A roster bonus is a feature that may be included in a professional
sports
Sport pertains to any form of competitive physical activity or game that aims to use, maintain, or improve physical ability and skills while providing enjoyment to participants and, in some cases, entertainment to spectators. Sports can, th ...
player
contract
A contract is a legally enforceable agreement between two or more parties that creates, defines, and governs mutual rights and obligations between them. A contract typically involves the transfer of goods, services, money, or a promise to tran ...
.
A roster bonus is conditional, unlike a
signing bonus
A signing bonus or sign-on bonus is a sum of money paid to a new employee (including a professional sports person) by a company as an incentive to join that company. They are often given as a way of making a compensation package more attractive ...
. The latter is received upon the initial signing of the contract and is generally the player's regardless of future events. The roster bonus, however, is paid only if a player is still on the active roster of the team at a specific future date. This feature is mostly used in
North America
North America is a continent in the Northern Hemisphere and almost entirely within the Western Hemisphere. It is bordered to the north by the Arctic Ocean, to the east by the Atlantic Ocean, to the southeast by South America and the Car ...
in
National Football League
The National Football League (NFL) is a professional American football league that consists of 32 teams, divided equally between the American Football Conference (AFC) and the National Football Conference (NFC). The NFL is one of the ...
contracts. Most NFL roster bonuses have trigger dates of either March 1 or June 1 of a specific future year. If the player is on the team's roster as of that date, the entire amount of the bonus must be paid, even if he is released the next day.
The roster bonus has a very specific effect on a team's "
salary cap
In professional sports, a salary cap (or wage cap) is an agreement or rule that places a limit on the amount of money that a team can spend on players' salaries. It exists as a per-player limit or a total limit for the team's roster, or both. Sever ...
," the amount of its payroll that counts toward the money permitted by league agreement. Unlike a
signing bonus
A signing bonus or sign-on bonus is a sum of money paid to a new employee (including a professional sports person) by a company as an incentive to join that company. They are often given as a way of making a compensation package more attractive ...
, the amount of a roster bonus is not prorated over the lifetime of a player's contract. Thus, roster bonuses are often used by teams that prefer to front-load the salary cap impact of a contract and lessen the impact on future years. In other cases, large roster bonuses are not truly intended by the parties to be paid, but rather to create a virtual deadline by which a team will either cut the player or renegotiate their contract.
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References
{{DEFAULTSORT:Roster Bonus
Terminology used in multiple sports