Tuesday, May 22, 2012

NFL Rookie Salaries

NFL Rookie Salaries 

He should be smiling....
First pick of the 2010 NFL draft the St. Louis Rams select Sam Bradford..... and they give him a $50 million dollar signing bonus. In the 2010 NFL draft and years prior, seeing rookies land huge dollars without ever stepping foot on the field was far from uncommon. After the new NFL collective bargaining agreement was agreed upon in the summer before the 2011 NFL season, rookies would no longer be receiving enormous paydays like years past.

Rookie pay was one of the controversial issues that was negotiated between the NFL players association and the owners in the new collective bargaining agreement. The implementation of the rookie wage scale (or rookie wage cap) has changed the way in which the NFL draft works. Reasons for the change in rookie compensation includes risk, balance, and control. In previous years teams would hesitate to draft in the top 10 because they knew it would come with a great financial burden. The risk of drafting someone this high in the draft was an important factor for teams to consider, because a "bust" pick could leave a team in financial ruin. Teams that did not feel like the risk was worth taking, tried to trade down in the draft but few teams wanted to move up. Balance amongst teams also was created with the rookie compensation change. Teams were freed of the worry that another team could outspend them on rookies coming into the league. Control was the biggest reason for change in rookie compensation. Year after year rookies were making more and more guaranteed money and there was no end in sight. To avoid the continuing trend the NFL and teams needed some control, the solution was the rookie wage cap.

How does the Rookie Scale Work?

In the first year of the rookie wage scale (2011) the total maximum dollars that all teams could spend on rookie compensation was $874 million. For all the rookies first year in the league the total limit among all teams was $159 million. Both of these figures would increase with the salary cap. The new mandatory contract lengths were four years for all rookies drafted. The first round players were also guaranteed a fifth year club option in their contracts. The fifth year club option pay would be based on averages of the top 10 players at the position for draft picks 1 through 10. For picks 11-32 the fifth year pay would be based on the average of the third through twenty-fifth best players at the position. All of the fifth year options had to be exercised after the players third year in the NFL.

Good and Bad of the Rookie Scale

With every adjustment made in all aspects of sports, some good and some bad prevail. The good for the rookie scale includes a more competitive drafting process, large savings, and more driven players. The drafting process has been made more competitive with the rookie scale. The theme for this past (2012) NFL draft was trading. Teams were trading picks with each other faster than ESPN could keep up. All of this trading was based on teams feeling that they could take a risk to trade up and not make a financial mistake that could last years. The good continues with the massive savings from this rookie scale. $25 million dollars was saved in 2012 and up to $100 million will be saved in 2014. The numbers are what we love to talk about in the #sportsbiz, but in this case driven players are the biggest asset of the rookie scale. Rookies will need to play if they want to get paid the big money. No more big money will be paid out to players who have yet to play. Another benefit to the rookie scale is the fact that there will be less holdouts. The new rookie scales almost sets a contract that will be given based on where you were drafted. A lot of contracts will be done in a short period of time because the room to negotiate is minimal.

Now time for the bad..... I have put time into considering what could be bad about the rookie scale and I could only come up with one reason.... The rookies will not be collecting a HUGE check without playing a down.

Final Thought
Rookies are deserving to make the most money they can, but when rookies join a team as the highest paid player and they are yet to step on the field, something is not right. The rookie wage scale is and will continue to be a great benefit to the NFL.

Drew Rosen

Follow on Twitter @dmrosen7 

                   Drew Rosen     Follow on Twitter @dmrosen7 

1 comment:

  1. Great stuff Drew. I totally agree that there isn't much bad coming out of this one. And hey, it may even protect the careers of some GMs who would normally throw rookies obscene amounts of money.