Guarantees For NFL Undrafted Free Agents Have Skyrocketed 593%!
What was once a quiet portion of the NFL draft cycle has now become the wild west of NFL rookie contracts. Undrafted Free Agents (UDFA) are players signed by NFL teams after the conclusion of the NFL draft.
A frantic bidding war, where players/agents and NFL teams must make quick, decisive decisions, begins the second the NFL draft ends. An offer from a team may last no longer than a phone call before the direction shifts.
The contract guarantees for undrafted free agents have skyrocketed in recent years. A few undrafted rookies will earn a larger guarantee than that of a player drafted in the 7th round. One limiting factor is that the amount of money available per team for signing bonuses is locked each year by a pool amount.
Teams have shifted their approach by offering large base salary (P5) guarantees to prospective players. The large guarantees are used to entice the players to sign with the team.
From the team's perspective, this can count toward a potential prepayment for a 69-man roster spot. Let’s explain.
Historical Guarantee Increases
(data sourced for 2016 through 2024)
For context, dating back to the 2016 league year, the average total guarantee per UDFA signed was $8,972. Fast forward to the 2024 league year, and that total guarantee number was $62,199. A massive 593% increase over 8 years.
The total amount of guaranteed P5 across all 32 teams has now exceeded $20 million (for the 2024 league year).
The average guaranteed P5 across all 32 teams has spiked to over $600,000. The drastic difference from 8 years prior.
Pre-Payment Methodology
Historically, 28% of of UDFA’s make the same team’s week 1 practice squad. This number has increased since the inception of the 2020 collective bargaining agreement to over 32%. One reason for this increase is that the CBA locked in practice squad salaries in 2020. Teams no longer have the ability to offer higher salaries to entice players to sign to their practice squad.
To counter this, teams are offering larger P5 guarantees in lieu of larger salaries.
NFL teams are now viewing the large P5 guarantee package as a pre-payment for practice squad salaries. When a UDFA receives a three-year contract that includes a guaranteed salary, that guarantee has offset language attached.
Offset language essentially means if a player earns cash from another contract, any cash earned would offset what the previous contract paid out.
For example, Player A receives a three-year UDFA contract with a $10,000 signing bonus and $180,000 P5 guarantee for the 2026 league year. The player is waived at the end of training camp and re-signed to the team’s practice squad. The player’s salary for the practice squad in 2026 is $247,500. However, the team will only pay a total of $257,500 (including the aforementioned signing bonus) for the player to remain on their practice squad for 18 weeks. The player does not earn $190,000 + $247,500. The amounts paid offset each other.
In short, the guarantee attached to the original contract could be viewed as a pre-payment for the player’s practice squad salary. A similar reaction would apply if the player were waived and signed with another team’s practice squad.
With this methodology, teams are now more inclined to offer large salary guarantees up front, knowing the total cash outlay for the season is not overly affected. Teams can no longer offer higher base salaries to entice UDFA’s to their organization, and signing bonuses are limited in availability due to restrictions on the signing bonus pool.
To counter this, teams are offering large P5 guarantees to prospective UDFA’s, knowing that the guarantee could cover the player’s salary for the season while on their practice squad.
A few teams have continued to avoid this methodology because it conflicts with their contract structure and standards. Teams such as Pittsburgh, Green Bay, and Cincinnati (generally) do not provide guaranteed salaries with UDFA contracts. Below are a few examples of the high-end and low-end guarantees given during the 2024 league year for UDFA’s.
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