including:
- The team’s adjusted gross revenues (AGR), which are essentially the total revenue from the team’s operations.
- The team’s adjusted operating profit (AOP), which is calculated by subtracting operating costs from AGR.
- The minimum spending floor, set by the league at 89% of AGR. This percentage determines the amount of the veteran minimum salary.
To calculate the veteran minimum salary, the following formula is used:
Veteran Minimum Salary (VMS) = 0.895 * (Total Team Revenue)
As of the 2021 NFL season, the team with the highest total revenue, the Kansas City Chiefs, had a total revenue of $492.1 million. Therefore, using the formula:
VMS = 0.895 * $492.1 million = $4.382 million per player
For the 2021 NFL season, the veteran minimum salary would be approximately $4,382,500.
Adjustments and Exceptions
There are two main types of adjustments made to the veteran minimum salary:
- Injury adjustment: A player on injured reserve (IR) or physical unable to perform (PUP) receives a slight adjustment to his salary. The adjustment depends on the number of seasons the player has accrued. For a third-year veteran, this adjustment would add approximately 3% to the player’s salary.
- Pro-rated incentive: Teams are allowed to pro-rate a player’s salary upwards based on a specific contract provision, providing an opportunity for the team to give more money to a particular player.
There are several exceptions to the veteran minimum salary, such as:
• Tender contracts: Teams are allowed to offer a minimum salary for certain players to retain rights in case a player goes unrestricted free agent (UFA).
• Priorities and compensation: For a player designated as "other than offset" compensation, the player’s new team may adjust the veteran minimum salary based on the initial team’s level of performance in the next season.
• Qualifying offer: For unrestricted free agents (UFA), their prior team offers a specific contract with an adjusted salary, which can be negotiated at the end of the FA process.
Implications and Conclusion
The veteran minimum salary in the NFL is a significant aspect of the league’s collective bargaining agreement. Its calculation formula is designed to ensure fair compensation for veteran players based on team revenues. Additionally, the inclusion of adjustment mechanisms and exceptions provides players and teams flexibility in the negotiations process.