Business of Football Mailbag: Insurance on Players, Bryce Young’s Benching and More

Answering your questions on contracts, salaries and the off-field side of the NFL.

Young watches from the sidelines with Andy Dalton playing for the Panthers in Week 3. / Kirby Lee-Imagn Images

We are in the slowest time of the year for the business of the NFL, so I thought it’d be a good time to answer your questions. I put out a call and got a lot of repeat questions, so I’ll answer the most frequently posed ones here.

There were a lot of questions about an ESPN article by Kalyn Kahler detailing insurance and potential salary cap credits. Many have asked about an inside look at this practice. Here’s what I know.

I understand the intrigue about the practice, but to me this is less “buying cap space” than simply a risk-reward analysis conducted by every team on whether paying out large insurance premiums (with non-salary cap dollars) for the sometimes marginal possibility of return of those monies for some future cap relief. A few teams buy policies on several players. Some teams buy policies on their star quarterbacks, but no one else. And some do not enter this market at all. 

The key questions in analyzing this issue of taking out insurance on player contracts are what type of insurance, and what are the cost of premiums? There is PTD (permanent total disability) insurance, in which the premiums are quite reasonable, with payouts highly unlikely (very few players are permanently disabled from playing football).

Then there is TTD (temporary total disability) insurance, which will obviously trigger payouts much more often than PTD. But as you may expect, in a sport with a 100% injury rate, the premiums for TTD insurance are going to be quite high. Several insurance companies will not offer TTD, and the ones that do require potential exclusions for preexisting injuries. Per the article referenced above, TTD premiums to insure a contract of roughly $50 million could cost up to $2 million. And, again, the payout is not as simple as a team getting back money for missed games on a pro rata basis. There are clauses that only trigger claims after a number of missed games, there are deductibles, and there are exclusions and other hurdles. As everyone reading this knows, insurance companies do not part easily with their money.

When I worked for the Green Bay Packers, I purchased PTD policies for a couple of our larger contracts, including Brett Favre’s, but did not see the cost effectiveness of paying high premiums for TTD.

Having said that, if a team and owner’s goal is purely future salary cap credit, regardless of cost, this does have some potential value. Certainly, since my time in the NFL where our cap department was “me,” now NFL team cap departments have two to five people, sometimes more. They have more personnel and more resources to try to separate themselves from other teams; that is why I see this practice may be more popular.

What teams are trying to do is earn future cap credits, similar to other future cap credits albeit in this case “paying” for them. When a player doesn’t earn a workout bonus or an incentive that previously counted against the cap, that triggers a future credit. If a team received monies from an insurance policy, it presented that to the NFL in order to receive cap credit for the following year.

Is this a practice that has been going on for years with NFL teams? Yes. But is it a massive loophole in the cap system? Not really. It’s just a tool that some teams and owners see value in—with a debate as to its cost-effectiveness—as a way to get back some cap room for future years.

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Prescott has set a new bar for quarterback salaries. / Andrew Dieb-Imagn Images

Question: Will there be a “limit” on quarterback contracts after Dak Prescott has now set a $60 million a year annual average?

As discussed here in my last column, Prescott had extraordinary leverage, leverage that he created in 2021 by negotiating a short contract, relative to what we’ve seen from other quarterbacks. But it is important to note that with all of these top contracts for quarterbacks, there are “outs” for the team after two or three years. Even with Prescott, the Cowboys are “only” guaranteeing $129 million “at signing,” with the other guarantees contingent on his being on the roster in ’25, ’26 and ’27.

In other words, NFL owners have imposed their de facto “limit” on these contracts since the Deshaun Watson deal. They lure players and agents into these contracts with big splashy numbers, knowing the later years are not guaranteed, giving them leverage later to move on or renegotiate. And, of course, owners do not have to fund later years and the future risk that comes with that.

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Question: Will we ever see top players receiving contracts specifying a percentage of the cap?

Most NFL teams structure their bigger contracts with lower salaries and cap numbers in the early years, which means cap numbers are very high in the later years of the deals. Were there a requirement to peg each year to a fixed percentage of cap, both teams and agents would be frustrated in structuring contracts to fit that mold. They would have to smooth out the cap impacts and load more cap in the early years in order to balance out the later years. Teams don’t want that, and agents don’t want to sacrifice the puffed-up numbers in the later nonguaranteed years of the deals. The “percentage of cap” arguments ignore the reality of NFL player contract negotiations.

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Question: Are teams paying top quarterbacks hamstrung by those contracts in pursuing Super Bowls?

This as a pet peeve of mine: We need to lose this false narrative about teams not being able to compete for a Super Bowl due to having to pay their quarterbacks $50-plus million a year. Please. Most rosters have 60% to 65% of players on cheap rookie contracts. So if we conservatively estimate players using a $1 million cap number, that represents around $35 million of a team’s cap. So using a $255 million cap, that leaves $220 million of space to pay the other 18 players (understanding injuries and practice squad). 

This is not hard. In fact, it has never been easier to manage a cap and, as detailed above, there are now multiple people in these cap departments working to make sure teams can do what they want with their roster. Let’s put an end to that lazy narrative.

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Question: What are my thoughts on the benching of Carolina Panthers quarterback Bryce Young?

After a rookie season in which Young struggled in leading the worst team in the league to a 2–14 record (he missed one game), I cautioned those wanting to bury him with the “bust” label and, to some extent, I still do. But as it turned out, his new coach, Dave Canales, had seen enough after two games.

Young was the first pick in the 2023 NFL draft, taken just ahead of C.J. Stroud, who has been outstanding with the Houston Texans. Yes, Young is small (5'10" 204 pounds), but we marveled at his weekly heroics at Alabama against future NFL first-round picks. But unlike other smaller quarterbacks with athleticism (Kyler Murray) or escapability (Russell Wilson), Young does not appear to have any special skills at the NFL level.

I know Carolina is an easy target with a disliked owner, but had the Panthers not taken him, Young would have been drafted very soon after the first pick, perhaps second to the Texans. Sometimes franchise-defining decisions are made for teams, not by teams. Would Stroud have flourished on the Panthers? Would Young have been better on the Texans? We will never know, but, as is clear now watching the success of players such as Malik Willis with the Packers and Justin Fields with the Pittsburgh Steelers, organizations do matter.

With the way rookie contracts are front-loaded, Young has already made roughly $25 million of his $35 million guaranteed contract, $24 million of it in signing bonus. Despite some media reports about a potential trade, I don’t think this is the end of the line for Young in Carolina. While the Panthers may have some success with Andy Dalton, he is not their future. I think Young will get another chance.