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What Makes A Futures Contract So Special?
Author: Scarinci Hollenbeck, LLC
Date: March 9, 2015
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A variety of contract most often reserved for the depths of NFL news has made waves recently due to an international flair which has led to the question: What is a futures contract and why do teams use it?
The NFL will be getting an Australian infusion next season, at least briefly, with the arrival of National Rugby League superstar Jarryd Hayne in San Francisco. The Parramatta Eels fullback, one of the highest paid players in the NRL, will be moving to California to join the 49ers at the start of training camp on a meager salary with hazy prospects. The 27-year-old superstar will leave the relative comfort and success he has built in Australia for a $100,000 guaranteed futures contract and a sliver of a chance at playing in the NFL. So what is this mysterious contract that Hayne signed? Why is this rugby player on the 49ers’ practice squad all of the sudden?
What exactly is a futures contract?
When a player is signed to a reserve or futures contract, he isn’t being signed to the team immediately. Instead the individual, in this case Hayne, is being guaranteed a spot on the team’s 90-man roster when camp starts at the outset of the next season. This means that Hayne’s contract will kick in March 11, when the 2015-2016 season officially kicks off. Typically, teams are allowed to sign players to futures contracts immediately following the end of the previous season. Because of the delayed kick-off for these deals, a futures contract doesn’t count against the salary cap or 53-man team limit at the time of the signing. Though a futures contract doesn’t count against the salary cap upon signing, once the deal is completed, the individual is taken off the market.
Basically, Hayne is a member of the 49ers. He will be added to the 90-man camp roster at the start of the season and then start competing for a spot on the final 53-man team. He won’t be guaranteed a spot on the roster come September, and for now, Hayne will be making relatively minimal money – especially coming off of a super star rugby contract worth millions – but Hayne is now a lock to be a 49er, at least until he gets cut from the squad or until it is confirmed he has what it takes to play at an NFL level.
Why are these contracts used by teams?
How did Hayne land this deal? Do do you have to play professional rugby to be eligible for a futures contract? Anyone who wasn’t on an active roster at the end of the prior season is eligible to sign a futures contract. This means that individuals with unrestricted free agent status or those who are on a practice squad at the end of Week 17 are eligible to sign futures contracts.
The contracts are typically used by teams to provide peace of mind. For example, the 49ers, as an organization, may have been worried that another team – such as Detroit or San Diego, each of whom were also interested in Hayne – may sign the rugby superstar first. To prevent this, San Francisco signed Hayne to a futures contract to ensure that when practices start up again, Hayne will be with the 49ers.
While controversy has yet to arise out of the signing of Hayne, futures contracts have caused some issues in the past. For example, while players who sign these deals often earn minimal pay, why pay someone who you may cut from the team obscene amounts of money? Since there is potential for them to receive larger contracts, this could cause a bidding war amongst the 32 NFL teams for a practice squad player, which could subsequently throw off the delicate balance that the league has maintained regarding wages for players who don’t regularly suit up for the big games.
You’ll have to show you deserve a spot for a futures contract. Thus far, Hayne, considered one of, if not the best, player in Australian rugby, has shown to be good enough for a spot on the practice squad until he proves he’s talented enough for a larger role. While a futures contract isn’t a guarantee, it is a first step and for many, including an international superstar of a rugby player is good enough.
Have any further questions regarding future contracts?
Feel free to contact NFLPA Certified Contract Adviser Anthony R. Caruso to discuss your questions.
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