Breaking down the CBA: Rookie contracts

The San Francisco 49ers have gotten busy this week getting their draft picks signed to rookie contracts. Prior to the current collective bargaining agreement, most deals did not happen until later in the summer. First round picks often ended up getting done in the hours leading up to training camp, and we were often left with holdouts costing players important practice time.

The new CBA has changed that with the rookie wage scale. There is a certain pool of money allotted to each team for signing their draft picks. That money reflects how many picks and how high in a given round a team is picking, and it has led to rookie wages being suppressed as compared to their veteran counterparts. It was a "concession" the NFLPA was willing to make in order to potentially provide more money for veterans. The downside to this decision is it has quickly begun to result in lower to middle class veterans losing jobs.

We've been breaking down the CBA article by article, and today we move on to Article 7, "Rookie compensation and rookie compensation pool". It is a fairly lengthy article, so I'll try and focus on the more important aspects that we see on a regular basis. The wage scale is figured out based on the salary cap and TV money, which changes each year, and is not specifically addressed in Article 7.

If you have any questions, let me know in the comments.

Contract Length

1st round picks: All contracts are four years, with an option for a fifth year
2nd-7th round picks: All contracts are four years, with no option
Undrafted rookies: All contracts are three years

Compensation Allowed

Teams can compensate any rookie with base salaries, signing bonuses, workout bonuses, roster bonuses, minimum offseason workout per diem beginning with the second season. First round picks compensation can include the fifth year option (described below), and third through seventh round picks can earn the proven performance escalator (PPE - described below). Second round picks do not get the option and do not get the PPE. Contracts can include certain incentives described below.

Incentives

Incentives can be included, specific to playing time. Allowed for playing time incentives are based on when a player was drafted:

1s and 2nd round picks: Can include incentives of regular season playing time percentage of at least 35% in the first year, or 45% in any subsequent year of the contract.

3rd through 7th round picks: Can include incentives of playing time percentage of at least 15% in the first year, or 30% in any subsequent year of the contract.

Any performance incentive for less than the offensive or defensive playtime percentages described above or based upon the achievement of any other statistic or honor is prohibited.

Guaranteed Money

Teams can guarantee portions of rookie salary for skill, football-related injury and/or salary cap-related termination, but if they guarantee a given year, they have to do the same for the immediately preceding year. Thus, if you want to guarantee Year 3 salary for any particular reason, years 1 and 2 both have to be guaranteed. I don't know why a team would want to guaranteed year 3 or 4, but not the preceding years, but it is addressed anyway in the CBA.

Renegotiations

Drafted rookie: Contract cannot be renegotiated, amended or altered in any way until after the final regular season game of the player's third year.

Undrafted rookie: Contract cannot be renegotiated, amended or altered in any way until after the final regular season game of the player's second year.

Proven Performance Escalator

Only available for picks in rounds 3 through 7, and applies only to the fourth year salary.

Qualifiers - An eligible player will qualify for the PPE if he:

• Participated in a minimum of 35% of his Club's offensive or defensive plays in any 2 of his previous 3 regular seasons, OR
• Participated in a "cumulative average" of at least 35% of his Club's offensive or defensive plays over his previous three regular seasons.

Amount: The difference between the amount of the Restricted Free Agent Qualifying Offer for a Right of First Refusal Only in the player's fourth season and the player's year-four rookie salary (including incentives, roster and workout bonuses, but excluding the pro-rated signing bonus cap hit).

Example: Chris Culliver and Bruce Miller earned the PPE for the upcoming season. Given that they were in the 2011 NFL Draft, they were the first players eligible for it. Barring a drastic change, LaMichael James and Joe Looney are unlikely to earn the PPE for 2015. Both were slated to earn the league minimum $645,000 in 2014. Miller has since signed a contract extension, but Culliver is slated to earn $1,389,000 in 2014.

5th year option

Who: The fifth year option is only available for first round draft picks.

Exercise period: A team can exercise the fifth year option after the final regular season game of the player's third year, but must do so prior to the following May 3.

Fifth year salary, picks 1-10: Equals transition tender applied in fourth year of rookie's contract, for players at the same position at which the rookie participated in most plays during his third league year.

• Guaranteed for injury-related termination only upon exercise
• Guaranteed for injury, skill and cap-related termination if player is on roster at start of player's fifth league year
• Example: Aldon Smith option exercised; Aldon Smith option year figure settled

Fifth year salary, remaining first round picks: Same as above, BUT based on 3rd through 25th highest paid salaries (as opposed to top ten like normal transition amount).

• Guaranteed for injury-related termination only upon exercise
• Guaranteed for injury, skill and cap-related termination if player is on roster at start of player's fifth league year
• Likely (hopefully) applicable when Eric Reid is coming up on his fourth year

Holdouts: Since players can start renegotiating their deal after the third season, the CBA includes a clause covering holdouts as it relates to the fifth year option. If a player is late without excuse for training camp in his fifth league year (the option year), he can be fined $30,000 per day, plus one week's regular season salary for each preseason game missed.