What would you do with Peyton Manning?

How does the NFL Salary Cap treat cash incentives?

Answer: All incentives are included in team salary if they are "likely to be earned" (LTBE). LTBE incentives are performance levels that the player or team has reached in the previous year.

For example, if a quarterback threw twenty touchdowns last year and his incentive clause for this year is set at fifteen touchdowns, then this incentive is “likely to be earned.” Also, incentives that are in the sole control of the player, like non-guaranteed reporting bonuses and off-season workout and weight bonuses, are considered LTBE.

An impartial arbitrator will hear disputes between the owners and the players concerning what should be considered LTBE (especially for rookies or veterans who did not play in the prior year). 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 (i.e., not whether the player actually earned the incentive), it is necessary to look at the performance of the team in the prior season, not the current season.

For example, assume Player X receives an incentive bonus if he participates in 50% of the team’s offensive plays this season. Assume further that last season the team had 1,000 offensive plays. Therefore, as soon as Player X plays in 500 plays in the current season (or 50% of last year’s 1,000 plays), the incentive will be considered earned for Salary Cap purposes.

The same incentive is considered "not earned" if the same player in the current year only participated in one of the team’s first 502 offensive plays. In this situation, it would be impossible for the player to achieve the 50% incentive based on last year’s performance of 1,000 plays. It is important to remember that looking to last year’s performance level is only for Salary Cap purposes and will not affect the player's right to receive a bonus for his performance in the current year.

Chucky the tree wrote: »

Here's what I could find on the incentives issue