The 2015 NFL season will mark the fifth full year into the NFL and NFLPA’s collective bargaining agreement (CBA), which runs through the 2020 season. One major change from the 2011 CBA compared to past ones involved the signing of rookie contracts. In the 2010 NFL Draft, each of the Top 7 picks received more guaranteed money in their rookie deals than any single draft pick obtained from 2011 onwards. For first-round picks, contracts ranged from five to six years in 2010, compared to standard four-year agreements completed every year since 2011 (for first round selections, 5th year acts as a team option). While some recent draft picks have significantly outperformed their contracts, many others have failed to match team expectations. Four years into the CBA, let’s examine how well this rookie wage scale has fared and what changes need to happen going forward.
ROOKIE CAP OVERVIEW
When St. Louis Rams quarterback Sam Bradford received $50 million in guaranteed money before even playing a snap, the NFL and the veteran players decided that the rookie wage scale had gotten out of hand. Who can blame them? Bradford signed for the richest deal (guaranteed money) in NFL HISTORY at the time of his signing. So far, Bradford has only won 18 games as a starter in five seasons, yet he has pocketed over $60 million in his career. While Bradford’s contract far exceeds the amount given to any other rookie, other top picks made a fortune before appearing in an NFL game. Below are the rookie contracts signed by the Top 5 picks in the 2009 and 2010 NFL Drafts, per NFL.com:
|Position/Player||Pick/Year||Total Contract||Guaranteed Money|
|QB Matthew Stafford||1/2009||6 years/$72 million||$41.7 million|
|OT Jason Smith||2/2009||5 years/$61.775 million||$33 million|
|DE Tyson Jackson||3/2009||5 years/$57 million||$31 million|
|LB Aaron Curry||4/2009||6 years/$60 million||$34 million|
|QB Mark Sanchez||5/2009||5 years/$60 million||$28 million|
|QB Sam Bradord||1/2010||6 years/$78 million||$50 million|
|DT Ndamukong Suh||2/2010||5 years/$68 million||$40 million|
|DT Gerald McCoy||3/2010||5 years/$63 million||$35 million|
|OT Trent Williams||4/2010||6 years/$60 million||$36.75 million|
|SS Eric Berry||5/2010||6 years/$60 million||$34 million|
Stafford and the players picked 2 through 5 in 2010 have done outstanding in the NFL; all five players have been selected for the Pro Bowl and four of these five players (except Berry) have already received lucrative second contracts (NOTE: Berry missed the final 5 games last season while recovering from Hodgkin lymphoma and will finish out the final year of his rookie contract in 2015).
The other five players on this list? Not so much. Bradford has won under 40% of his 49 starts in the NFL, and the Rams dealt him this offseason. Smith lost his starting job following the 2011 season, and the Rams released him prior to the 2012 season. Smith has been out of the league since 2012. While Jackson remains in the league and signed a 5-year/$25 million contract with the Falcons in 2014, he has not lived up to his contract and was forced to take a $10 million pay cut to remain with the Chiefs in 2013. Like Smith, Aaron Curry greatly underperformed. Seattle traded him to Oakland less than three seasons into his rookie deal, and Curry has not played since 2012.
While Sanchez led the Jets to two consecutive AFC championship game appearances in his first two seasons in the league, he did not display competent skills to remain as the New York Jets starting quarterback. Sanchez lost his job to a rookie, Geno Smith, prior to the 2013 season – yes, Sanchez suffered a season-ending shoulder injury during preseason, but Smith was the starter during the time of injury – and the Jets let go of Sanchez following that season. He appeared in nine games for the Eagles filling in for an injured Nick Foles last season, but Sanchez remains a backup heading into the 2015 season.
Draft picks, no matter their potential, carry substantial risk. Some fail, and some succeed. Thus, handing out a lifetime’s worth of guaranteed money to rookies alienated the veterans who worked tirelessly to earn their status in the league. Both sides overhauled the entire rookie wage scale to create mandatory components on each rookie contract:
• Five-year contracts, with a team option for a fifth year, for 1st round draft picks
• If the 5th year option is exercised for a Top-10 Draft pick, that player will receive a salary (in his fifth year) equal to the average salary of the Top-10 players at that respective position
o For example, the Bengals picked up AJ Green’s 5th-year option for 2015; Green will earn $10.1 million in 2015, which equals the average salary of the Top 10 highest-paid receivers in the league.
• If the 5th year option is exercised for a player picked between 11 through 32, that player will receive a salary equal to the average salary of the 3rd through 25th highest-paid players at that respective position
• Rest of draft picks sign four-year contracts with no player opt-out clause (Majority if these picks have non-guaranteed minimum salaries)
• Undrafted players sign three-year contracts
• Each draft selection has a pre-determined financial value
All rookie contracts have become a simple and standard procedure, which allowed every single 2014 draft pick to sign with his respective team by June, over a month prior to the start of training camp. Cam Newton, the first overall pick from 2011, signed for 4 years/$22 million while the 2015 top overall pick, Jameis Winston, just signed for 4 years/$23.352 million. Not much financial disparity over the five years. As the salary cap for each team has risen from $120 million in 2012 to $143 million in 2015, rookies have received a smaller percentage of a team’s cap.
POSITIVES FROM ROOKIE WAGES
While recent rookies have received substantially less money since 2011, almost all of them have entered their first seasons as prepared as possible. The entire team benefits when players like Bryant McKinnie (2002 Vikings) and Michael Crabtree (2009 49ers) do not hold out until a month into the regular season. Veterans get enraged when they see unknown prima donnas get greedy before they have even taken part in an NFL practice. Coaches cannot fathom first-year players falling exceptionally behind on learning the playbook just because they attempt to negotiate an undeserved contract.
As a result, three quarterbacks from the 2012 Draft Class alone – Andrew Luck, Robert Griffin III, and Russell Wilson – had arguably three of the greatest rookie seasons ever for a quarterback. All three quarterbacks started Week 1 for their respective teams and all three led their teams to the playoffs in their first season playing professional football. Most quarterbacks typically need a little seasoning before generating team success; in fact, Peyton Manning, Aaron Rodgers, and Drew Brees, three of the greatest quarterbacks in the NFL, all suffered at least 10 losses in their first full seasons as starters.
Fewer holdouts result in a greater likelihood for a rookie to succeed on the field, regardless of position. First-round wide receivers, many of whom have taken time to develop in the past, have had some exceptional rookie seasons. Odell Beckham Jr. had 91 catches, 1,305 receiving yards, and 12 touchdowns in only 12 games played last season. To put that in perspective, only Anquan Boldin and Randy Moss had ever had a rookie season of over 1,300 receiving yards, and both players needed all 16 games to accomplish the feat. Top-10 picks AJ Green (2011) and Mike Evans (2014) each had over 1,000 yards receiving in their rookie seasons, while Sammy Watkins (2014) and Julio Jones (2011) each had over 950 receiving yards. All of these players have arguably turned into No. 1-caliber receivers in a short amount of time.
Furthermore, the new rookie wage scale has forced rookies to earn their way into financial success. No more $39 million in guaranteed money handed out to busts like JaMarcus Russell. Or tens of million dollars handed out to Matt Leinart, Vince Young, Darrius Heyward-Bey, Vernon Gholston, and Ryan Leaf. Now, a signing bonus plus the annual salary combines to yield less than a $6 million cap hit for the top draft picks and less than a $1 million cap hit for any pick drafted in the second round or later.
Teams now have a larger room for error, and they have certainly taken advantage of the cap-friendly deals given to rookies. Minnesota, Cleveland, Jacksonville, and Tennessee have all used MULTIPLE first-round picks on rookie quarterbacks since 2011. These four teams replaced the ineffective Christian Ponder, Brandon Weeden, Blaine Gabbert, and Jake Locker with Teddy Bridgewater, Johnny Manziel, Blake Bortles, and Marcus Mariota. Prior to 2011, teams like Oakland and Arizona had to replace their ineffective first-round quarterbacks with cheaper veteran options. Both the Raiders and Cardinals have cycled through several quarterbacks since releasing first-round busts JaMarcus Russell and Matt Leinart.
Those who draft well, especially in the later rounds, form the best teams. For instance, in Seattle’s Super Bowl run in 2013-14, Wilson (3rd Round), Richard Sherman (5th Round), K.J. Wright (4th Round), Kam Chancellor (5th Round), Byron Maxwell (6th Round), Jermaine Kearse (undrafted), and Doug Baldwin (5th Round) all started for the Seahawks and all made under a million dollars in 2013. This allowed Seattle to compensate for the high-priced players who did not contribute much due to injury or lack of production (Sidney Rice, Percy Harvin, Zach Miller, Paul McQuistan, and Matt Flynn). All five of these players had salaries of over $5 million annually for minimal production over the course of the season.
Many of the players who have performed well from the 2011 Draft Class have been appropriately compensated for their consistent on-field production. Each of these notable players drafted in 2011 has finished out his four-year rookie contract and has received a lucrative new contract:
|Cam Newton||1/1||5 years/$103.8 Million|
|Patrick Peterson||1/5||5 years/$70.05 million|
|Tyron Smith||1/9||8 years/$110 million|
|J.J. Watt||1/11||6 years/$100 million|
|Robert Quinn||1/14||6 years/$65.6 million|
|Ryan Kerrigan||1/16||5 years/$57.5 million|
|Andy Dalton||2/35||6 years/$96 million|
|Colin Kaepernick||2/36||6 years/$114 million|
|Randall Cobb||2/64||4 years/$40 million|
|Justin Houston||3/70||6 years/$101 million|
|DeMarco Murray||3/71||5 years/$42 million|
|Richard Sherman||5/154||4 years/$56 million|
|Jason Kelce||6/191||6 years/$37.5 million|
Few can possibly argue the contracts given to the above players, even the high ones given to the three quarterbacks above. Newton, Dalton, and Kaepernick have all led their teams to the playoffs multiple times and prior to their arrivals, Carolina, Cincinnati, and San Francisco all missed the playoffs for multiple consecutive seasons. The rest of the players have earned their stripes and established themselves as quality NFL players. With a rising cap, the best veterans who have consistently produced on the field should continue to reap incredible financial rewards.
ISSUES WITH ROOKIE WAGES
On the other side of the spectrum, this new rookie wage deal contains some serious flaws. With football being arguably the most dangerous team sport in the world, players risk significant injury literally every single play in every game. Countless retired players have publicly stated their health damages from playing football, from significant memory loss to the inability to walk normally.
When 250-pound gladiators collide on a field every single play, especially while running at ridiculous speeds, injuries will happen. Nobody is immune to them. For instance, Rob Gronkowski, arguably the greatest freak in the league with his 6’6”, 265-pound frame, has suffered three different significant injuries (high ankle sprain in 2011, broken forearm in 2012, torn ACL in 2013) along with a severe back injury during his college days at Arizona. Jimmy Graham has battled injuries seemingly every single season he has played.
No matter what rules the league implements, several injuries will naturally occur due to the high impact from some of the tackles. Yes, the NFL has essentially eliminated helmet-to-helmet contact for all passing plays, in an attempt to reduce the number of head injuries. According to PBS, though, these new safety measures still have not prevented concussions in the NFL, as there were 261 diagnosed concussions in 2012 and 228 concussions in 2013, which averages out to nearly eight per team each season.
This brings us back to the rookie wage scale. An NFL career can dissipate in a moment. Look no further than Green Bay’s promising tight end Jermichael Finley, who suffered this nasty concussion on a routine play. He has not played since. Or David Wilson, who suffered a career-ending neck injury. Or Ben Utecht, who publicly spoke about a series of head injuries he suffered during his five-year career, which has given him some brain damage.
Many players do not last in the league for four years, before they can receive their first lucrative contract. Rookies who ridiculously outperform their first contracts such as T.Y. Hilton, who signed a 4-year/$2.642 million contract in 2012, should not have to wait four years to get paid their market values. Hilton is generously listed at 5’9”, 178 lbs and has had at least 80 receptions and 1,000 receiving yards in each of the past two seasons while getting paid a fraction of his market value. With his slender frame, a big hit like what Austin Collie suffered a few years ago can severely damage Hilton’s career.
Others who play physically demanding positions like running back also tremendously suffer from the rookie wage scale. Any running back can only take so many hits over the course of a season. Thus, the position has been remarkably devalued, since teams believe they can cycle through fresh legs without paying running backs much. Two notable players include 2012 first-round picks Doug Martin and Alfred Morris. Martin rushed for 1,454 yards his rookie season but has been slowed by injuries these past two seasons, which caused Tampa Bay to decline his fifth-year option.
Morris has rushed for over 1,000 yards in each of his first three NFL seasons. His financial reward? A total contract value of under $2 million. He becomes an unrestricted free agent at the end of the 2015 season, and the Redskins still have not offered him a contract extension.
DeMarco Murray had three straight injury-plagued seasons to begin his career. Fortunately for him, that timing worked out perfectly, as he had his breakout season in his contract year in 2014. Despite carrying the ball 392 times last year, he inked a $42 million contract, largely because he did not have as much wear and tear on his body over his first three seasons as some of the other running backs.
Therein lies a problem. If players have very little incentive to perform over their first three seasons yet can reap tremendous financial rewards after one great fourth season, it discredits those who have performed well from Years 1-3. Murray rushed for more yards in 2014 than he did in 2012 and 2013 combined. Morris has been incredibly consistent over his first three seasons, yet he not received any sort of financial security. The Redskins may decide to replace their lead running back with a cheaper option, like Dallas chose to do with Murray.
Furthermore, this new salary cap structure presents a major dilemma for college players. If they would anyways need to wait at least four years to receive a legitimate contract offer, draft-eligible players would have very little incentive to play out their final years in school. After all, they do not earn any direct financial compensation as a result of their participation with NCAA football, so if they feel like they have a chance to make money, they will go for it. Plus, top draft picks earn a finite amount of cash during the first few years in the new CBA, so top prospects staying in school have little financial incentive to wait an additional year.
As a result, a record 98 underclassmen – plus an additional four more players who had NCAA eligibility remaining even though they had graduated – declared for the NFL Draft in 2014. Only 53 total players with college eligibility declared for the draft in 2010, while 84 players with college eligibility remaining entered the 2015 NFL Draft. While only 7 underclassmen went undrafted in 2010, a record 38 underclassmen went undrafted in 2014 and another 24 did not get selected in 2015.
Going undrafted, though, may not end up as the worst move for some of these players. Unlike drafted picks, players not selected by a team only sign three-year, minimum value contracts. That has allowed players like Cincinnati LB Vontaze Burfict (3 years/$18.43 million), Dallas K Dan Bailey (7 years/$23 million), and Denver CB Chris Harris (5 years/$42.5 million) to sign lucrative contract extensions after playing fewer than three seasons with their respective teams.
Nonetheless, having 62 underclassmen go undrafted over the past two drafts sets an extremely alarming trend for the league, and the NFL should look at a watered-down college basketball product as a cautionary tale. The primary purpose of college should be to educate students, and only 1.6% of NCAA football players reach the NFL. That leaves the overwhelmingly majority of students who need a sufficient education for life after athletics. Even since NFL players do not often last more than a few years, education for these players is extremely important for obtaining a job after finishing their playing careers.
Like the NFL (since 2011), the NBA has a strict wage scale for rookies. The disparity between what the top and bottom picks earn on their rookie contracts does not make up such a drastic difference to convince players to stay in school. In the NBA, the first pick earns just under $5 million in salary in his first year, while the 30th pick earns $950,000. NFL top overall picks make around $5.5 million per year while the 32nd pick earns just under $2 million per year.
Yahoo Columnists Dan Wetzel and Rand Getlin did thorough research on this topic and stated that the average years spent in the NCAA for average first-round NBA selections dropped from 3.3 in 1994 to 2.0 in 2004. Every first-overall pick since 2010 (John Wall, Kyrie Irving, Anthony Davis, Anthony Bennett, Andrew Wiggins, Karl-Anthony Towns) only played one year in college before entering the NBA. How can schools build sustainable programs when players recycle in and out of the university on an annual basis?
Since most players have to wait at least four years to sign a deal, they prefer to sign their first contracts at age 24-25 instead of ages 27-28. By playing such a physical sport, players rightfully believe that they have a stronger chance of achieving financial security by entering the league as soon as possible instead of waiting until they are truly ready to play. The abrupt departure of many players affects both the quality of the college and professional game, as college coaches cannot properly develop players without spending a full year with them. This has allowed fundamentally sound players like Tim Duncan to continue to dominate the game as he approaches 40 years old, as a growing number of players possess poor fundamentals.
Nonetheless, the players have an excellent point of reasoning, and they have every right to exploit these rules, in both the NFL and NBA. Sacrificing a few dollars in the short-term to gain a greater chance of signing a massive, eight-figure contract after developing for a few years seems like the most logical idea from the players’ point of view. More than anything, most players want financial security after not earning an income in college, so they will have more chances at signing that big contract if they entered free agency at 24 years old instead of 27 years old.
However, teams face a dilemma. Should they draft on raw prospects with a high ceiling or go for established players who have nearly reached their potential. Some players like Matt Ryan can contribute right away; Ryan led the Falcons to the playoffs in his rookie season after the team finished with the third-worst record prior to his arrival. Others like Drew Brees, who had three middling seasons with San Diego before flourishing, need more time to develop. In most cases, most players who rely on skill, particularly quarterbacks, need more time to acclimate themselves in the league.
Although quarterbacks have thrived from the 2012 NFL Draft, no quarterback from the 2013 NFL Draft (headlined by Geno Smith, EJ Manuel and Mike Glennon) or 2014 NFL Draft (led by Blake Bortles, Derek Carr, Johnny Manziel, and Teddy Bridgewater) has achieved any sort of on-field success in his first seasons in the league. 2013 first-round receivers Tavon Austin and Cordarelle Patterson have yet to grasp the intricacies of the position, while 2014 first-rounders Watkins, Evans, and Beckham immediately flourished. Many rookies succeed and many more fail. Thus, the pressure increases for teams’ to effectively develop these prospects and stay disciplined in the growth process; otherwise, teams may not maximize the potential of many draftees, which would lessen their values to the team.
SOLUTION GOING FORWARD
Four years into this current CBA, we now have a sufficient sample size to compare the overall impact of the rookie wage scale from the past and current agreements. Owners have reaped financial rewards from the new agreement, as they now receive a larger share of the revenue pool – players receive between 47-48.5% of total revenues in new CBA compared to obtaining 57% of the revenues in the old CBA. Players, though, have benefitted greatly as well, as they get numerous health benefits along with a rapidly rising cap every year.
With a ridiculously lucrative TV deal with four different networks, along with strong revenues from merchandise and licensing, NFL teams have more money than ever. Forbes’ values an average NFL team at well over $1 billion, while Bloomberg estimates the overall market value of the entire league to equal around $46 billion. According to the valuations, every team is currently worth at least $930 million, while Forbes valued 11 teams under that number in 2010.
As a result, the salary cap has risen by $23 million since the beginning of the decade, and players who have completed their first contracts have benefitted the most from the league’s financial boom. Players on rookie contracts combine to receive no more than $25 million annually, while players with at least 3-4 years of experience can take up to $120 million of a team’s salary cap. Generally, teams have between $10-$35 million of dead cap, which refers to the guaranteed money (typically the signing bonus) that the team owes the player who no longer plays for that team. For instance, Baltimore has a combined $20 million “dead cap” hit on Jacoby Jones, Haloti Ngata, and Ray Rice for the 2015 season in the form of a signing bonus and option bonus. This counts against the team’s salary cap.
Nonetheless, teams can now fill out their rosters with quality rookies on team-friendly deals. They get absurdly great values on players like Russell Wilson and Andrew Luck who substantially out-perform their rookie contracts, which allow teams like Seattle to spend their resources on building a historically great defense. Not only does this force a player to perform well through his third or fourth season in the league, a player must remain relatively healthy at the conclusion of the rookie deal. Smart teams pay for future expected values, not past performance.
Some players do not even reach their fourth seasons in the league healthy. If players do not get compensated for their performance, more “retirements” like Chris Borland’s shocking decision to quit playing in the NFL will soon become a trend. Borland finished a promising rookie season in 2014; after replacing injured All-Pro linebacker Patrick Willis (who also retired after the season) in the middle of the season, Borland accumulated 100 tackles in the season’s final eight games and made some clutch, dazzling plays to help the 49ers compete. He was considered a rising star within the organization and after Willis’s initial retirement, Borland entered the offseason as a leader on the defense. Or so they thought.
Borland walked away from the game he loved after just one professional season, when he finished the year without suffering any injuries. He proactively conducted his own neurological research on the direct correlation between football and brain injuries. Borland concluded that the risks outweighed the rewards of playing football, and he did want to suffer any lingering head injuries from the sport. After he returned 75% of his signing bonus, he earned less than a million dollars for his efforts, as he walked away from this game without the financial security of other early retirees like Patrick Willis, Barry Sanders, and Rashard Mendenhall.
While Borland’s decision may end up as an outlier, it serves as a cautionary tale for the league and may pave the way for more talented players to make similar decisions in the future. Though he never explicitly mentioned the money, Borland needed to play three more seasons just to become a multi-millionaire. To really achieve true financial security, people must play at least five or six seasons in the NFL. With the rookie wage scale structured like this, many promising players may decide that the risk of playing six years while maintaining good health is not worth it.
Ultimately, both the players and teams need to draw a fine line on how much young, inexperienced players should earn in the early parts of their careers. Currently, the mandatory team-controlled four-year contracts favor teams over the young players. Sure, veterans do benefit from less money given to rookies, but many teams have opted to sign cheaper draft picks instead of keeping veterans on the roster. This has prevented many quality players such as Lance Briggs, Brandon Lloyd, Reggie Wayne, Asante Samuel, and Santonio Holmes from signing with any team. Once players show a slight decline in their skill sets, teams have decided to move on and pursue alternative options. Such is the cruel reality in the NFL.
The NFL should provide an opportunity for standout rookies to receive fair compensation for their performance. A player should have incentives to make more money, especially when thousands of other people make money off of a single player’s name. Thus, I propose that a player should have the option to opt-out of a rookie deal after two years if he reaches ANY of these milestones within his first two seasons in the league:
• Pro Bowl Selection
• All-Pro Selection
• Top 10 in his position in any major statistical category (passing yards, receptions, receiving yards, tackles, interceptions, etc.)
• Plays in at least 90% of a team’s snaps
If a player immediately performs well, such as Robert Griffin III in 2012 or Odell Beckham Jr. in 2014, he should be rewarded from his team. Yes, everyone can agree that rookies must prove their worth in the NFL. Thus, the current rookie salary structure for a player’s first two years is completely justified, regardless of their draft position. Teams should have the chance to protect themselves from busted draft picks, and use the leftover money to pay more deserving players on the roster.
However, great players should not need to wait for four years to finally receive financial security. Russell Wilson, who is listed at 5’10”, had arguably one of the greatest first three seasons of quarterback play in NFL history. He won a playoff game every year and came within a yard of winning back-to-back Super Bowls. Why should he have to wait until 2016 to finally start earning near his market value, when he has already accomplished so much in three full seasons?
An incentive-based rookie contract given to every player would benefit BOTH the teams and the drafted players. Holdouts will cease to exist; players have ample motivation to practice and perform to the best of their abilities; teams will get the most out of unproven players due to their desire to get paid. If a player fails to live up to expectations, the team does not lose much outside of a wasted draft pick and little salary cap space. If a player outperforms his contract within his first two years, he would get rewarded with a lucrative new contract with an immense pay raise. Quality but unspectacular players can remain on their current rookie contracts until they elevate their games and/or get more playing experience. This would give fair compensation to everyone involved with the game.
Football is inherently a dangerous game. Players from the most physically demanding positions, such as running back and linebacker, have an extremely high risk of injury during any moment of any game. Thus, players who have played well right from the beginning of their careers and have displayed capable growth potential should capitalize on the opportunity to make money sooner rather than later.
Tens of millions sets of eyeballs watch every single NFL regular season game, and they tune in to watch the best players in the world. The league is flooded with cash, so why should some standout performers, like Odell Beckham Jr., make less money than half his team for the next three years? He has established himself as a household name and a national icon after making one of the most sensational catches in NFL history. Beckham should get paid like one, and incentive-laden contracts would allow the best youngsters to get what they deserve.