Football University: Rookie Contracts

A few years ago during the off season I had a regular series of posts title "Football University". As the title implies the posts were about football related topics, mostly X's and O's. I thought that I'd resurrect that series for this off season, and since rookies are starting to sign their contracts I figured that there might be more than a few questions about rookie contracts and wage scales and such.

As a side note, if you have twitter you'll want to follow Andrew Brandt of the National Football Post. He's a former scout, who then went to work for the Packers in their front office and has some great stories and insights about the business side of football.

One of the priorities of both the NFLPA and the NFL during the recent labor negotiations was to fix the rookie pay for top picks. To give an idea of the absurdity of the old way of doing business, Matt Stafford's rookie contract was six years, $72 million with $41.75 million guaranteed. $26 million of that was due to signing bonuses, so he was going to get paid that much even if he didn't throw a single pass in the NFL.

By comparison, when Tom Brady signed a new contract a year later it was for 5 years, $78 million, with $48.5 million guaranteed. In other words, a multiple SB winning QB, one of the best in the game, and he's only getting $7 million more guaranteed than an untried rookie did.

Clearly something had to change and it did.

Rookie contracts now fall into two classes, drafted and undrafted. This is an important distinction beyond the pay scale, and I'll cover that in a bit.

Drafted

1st round
Players sign four year deals, with slotted pay scales. (Cam Newton's 4 year deal was worth just over $22 million). Teams have the ability to option a fifth year, but that fifth year would cost the team more, depending on where the player was drafted. Top 10 picks would get a 5th year salary equal to the average of the top 10 at their position. Everybody else in the first round will get paid an average of the 3rd through 25th highest paid players at their position. The good news is that at least three years of this first contract is guaranteed, though it could be the full four years, depending on the contract status. (Von Miller's four year deal is fully guaranteed for example.)

2nd through 7th rounds
Players sign four year deals that vary based on where they're drafted. For these players little has changed about how much they are paid. For example, LaMichael James' contract is 4 years, $3.318 million (61st pick). In 2009 (last year before the rookie wage scale), the 61st overall pick was CB Sean Smith, who signed a 4 year deal worth about $3.1 million, though his deal contained almost twice as much guaranteed money as did James' deal.

Undrafted Free Agent
UDFA's can sign with any team that calls them, and can do it for any contract length. This is important because free agency requires four years of service in the NFL, so no drafted rookie will ever be a restricted free agent again. However an undrafted free agent could be restricted or even have the exclusive rights tag applied. UDFAs sign for league minimum, which for a rookie is $375,000. A second year player makes $450,000, and a third year player makes $525,000. Fourth year players can make $600,000 as league minimum.

Practice Squad
Players who show some potential but maybe aren't good enough to make the team can land on a team's practice squad. The minimum salary for a practice squad player is $5700 per week, though teams can pay more than that if they'd like. (Back in December of 2011 the Patriots gave Markell Carter a pay increase to $306,000! to be on the practice squad, or $18,000 a week. Not quite rookie pay scale, but close).

While the new CBA did a great deal to fix the overpayment of top draft picks, it leaves a great deal to be desired when it comes to underpayment of rookie contracts. Players who are drafted outside of the first round and who outperform their rookie deals are stuck with their contracts and have very little options open to them. I would have liked to have seen contracts be for three years for rounds 2-7 with a 4th year option.