Incentives

All incentives are included in team salary if they are deemed "likely to be earned" (LTBE). LTBE incentives are performance levels that the player or team has reached in the previous year. The most common LTBE charges are Off-Season Bonuses, Roster Bonuses and Reporting Bonuses.

Conversely, if a player did not reach the performance incentive in the previous year, the incentive is deemed "not likely to be earned" (NLTBE) and is not included in team salary.

To determine whether a clause is LTBE or NLTBE for Salary Cap purposes, it is necessary to look at the performance of the team in the prior season, not the current season.

LTBE incentives are charged to the cap by the NFL based on the actual statistical performance that the player or team has reached in the previous year. For example, a player may have an incentive for $100,000 for every season he is credited with 10 or more Touchdowns. If he had eight touchdowns in 2003, then the NFL will not charge the team with a LTBE amount of $100,000 in 2004. However, if the player is scores 11 TD's in 2004, then there will be a $100,000 LTBE charge for 2005.

Most teams avoid the LTBE incentive charges by tying them contractually to team improvement categories, so that they are deemed "Not Likely to Be Earned" (NLTBE) by the NFL Management Council. Only eight team categories can be used for veterans, while rookie contracts are limited to three team categories.

A typical player incentive may read:

"If Player participates in 75% or more of the offensive plays, excluding special teams, during the 2004 Regular Season, AND in the same Regular Season, the team improves its [1] ranking in the NFL or [2] ranking in the Conference or [3] team's actual statistical performance over the prior year in:

(a) Net difference takeaways/giveaways, or
(b) Points scored by offense, or
(c) Touchdowns scored by offense, or
(d) Total offense (net yards), or
(e) Sacks allowed, or
(f) Wins, or
(g) Average net yards gained per rushing play, or
(h) Average net yards gained per passing play

then Player shall receive a bonus of $25,000.00"

At the end of the year, each team reports what each of its players actually earned to the NFL Management Council. All incentives -- likely and not likely to be earned -- get reconciled at the end of the year and every team has its own, unique 'net cap' for the next league year