Post-NFL lockout, What's really changed? Rookie Contracts

$63 million? For this guy!?

The NFL labor dispute ended earlier this week after months of tense and difficult negotiations. For a while, it became a waiting game for disappointed fans, while the players and owners argued over new revenue sharing rules, post-career benefits for players, and whether to switch over to an 18-game season. These were not the only arguments, but they certainly were the ones the average fan heard the most about. Well, the 18-game season has been put aside until after the 2013 season, and revenue sharing and post-career benefits are subject that go right over the average fan's head. So what has really changed due to the new collective bargaining agreement? Well, the rookie pay scale has made an enormous difference in this offseason.

Before the new CBA, there were complaints from both the players and the owners that unproven players were often commanding ridiculous contracts. It would be a lie to say that that is no longer the case, especially considering that Kevin Kolb signed with the Arizona Cardinals for $63 million. Yup, that's right: 63 million big ones. For those at home who aren't keeping score, that's $21 million per win on his resume. The Carolina Panthers alone have paid  $76 million ($30 million guaranteed) for defensive end Charles Johnson, $22 million for LB James Anderson, and also resigned LB Thomas Davis to a five-year deal. That's well over $100 million to re-sign players who played for a 2-14 team! However, the new rookie pricing system has entirely changed the format of rookie contracts for the better.

Think back to last year's draft. For those who don't remember, the first overall pick was quarterback Sam Bradford, who went to the St. Louis Rams. When he was signed to a contract, he ended up getting paid $78 million dollars, (potentially up to $86 million with incentives) and $50 million guaranteed. This was the largest rookie contract ever. At the time, it was more than Matt Ryan, Aaron Rodgers, Ben Roethlisberger... almost any other player in the NFL. After the lockout, however, things changed... drastically.

There were three quarterbacks taken in the 2011 NFL draft at numbers 1, 8, and 10 overall. The Jacksonville Jaguars signed Blaine Gabbert, the number 10 pick and a potential franchise QB, for $12 million. Less than 20% of the price of Bradford. Even Cam Newton, who (like Bradford) was picked first overall, only made $22 million. The thing is, all of that money is guaranteed.

 

Fans who don't often follow the NFL are scratching their heads wondering why a fully-guaranteed contract is so rare, but NFL fans know that NFL contracts are almost never paid in full. After a brief controversy, wherein he was pulled during the 4th quarter of a game, Washington Redskins quarterback Donovan McNabb, was given a one-year, $12.5 million contract extension to prove that the team was committed to him. How much of that money did McNabb collect? Zero dollars and zero cents. He was traded off of the Redskins and re-negotiated his contract in the process.

 

Players in other sports commonly get paid in eight digits, sometimes nine. In the baseball world, Alex Rodriguez even signed a $250 million contract to play for the Yankees for essentially the rest of his natural life. With a salary cap of around $123 million in 2011 and 53 players on the active roster, there's no way an NFL team could pay a player $25 million a year and still afford to put together a good team. If a player signs a four year contract for $30 million with $8 million guaranteed, it wouldn't be unusual to see that player wind up with about $12 million dollars after year two. Players and fans alike are fooled by the perceived bottom line. Now, that's no longer the case for rookie contracts.

Players are getting less money, but all of it is guaranteed. The Carolina Panthers might (though undoubtedly won't) only have Cam Newton for one year. If that's the case, they have to pay him $22 million. If he plays his full four years, he makes that same $22 million. It seems odd that more players haven't been trying to negotiate fully guaranteed contracts for years, but it works out well for all sides to have guaranteed contracts. For one thing, it allows the players to be assured of their paycheck, while also letting the teams spend more on veterans and free agents who have proven themselves.

It will seem odd to compare last year's rookie contracts to this year's players, but the new rookie contract system is not just a huge change to the NFL's fiscal landscape, it is a good change.

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