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NFL rookies accepting lower pay for future payoff
The Washington Post presents a comprehensive piece relating how the new rookie pay scale exactly works, it's implications and what effect it has already made this year.
By Mark Maske, Published: August 6
When Cam Newton, the Auburn quarterback chosen with the top overall pick in April’s NFL draft, agreed to his first contract with the Carolina Panthers nine days ago, the money didn’t set any records or cause any jaws to drop around the league.
And that is precisely what the sport’s leaders had in mind when they crafted a new rookie pay system as part of the labor agreement between the league and the players. The system went into effect immediately and appears to be working as intended — with this year’s rookies agreeing to deals worth a fraction of the value of contracts signed by last year’s first-round picks, and getting to camp on time.
“We were hoping for certainty of cost, for a redistribution of some money to veterans, and for simplicity of contracts,” said Atlanta Falcons President Rich McKay, chairman of the NFL’s competition committee. “I think we’ve seen all of that accomplished this year. We were also hoping to eliminate holdouts.”
By Thursday, every first-round draft pick had signed a contract.
Most of the top rookies seem to have accepted their financial fates with little more than a shrug of the shoulders, at least in public. However, agents negotiated fully guaranteed contracts for many of the first-rounders, managing to gain a measure of security for players even though the value of the deals has dropped sharply.
The league made curbing the amount of guaranteed money in contracts of top draft picks a priority in the labor negotiations, contending that the deals given to unproven players had gotten out of hand and the money should be diverted to veterans. The players’ side consented to the concept but negotiated a system less restrictive than the one the league originally proposed.
“I think long term it’s better for the game of football,” agent Blake Baratz said. “You’re not going to say it’s better if you’re working on the players’ behalf. But the contracts had gotten out of control. . . . It was handcuffing your team, handcuffing your salary cap.”
Newton’s four-year, fully guaranteed contract with the Panthers is worth a little more than $22 million. The top overall choice in last year’s NFL draft, quarterback Sam Bradford, signed a six-year contract with the St. Louis Rams worth $78 million, $50 million of it guaranteed.
The top ten picks in this year’s draft will receive about $170 million guaranteed, down from about $310 million in the deals last year.
“Both of the parties had a common goal and the system has, at least in the first year, accomplished what we thought it would,” said Peter Ruocco, the NFL’s senior vice president of labor operations. “I’m sure both sides are also happy to be looking at seven-page contracts instead of 70-page contracts.”
Under the new system, rookies sign four-year contracts (undrafted rookies receive three-year deals). Contracts for first-round picks have an option for a fifth season, which a team must exercise after a player’s third NFL season.
For a top-10 draft choice, the fifth-season option is for a salary equal to the average salary of the 10 highest-paid players in the league at that position. For other first-rounders, the fifth-season option comes at a lower but still predetermined salary.
Contracts are simpler, with complex mechanisms like voidable years and buy-back clauses now prohibited. There is a standard escalator clause in the contracts of all players drafted in the third through seventh rounds, which could increase salaries later in the deal, based on playing time. Contracts cannot be renegotiated for at least three seasons, and there are provisions designed to prevent players from holding out in the fourth and fifth seasons of their deals.
The system leaves the deals of players drafted after the first round basically unaffected. But the money saved on first round picks instead will go to a rookie redistribution fund, designed to be funneled to performance-based pay for veteran players, benefits for current and retired players and other needs.
Some of this year’s rookies said they hope to reap their benefits in future seasons.
“I can’t dwell on the fact that guys got a lot more money last year,” rookie quarterback Blaine Gabbert said at a news conference after he reported to the Jacksonville Jaguars’ training camp. “That’s irrelevant to me. Now the second contracts are bigger so you’ve got something to work for.”
Gabbert, the 10th overall selection in the draft, agreed to a four-year, $12 million contract with the Jaguars that is fully guaranteed. The 10th pick in last year’s draft, defensive end Tyson Alualu, signed a five-year, $28 million deal with the same team that included $17.5 million guaranteed.
“If you play the way you’re supposed to play and how everybody is predicting you to play, you’re gonna be all right either way it goes,” Newton said at a news conference after he reported to the Panthers’ camp.
The new rookie pay system does not dictate the exact value of a player’s contract based on his draft slot. A team is given the salary cap amount that it can spend on all its rookies in their first year and what it can spend on its rookies over the four years of their original contracts. A team also is given a minimum contract value for each of its draft picks.
Neither teams nor agents were supposed to be given the projected precise contract value of each draft slot. But after the NFL Players Association accidentally distributed those figures for this year’s draft to agents, the numbers also were sent to teams. The league and union will have to decide if that will become an annual practice.
The sticking point in some negotiations has been whether the contracts will be fully guaranteed. Baratz got things started by negotiating a fully guaranteed contract with the Tampa Bay Buccaneers for Iowa defensive end Adrian Clayborn, the 20th overall pick.
“We wanted to set the precedent,” Baratz said. “We knew what we wanted. We knew what the rules were. We didn’t want someone else to set the precedent for us.”
That complicated negotiations for the three players drafted immediately before Clayborn. NFL officials, who hoped the less intricate deals would minimize contract disputes with rookies, were distressed.
Most of the 12 first-rounders taken after Clayborn agreed to contracts with three guaranteed seasons.
“I think you’re going to see rookies get into camp on time,” Baratz said. “You’re going to see the money much more evenly distributed among the rookies. . . . Overall, I think it’s good for the game of football, in the players’ best interests and in the teams’ best interests.”