Everyone says rookies cant make the jamarcus type money anymore, but I also hear higher picks will be multi-millionaires...
The new rookie wage scale set by the latest CBA mandates that all rookie deals are four-year deals.
Players taken in the second round and on get straight-up four year deals; teams are granted a fifth-year option for players taken in the first round.
This means that teams can choose to keep the player around for a fifth year, if they want.
The catch, is that the team has to decide on whether or not they’re going to keep that first round pick after the third year of the contract, and before the start of the fourth year.
If they don’t exercise that option by then, the player is free to hit free agency after that fourth year.
If the team exercises their option for the fifth year, the player’s fifth year salary is guaranteed.
The amount of money you make on that fifth year salary depends on your draft position.
If you’re drafted in the top 10, your fifth year salary will be the average of the salaries of the top 10 players in the league at your position.
If you’re drafted 11th-32nd in the first round, your fifth year salary will be the average of the third to 25th highest paid players in the NFL at your position.
Heading into the 2012 season, rookie deals are getting done way faster than in the past.
One of the reasons, is because there’s now an “official” cap on the amount of money teams can spend on rookies (also known as the “year one rookie compensation pool”).
>>Related: NFL Contracts – 15 Ways NFL Players and Teams Gain Leverage in Negotiations – Part One
Because there’s a cap, there’s not as much wiggle room for agents to negotiate deals for their clients; things are more set in stone.
The league assigns a pool number to each team. Each team’s number is different.
The number assigned to a team is based on the number of picks a team has in the draft, as well as the positions where those picks reside in the draft.
In 2011, the San Francisco 49ers Year One Rookie Compensation pool was capped at $6,935,903, and the floor was $5,115,676.
In other words, the amount of money they spent on the first year salary for every player taken in the 2011 Draft had to fall between $5,115,676, and $6,935,903.
TOTAL ROOKIE COMPENSATION POOL
Now I forgot to mention this earlier, but the wage scale also limits the amount of money that can be spent on the total value of the rookie contracts, including bonuses.
This is called the “total rookie compensation” pool.
So sticking with the 49ers’ 2011 situation, the league put a cap on the value of all their rookie contracts at $38,147,464.
In other words, if all their 2011 draft picks play-out their four-year rookie contracts, the total amount of money the 49ers can spend on paying these players over those four seasons $38,147,464.
The way that the salaries for rookies are calculated has it's genesis in what is termed "rookie allocation" in the CBA. The rookie allocation is determined using calculations of percentages of the overall Salary Cap and the rookie allocation for each player is determined, per the CBA, "based upon the number, round and position of the Club's selection choices in the Draft."
Obviously, much of the inner workings of each player's salary is confidential between the player, agent, team and league. However, as with much of the league, some details are leaked to the media. We can use some of these leaks to get an idea of how much drafted players will make in each year of their contract.
There will be some details to which we are not accounting in this example. For instance, some contracts will have extra bonuses in addition to the signing bonus which could include areas as offseason workout bonuses, compensations for community relations/sponsor appearances, weight bonuses, etc.
As an example, let's take the Raiders highest draft pick in 2012, lineman Tony Bergstrom.
Per Paul Gutierrez of CSN, Bergstrom's first year allotment under the rookie allocation system is $516,504.00.
There are two calculations that need to take place on this allotment number to be able to correctly calculate Bergstrom's yearly salary.
First, his signing bonus:
To calculate a player's signing bonus, we take the year one allocation number, subtract the minimum rookie salary for the year and then multiply by 4, which is the number of years in the contract over which the bonus will be spread.
So, for Bergstrom's salary bonus we take his allotment of $516,504.00 and subtract the 2012 rookie minimum which is $390,000.00. That subtotals $126,504.00. That is amount of signing bonus money the player will make per year of the first 4 years of the contract. After the 4th year, the club has an option to pick up a fifth year for first round players. Even if the player is a 1st round player, however, because the 5th year isn't a guarantee the bonus is spread out for the 4 year life of the contract.
The total signing bonus will be $126,504.00 times 4 which equals a total signing bonus of $506,016.00.
Next, we calculate the base salaries for Bergstrom:
To do this we take our year one allocation number at 25% and the resulting number is the incline factor for the salaries – that is the amount that the player's salary increases each year.
Again, Bergstrom's year one allocation number is $516,504.00. 25% of that allocation number is $129,126.00. This means that Bergstrom's salary will increase by $129,126.00 each year of his contract.
Bergstrom's base salary in 2012 will be $390,000.00, the rookie minimum for 2012. He will have his prorated bonus amount of $126,504.00 as well. That means that his salary cap number will be $516,504.00 (you may notice that that number is the same as his year one allotment).
My understanding of the language in the CBA is that workout bonuses and the compensation for the community relations/sponsor appearances are specifically excluded from being considered "likely to be earned" and does not count against the cap. Some other bonuses can count against the cap and would need to be considered including, for example, language for incentives for playing time whether or not the team actually believes those incentives are likely to be earned.
So, we know that Bergstrom's 2012 number is likely at or very near $516,504.00. We have earlier calculated that his incline factor or the amount his salary will increase each year, is $129,126.00. So, each season through year 4 of the contract simply escalates by that amount.
So, taking that information, here will be the salary numbers (base plus prorated bonus) for Bergstrom over the first 4 years of his contract:
2013: $645,630.00 ($516,504.00 plus $129,126.00)
Because Bergstrom was not a 1st round player there will not have a 5th year club option. In a situation with 1st round players the 5th year salary is an average of the top 10 salaries at that player's position if the player was picked in the top 10 and an average of the top 1/3 of the salaries at that player's position if they were selected 11-32 in the first round.
Players taken in later rounds may not have an incline factor that increases their yearly salary much. In that factor, players will make the league minimums for their amount of years earned.
Here are the 2012 contract minimums that would effect a player in their rookie contract:
Rookies = $390K
1 yr in NFL = $465K
2 yrs in NFL = $540K
3 yrs in NFL = $615K
Remember to add in the prorated salary bonus on top of the minimum salary.
The new CBA is infinitely more fair to teams and veterans. You don't get bankrupted by players who haven't earned anything.