Wage wars? Rookie contracts not as big a problem as some believe
Each time a high draft choice signs a megadeal in the NFL, critics make the case for a wage scale that would limit the money that first-round draft choices receive.
We heard it first this year when offensive tackle Jake Long, after being selected first overall by the Dolphins, signed a potential $57 million deal that includes $30 million in guarantees. The volume increased last week when quarterback Matt Ryan, selected third overall by Atlanta, signed a potential $72 million pact that has nearly $35 million in guarantees. 'Why pay a guy who hasn't yet played a down in the NFL more than some veterans get,' people ask.
"When people read about Matt Ryan's deal or Jake Long's deal, that's what they sort of jump on," said former Packers vice president Andrew Brandt, who resigned in January after nine years doing player contracts and managing the salary cap, among other things. "But the truth is that there are very few rookies making that kind of bonus money or salary or average per year. The focus is on the top, and that's what has created the perception that rookies are taking money away from veteran players.
"In theory, no one wants unproven players who haven't had a practice in the NFL to make more than proven veterans. In practice, is that really happening? Is it really happening on a scale where there needs to be a sea change in rookie compensation? The average NFL salary is $1.7 million, and there may be 25 guys among those 250 or so players drafted who are making more than that -- and that usually ends somewhere in the latter part of the first round. So, is it a big problem? Just on the economy scale as a whole, not really. It's just been skewed toward the top, in terms of disproportionate amounts paid to those guys."
Count me among those who agree with Brandt that this issue isn't as serious as the Chicken Littles would have us believe. But for the sake of discussion, let's play along and say that rookie salaries are a problem and the issue will be a point of contention between the league and the players association while negotiating a new collective bargaining agreement. What to do?
Keep in mind that the league, theoretically, already has a rookie cap. It's known as a "rookie pool," which is supposed to function as a salary cap within the salary cap. Basically the rookie pool specifies the maximum amount of total salary-cap dollars that a team can spend on rookies in the first year of their contracts. The pool varies from team to team and is determined by the number of draft picks a club has and the placement of those picks. The Chiefs were allocated a league-high rookie pool of just over $8 million this year -- or 14.5 percent of the 2008 salary cap of $116 million -- because they had a league-high 12 draft picks, including two in the top 15. By comparison, Cleveland, which had only five picks, including none in the first three rounds, has the smallest rookie pool, at just under $1.8 million.
However, the rookie pool is not a hard "cap" because teams can circumvent it by using roster bonuses, option bonuses and escalators, monies that don't count against their first-year salary-cap figures. Some recent high draft choices have opted to pass on signing bonuses -- a prorated portion of which would count against their first-year salary-cap figures -- for option bonuses, roster bonuses and escalators, which give them their money without inflating their first-year salary-cap figure.
A rookie wage scale is different in that it would specify the total dollars and total years on a first-round draft choice's contract before he enters the league, a la the NBA. The higher the selection, the more he would make. In the NBA, for example, the first pick gets more than the second, who gets more than the third, and so on. Each contract is for two years at a relatively moderate salary, which is guaranteed. (Last year's top pick Greg Oden got $3.885 million his rookie season and will be paid $4.176 million next season.) After two years, the clubs have options for the third and fourth seasons. If the player doesn't show promise after two seasons, clubs can terminate the contract.
Repeating myself, I don't think there's a need for a wage scale in the NFL, but if it does become a bone of contention in the new CBA negotiations, here's what I'd do if I were union executive director Gene Upshaw. I'd back off my previous statement that a rookie wage scale is off the table and tell the owners that they can have it if they do these three things: