clock menu more-arrow no yes mobile

Filed under:

CBA 101: The Draft and Rookie Contracts

Part two in an ongoing series meant to demystify the Collective Bargaining Agreement between the NFL and the NFLPA in preparation for Free Agency and the 2014 NFL Draft.

Debby Wong-USA TODAY Sports

In the last article, we discussed some common terms in the NFL and the CBA. Today we will be moving on to the NFL Draft and Rookie Contracts.

The Draft

Drafts and Eligibility

The College Draft, also known as the Primary Draft, or just the Draft, must occur between February 14 and June 2 each year, as determined by the Commissioner. This year it starts on May 8. Eligibility for the draft is based off of when the player graduated from High School, beginning three NFL Seasons (note: Not League Years) after their graduation from high school. A Supplemental Draft may occur after the Primary Draft, and no less than a week before the beginning of training camp, for players who become eligible after the Draft.

Notable recent Supplemental Draftees were Terrelle Pryor, in 2011, and Josh Gordon, in 2012. Each had a multitude of off-field issues and opted for the draft rather than face suspension.

Draft Rounds and Picks

There are seven rounds in the Primary Draft, and each team receives a pick in each round. These picks can be traded away, or lost through the signing of free agents or sanctions. Teams can also receive Compensatory picks in rounds 3 through 7, with the maximum number of picks being equal to teams in the league. The awarding of these picks is based off of players gained and lost in Free Agency, and their relative quality. If a team gains and loses the same number of Free Agents, they are only eligible to gain Compensatory Picks in the 7th round. If they lose more Free Agents than they gain, they may gain picks as high as the 3rd round, but this would require losing a very high dollar free agent and not resigning a similarly priced one.

From the Chargers perspective, we did not receive any compensatory picks in the 2013 NFL Draft. Last year, we signed 15 free agents, lost 14 that stuck with other teams, and resigned Ronnie Brown. The total contract value for the last League Year was about $22 Million for players gained, and $20 Million for players lost. Long story short, the Chargers should not expect to receive much (if anything) as far as Compensatory Draft picks go. The Chargers last had a Compensatory pick in 2012, which we used to select Edwin Baker in the Seventh round.

Draft Rights

A player selected in any round must be tendered a 4-year contract for the Minimum Salary. This mostly applies to player selected in later rounds, as early round draftees can and do receive much more. This is covered in the next section. The drafting club may trade a draftee up to 30 days before the first regular season game of the season, after which the rookie may only sign with the drafting club. Rookies must sign their contracts by the 10th game of the season or risk forfeiting the right to play for the rest of the season. If a rookie were to choose not to sign for the entire season, they would be eligible to be drafted in the following draft by any team other than the original drafting team. After this, if the player goes till the date of a third draft, without signing a contract, they default to Undrafted Rookie status, with the right to sign with whomever.

It is also worth noting that if a player is drafted, but opts to play in another league, the drafting team still maintains rights to the player if they decide to play in the NFL. This last for three years, after which, the drafting team maintains RoFR only. A notable example of this is Raghib Ismail in 1991. He chose to sign a contract with the Toronto Argonauts of the CFL before the NFL Draft. Instead of going as the number 1 pick, he was selected by the Los Angeles Raiders in the 4th round, with the 100th pick. He would later sign a contract with the Raiders in 1993, where he played for 3 years.

Rookie Contracts

Rookie Compensation Pool

Besides the Salary Cap, teams have limits on how much they can spend on rookie salaries and how much they can spend on individual contracts. This is further split up between what must be spent the first year and the total for 4-year contracts. The pool itself is league-wide, and is split up amongst the teams according to the number of draft picks they have and the relative position of those draft picks. The more picks a team has, and the earlier they pick in a round, grants them a greater percentage of the pool. The pool was set at $874.5 Million in 2011 and, with the .5% and 2% increases to Salary Cap in 2012 and 2013, respectively, increased to $896.45 Million last year. With the Cap expected to jump up to $133 Million, the pool should increase to about $955.3 Million. (Note: An increase in Salary Cap of more than 5% only increases the pool by 1/2% for each percent beyond 5. So rather than increasing by 8.1%, it increases by 6.6%.)

Follow this link to see my estimates on the Rookie Contracts for each pick. (Credit: Link; I disagree with the assumption that signing bonuses will be frozen this year, thus the difference in our numbers.)

Contract Specifics

Depending on whether the player is drafted in the first and second rounds, or if they are drafted later, contracts tend to take one of two formats. However, regardless of where the player is drafted, their starting salary is the minimum for a player with 0 AS.

1st and 2nd round draftees

The main difference with these draftees is the proportion of signing bonus allocated to them, and the amount by which their salary escalates in later years. There is a provision in the CBA called the 25% Increase Rule that states salary plus bonus cannot increase by more than 25% in each year after the first year of the contract. In practice, this means that the contracts of 1st and 2nd round players do increase by 25% each year.

Example: D.J. Fluker signed a 4-year, $11.4 Million contract last year. This pays, in each year, respectively: $2,073,182, $2,591,476, $3,109,771, and $3,628,067. His signing bonus was $6,672,730, which prorates to $1,668,182 annually. His first year Minimum Salary was $405,000, which when added to $1,668,182 equals $2,073,182. Multiply that by 1.25 and you get $2,591,476, and so on.

Early draft picks are also far more likely to have their salaries guaranteed. Early 1st round picks will have all of their years guaranteed, while later 1st round picks will have the first 3 years guaranteed. Second round players can expect anywhere from the first three years, to the first two years, to just the first or second year, to be guaranteed. Split contracts are unlikely in these rounds, as well. A 1st round draftee can be extended a fifth year on their contract. This must be performed after their third season and receive a tender that meets the terms for a Transitional Player. The tender is higher for the first 10 draft picks than it is for the any other player selected in the 1st round receiving this fifth year tender.

3rd to 7th round draftees, and Compensatory Selections

Later draftees are subject to a few different salary escalation rules. First off, their salaries tend to not escalate at the 25% rate, but rather at the Minimum Salary rate for their expected AS and League Year. They are also often tendered a Split Contract that pays different amounts depending on whether the player is on the Active/Inactive list, or on IR or the PUP list. As you might assume, they are paid less if they are not on the active roster. The final difference is that it is unlikely that a player will receive any guaranteed money beyond their signing bonus.

To offset this, there exists a mechanism called the Proven Performance Escalator. If a player participates in 35% of the total offensive or defensive snaps for the first three seasons (total), they can have their 4th year salary increased to the equivalent of a contract for a similar Restricted Free Agent, but with all of the same bonuses as established in their initial contract.

Example: Keenan Allen signed a 4-year, $2,813,800 contract. His signing bonus was $613,800 which prorates to $153,450 per year. His base salary for each year, in order, is $405,000, $495,000, $585,000, and $675,000. These numbers correspond to the League Year 2014 Minimum Salary for a player with 0 AS, the LY15 salary for a player with 1 AS, and so on. If he continues to play as he has, and doesn't demand a new contract next year, expect his 4th year base salary to increase significantly.

I hope I didn't lose you just two posts in. This was a meaty one. Get ready for more of the same next week as we tackle Restricted Free Agents.