Loosely following the signing of NFL free agents, a question came up about how signing bonuses are spread over the life of the contract. Is there a limit on the number of years over which a signing bonus can be spread? Otherwise, why wouldn’t every team sign their players to 20-year contracts, and take only a 5% cap hit for the bonus every year?
Because when a player is released from the team, all the remaining prorated signing bonus money comes due against the cap immediately. So, in essence, there *is * a practical limit to how many seasons the signing bonus money can be spread – the number of seasons a team keeps a player on its roster.