NFL

Is the NFL Hurting from the Current State of Rookie Contracts?

BrianCorrespondent IAugust 19, 2008

In case you haven’t heard, NFL Commissioner Roger Goodell is not pleased with the current state of rookie contracts.

“Money is not going to players that are performing. It's going to a player that never makes it in the NFL. And I think that's ridiculous."

Imagine this scenario:

You’re a 10-year veteran in the NFL. You’re a free agent. While not a superstar, you’re still very gifted. All of those years on the gridiron have begun to take their toll on your body, but you’re still rock solid and an attractive athlete to many NFL franchises.

During the free-agent signing period, you’ve spoken to numerous teams, all of which have told you the same thing: “We would love to have you on the team, but if you can’t take a significant pay cut, we can’t sign you.”

Unfortunately, this scenario is very realistic given the current structure of the NFL rookie salary cap (or lack thereof).

While there is no cap on rookies, the NFL has a “hard cap” for teams, meaning that no team can exceed the cap for any reason. The cap is determined by the Defined Gross Revenues set by the league each year as a reflection of the previous season’s total revenues (the inclusion of all revenue streams was renegotiated in 2006 to add things like naming rights and advertising).

The cap itself is a product of the Collective Bargaining Agreement (CBA), the most recent of which was negotiated in 2006.

In case you are confused, here is the actual mathematical equation:

Projected revenue x CBA Percentage = Players Share Total Revenue

Players Share minus Projected League-wide Benefits = Amount Available for Player Salaries

Amount Available for Player Salaries / Number of Teams = Unadjusted Salary Cap per Team

So while there is an overall cap that teams must abide by, there is no such cap for rookie contracts, which, by the way, are indeed accounted for in the overall cap. Under this system, unproven rookies can earn more money than seasoned veterans!

All other things being equal, that’s like placing a higher value on a high-school diploma than a college degree.

Sure, high rookie contracts can help veterans by inflating their worth. But is that really necessary? With a rookie cap, teams would be able to invest their money in many different avenues, such as veteran players, advertising, or even stadium improvements. Rookie players wouldn’t be working for free, mind you; there is a league-minimum salary.

As of 2007, the minimum structure salary was as follows:

Rookies and first-year players: \$285,000
Second-year players: \$360,000
Third-year: \$435,000
Fourth-year: \$510,000
Fifth through seventh-year: \$595,000
Eighth through 10th-year: \$720,000
11th-year and longer: \$820,000

Once rookies that prove that they belong in the league they can renegotiate their contracts. Plus, these figures exclude endorsements.

"Ridiculous" Rookie Contracts

• Matt Ryan, the No. 3 overall pick in the NFL draft, signed a six-year deal worth \$72 million (\$34.75 of which is guaranteed money) with the Atlanta Falcons.
• The No. 1 overall pick, Jake Long, signed a five-year deal worth \$57.75 million  (\$30 million guaranteed) with the Miami Dolphins.
• Last years' No. 1 pick, JaMarcus Russell, signed a six-year \$61 million contract.

Welcome to your teams, gentlemen. You are officially the highest-paid players on your teams, and you have yet to take a snap as a professional (JaMarcus played in four lackluster games last season throwing for 373 yards, 2 TDs and a 55.9 QB rating).

Indianapolis Colts President Bill Polian (father of Notre Dame Special-Teams Coach Brian Polian) has been one of the most ardent supporters of a rookie cap.

"The union has to give us a firm, definitive, rookie salary cap. We're perfectly willing to have the money that does not go to the rookies go to the veterans. Nobody is looking to save money. But we're sick and tired of giving exorbitant, incredible sums of money to players who haven't proven they can do anything but play against Eastern Michigan."

Caps in Other Leagues

Maybe the NFL should take notes from other leagues. The NBA has a system that is very intuitive: Rookies are paid in ascending monetary value, judged by their placement in the draft. Everything is scaled to a set maximum value. The NHL recently created a rookie salary cap, too. The MLB has no salary cap, but rather a luxury tax.

So, if you were an NFL owner, why would you pay someone who has never played a down as a professional an exorbitant amount? The simple answer is that you don’t want to. You would much rather use that cash to sign veteran players to build the pieces of your puzzle.

Is There an End in Sight?

It should be a no-brainer. Once you’ve shown that you won’t be a "flop," you can negotiate a new contract worth millions. Until then, however, it does not seem “fair” for the older players in the league, who have already proven themselves, to earn less than the best players coming out of college.

I know what some of you are thinking. NFL players are at risk of injury every time they step on the field. They’re walking occupational hazards. What if they are hurt? What will they do with their lives post-football, especially with so many years ahead of them?

Here’s a thought: They could fall back on the education they received in college. After all, they are STUDENT-athletes.

Last month, team owners unanimously decided to opt out of the CBA, which makes the likelihood of a strike more plausible. So all that needs to happen is for team owners and the NFL Players Association to negotiate a new CBA.

Easier said than done.

*For an incredibly thorough analysis of the NFL salary cap visit Ask The Commish

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