How Joe Burrow’s contract structure helped the Bengals extend Ja’Marr Chase

The Bengals are going to use the same cash to fund both Joe Burrow and Ja’Marr Chase deals.

There has been no shortage of discussion on the recent huge contracts the Cincinnati Bengals gave to receivers Ja’Marr Chase and Tee Higgins, with the team making Chase the highest-paid non-quarterback in league history and Higgins the highest-paid number two receiver in league history at the time of signing.

However, a topic that has not really been covered is how the contract extension Joe Burrow signed 18 months ago in September of 2023 facilitated the contracts of Chase and Higgins. To understand exactly why that is the case, the first requirement is to take a step back and understand what is known as the Funding Rule in the NFL.

What is the NFL’s Funding Rule in regards to guaranteed money?

The discussion starts with a need for a very basic understanding of Article 26, Section 9 of the 2020 NFL collective bargaining agreement, which in all of its glorious legalese reads: (Author’s Note: Bolding added to relevant portions.)

Section 9. Funding of Deferred and Guaranteed Contracts: The NFL may require that by a prescribed date certain, each Club must deposit into a segregated account the present value, calculated using the Discount Rate, less $15,000,000 (the “Deductible”), of deferred and guaranteed compensation owed by that Club with respect to Club funding of Player Contracts involving deferred or guaranteed compensation; provided, however, that with respect to guaranteed contracts, the amount of unpaid compensation for past or future services to be included in the funding calculation shall not exceed seventy-five (75%) percent of the total amount of the contract compensation. The present value of any future years’ salary payable to a player pursuant to an injury guarantee provision in his NFL Player Contract(s), shall not be considered owed by a Club under this Section until after the Club has acknowledged that the player’s injury qualifies him to receive the future payments. The $15,000,000 Deductible referenced in the first sentence of this Section 9 shall apply to the 2020-28 League Years only. This Deductible shall increase to $17,000,000 for the 2029-30 League Years.

In simple terms, what all of that means is that when teams give out significant guaranteed money in future league years, they must put money into escrow at the time of signing to cover the guarantees. This protects the other owners from having to bail out a team should its owner hand out huge guarantees and then drive the franchise into the ground financially. How this ties back in with the big contracts the Cincinnati Bengals have signed over the past eighteen months comes back to timing.

The Joe Burrow and Ja’Marr Chase timing worked for the Bengals’ coffers

As noted above, the funding rule only requires deposits to cover guaranteed money in future years, as guaranteed salary amounts due in the current league year can be covered out of the revenues teams receive from television contracts and league revenue...