The NFL and NFLPA agreed on a new Collective Bargaining Agreement lifting the lockout on July 25, which has now turned the offseason into a frenzy with teams agreeing with free agents and signing draft picks.
Players are flying all over the place to different teams and holdouts seem to be a thing of the past, unless your name is DeSean Jackson, Chris Johnson (who both deserve a new contract) and Frank Gore.
One of the big issues heading into the CBA talks was a rookie salary cap to get rid of the ridiculously large contracts that paid unproven players more money than valuable veterans as teams were cash strapped with the amount of money they would spend.
Both sides agreed—NFL and NFLPA, on implementing a rookie-salary cap which is now being known as the JaMarcus Russell rule.
In 2007 LSU quarterback JaMarcus Russell was the first overall selection by the Oakland Raiders. As in seasons past most first-round draft picks holdout to try and negotiate the most money possible and more importantly the most money guaranteed.
Russell and his agent held out until the first week of the 2007 season where the Raiders and Russell finally agreed on a six year (max years allowed) $61 million contract with $31 million in guaranteed money. In three seasons from 2007-2009 Russell had 4,083 yards passing, 18 touchdowns and 23 interceptions along with 22 fumbles and a passer rating of 65.2. After the 2009 season Russell was released and cleared waivers after still having three more years left on his contract.
In 2009 the Detroit Lions reached an agreement with Georgia quarterback Matthew Stafford on a six year $72 million contract with a league record at the time $41.7 million in guaranteed money. The Lions selected Stafford as the first overall pick. In two seasons Stafford has thrown for 2,802 yards, 19 touchdowns, 21 interceptions and five fumbles. The big issue with Stafford is not talent or leadership ability it is the injury bug as he has only played 13 games thus far in his career (10 in 2009 and three in 2010). His guaranteed $41.7 million is a lot of money when he has not even played in half of his games due to injury.
The St. Louis Rams selected Oklahoma quarterback Sam Bradford in the 2010 draft and later signed him to a record six year $78 million contract with $50 million in guaranteed money. Again a player who had never played a down in the NFL was making more money guaranteed then anyone in the league.
Something had to change and many knew a rookie salary cap system was going to be put in place.
Under the new rules a team and first-round draft pick can sign for no more than five years however the fifth year can be an option year. Players drafted in rounds two-to-seven can sign for a maximum of four years. As well first-round picks cannot re-negotiate their contract until year three and all other draft picks in year two.
The fifth year of the players salary can increase and can almost triple from the previous amount.
In 2011 the Carolina Panthers selected Auburn quarterback Cam Newton first overall and once the lockout was lifted signed him to a four year deal worth $22 million, with all of it being fully guaranteed. This is a huge decrease from Bradford’s $50 million in guaranteed money and shows the rookie situation is seemingly under control. Even in year five Newton’s salary only jumps roughly $14 million and if that is guaranteed, still comes in under Stafford’s 41.7 million in guaranteed money.
The second overall pick Texas A&M outside linebacker Von Miller signed a four year $21 million contract which is also fully guaranteed with the Denver Broncos.
Last year the Detroit Lions signed second overall pick Nebraska defensive tackle Ndamukong Suh to a five year $60 million deal with $40 million fully guaranteed.
By having a rookie salary cap it makes the margin of error in drafting high in the first-round less as teams are committed to a shorter amount of years (four) and less money ($11 million based on four years and $28 million in total savings).
In addition, under the new CBA there is a $30,000 fee per day when a player holds out and does not report to mandatory training camp. In years past the price was around half at $15,000 costing the players far more presently then before.
Players, agents and owners always try to find loopholes in CBA agreements to maximize economic or talent gains when negotiating contracts or trades.
With rookies now being forced under a cap and not being able to re-negotiate their deal until year two or year three the owners are able to stay away from the grossly increasing salaries.
However a strategy that could be used in the very near future is players and agents wanting to sign for a lower term of only two or three years. A player is not able to receive unrestricted free agent status until year five but once their rookie contract has expired they are open to a new agreement with the front office and do not need to abide by the rookie salary cap rules.
This then allows the player and agent to negotiate a much higher contract that would be closer to those of years past. A player already has a few million dollars made in guaranteed money allowing them to pay the holdout fees when looking for a bigger and higher paying contract.
Also, if a player does not like his situation of being with a poor team he can holdout and demand a trade after only a few seasons or a team can send an offer sheet in hopes to signing him.
In the end everything could be back to the way it was before with younger players potentially being able to demand and make more money than veterans.
So the question remains, will the new NFL rookie salary cap really work in the long run?