NFL owners pulled a fast one on players and the NFLPA during the 2011 collective bargaining agreement when they instituted the rookie wage scale. Before the latest labor agreement which extends to 2020, high draft picks were commanding large contracts before ever playing a snap at the professional level.
In 2008, the number one draft pick Jake Long signed a five year contract worth $57.75 million. In 2009, Matt Stafford signed a six year contract worth $72 million. But, perhaps the most used example of overpaying an unproven rookie came in 2010 when Sam Bradford signed a six year contract worth $78 million.
NFL owners and general managers were fed up with paying out huge amounts to unproven and sometimes injury prone talent. I get that, and I agree that players should earn their salaries over time. However, the pendulum swung too far in the opposite direction with the creation of the rookie wage scale.
In 2011, the first overall draft pick under the new rookie wage scale, Cam Newton signed a four year contract worth $22 million. The year after that, fellow first overall pick, Andrew Luck, signed the exact same contract. By simply being a couple years younger than Stafford and Bradford, Newton and Luck had to sign rookie contracts worth more than $50 million less.
In a smart and savvy move, Baltimore Ravens rookie quarterback, Lamar Jackson, didn’t hire a certified agent because he knew there was no negotiating his rookie wage scale. He hired a lawyer for contract review and saved himself an average agent cut of 15% of his $9,471,647 contract, or plainly, $1,420,747.
Rookie salaries are pretty much set along the lines of when a player is drafted. Aside from their initial signing bonus and guaranteed money, rookies have almost no leverage in their initial contract negotiations.
“I know coming in as a rookie, agents don’t negotiate anything really,” Jackson said. “You know you’re gonna get the salary you’re gonna get, and I decided I don’t need him. He’s going to be taking a big cut of my paycheck anyways, and I feel I deserve it right now.”
Before I learned more about it’s financial effects on young players, as a fan, I loved the rookie wage scale. It’s not my job to fit 53 players under the 2018 $177.2 million salary cap. General managers like Mickey Loomis strike gold when they draft players like safety Marcus Williams and running back Alvin Kamara outside of the first round.
These overachieving players produce exponentially more than their rookie wage scales compensate them and their labor is guaranteed to cost little against the salary cap for four years. It’s no wonder general managers prefer younger players on rookie wage scale contracts over proven veterans on veteran minimum contracts.
But a productive rookie drafted later than a productive rookie drafted early is even more valuable to a team trying to stay under the cap. That’s because an earlier draft pick’s salary increases much more in each succeeding season following their rookie year.
In their first season, first rounder Marshon Lattimore, second rounder Marcus Williams, and third rounder Alvin Kamara all made $465,000. Every year after that, however, their pay gaps increase, and perhaps the most noticeable pay gap among them was found in their signing bonuses.
Lattimore received a $9,310,591 signing bonus. Williams received a $2,678,501 signing bonus. Kamara received a $972,772 signing bonus.
In their second season, Lattimore’s salary is $1,163,162; Williams’ is $748,656; and Kamara’s is $635,000. Over their entire four year rookie contracts, Lattimore will make $15,359,563; Williams will make $6,240,439; while Kamara will make $3,857,772.
Lattimore’s signing bonus represents 60.6% of his total earnings through his four year contract. Over the same period of time, Williams’ bonus represents 42.9% of his total earnings, while Kamara’s bonus is only 25% of his total earnings. Those signing bonuses are crucial to understanding the true value of a player’s contract through their first four years.
Lattimore won Defensive Rookie of the Year and Kamara won Offensive Rookie of the Year. Including Williams, all three players are potentially generational talents that impact the team almost equally on their side of the ball, but because of which round they were drafted in, they stand to make incredibly unequal salaries.
In fact, if a player isn’t drafted in the top 10 overall, they stand to make significantly less than their 10 peers who are. First, all rookies must sign a four year deal, which to me, is a travesty, because the average NFL career is only 2.66 years long.
When the Social Security Act was signed by Franklin Delano Roosevelt in 1935, the average life expectancy was 65 years old, the very same age when one would begin collecting social security.
So, the government was betting on the fact that most Americans wouldn’t even live long enough to collect the benefits of social security after paying into the system their entire lives. The NFL’s approach to compensating young players is no different.
Owners know most players are out of the league before they sign their second, more lucrative free agent contract. This is why I believe that if the rookie wage scale continues past the 2020 CBA, the players, along with the NFLPA better make sure it’s shortened to two years.
I think most coaches know whether a player is going to be good, great, or terrible within their first couple seasons. I mean, weren’t we all obsessed with Kamara by week eight last year?
Especially for positions like running back (where a player hits their prime in their early to mid 20’s and their production wanes around age 30), a player may only get one chance to sign a long term free agent deal during their entire career.
If they were a first round pick, it’s very possible they won’t get a chance to negotiate a new contract until their sixth year in the league which is more than twice the length of an average NFL career.
Le’veon Bell, who is continuing his holdout into this season, knows this. He is 26 years old and due just over $14.5 million after being franchise tagged for the second year in a row. He even threatened to retire if the Steelers tagged him again after playing on a $12.1 million franchise tag in 2017.
Because he accounted for more than 30% of the Steelers’ offense, nearly 25% of their touchdowns, and 20% of their receptions over the past two seasons, Bell wanted to be paid like a wide receiver/running back hybrid.
Before the Rams’ Todd Gurley signed his extension averaging $14.375 million this past year, the highest paid running back was the Falcon’s Devonta Freeman at $8.25 million per year. The running back position had been steadily decreasing in contract value in recent years.
But Gurley’s extension and Bell’s holdout signal a shift in the salary landscape of a position that had been regularly compensated only about 25% of the average quarterback salary, 70% of the average wide receiver salary, and 85% of the average tight end salary. I think we can all agree Kamara deserves at least, if not far more than tight end Ben Watson’s $2 million per year.
To many, it has always seemed better to be picked in the first round, until one realizes an important catch: the fifth year option. Teams can decide whether or not to place the fifth year option on their first round picks after their third season, but they must make that distinction before their fourth season.
Any player selected in the top ten must receive a salary that is the average of the highest paid 10 players at their position. The Raiders’ defensive end/linebacker Khalil Mack fell into this category and would have made $13.9 million this year before his holdout forced a trade to the Bears and a new contract worth around $23.5 million per year.
Any player selected between 11 and 32 must receive a salary that is the average of the third to 25th highest paid players at their position. The Rams’ defensive tackle Aaron Donald, who was picked 13th overall, fell into this category; and though he was just as defensively disruptive and dominant as Mack, he stood to make $6.892 million.
That’s a huge difference, and only three spots in the draft effectively cost Donald almost $7 million before his holdout forced the Rams to open their vaults and sign him to a new extension worth around $22.5 million per year. Guess who was picked 11th last year? Marshon Lattimore.
So it seems to me, if you aren’t drafted in the first 10 overall, you might not even want to be drafted until the second round since then you can at least get out of your unfair contract after four years instead of five.
Players who have entered the league since 2011 are getting hip to the unfairness of the rookie wage scale. And because the average length of an NFL career is less than three years, those becoming hip to fully-guaranteed contracts and the like, represent the majority of the present NFL workforce.
I’m not saying Lattimore, Williams, or Kamara should holdout next year or the year after, and as a fan, I certainly hope they don’t. But if they continue to play like they did last year, they will have absolutely earned the right to.
It’s no secret Kamara’s personality has lead us to believe he’s smart with his money and thankful for the opportunity to earn a handsome living on the football field. He walked home from the Superdome after home games last year. He has kept only a close group of trusted friends in his inner circle.
His latest reading material has included The Seven Stages of Power and Healing, which creates a comprehensive guide to energy healing through Hindu, Christian, and Kaballah traditions. When he received his $972,772 signing bonus, he said, “I put that sh*t in the bank and I went and got some motherf***ing wings.”
Kamara has been through plenty of ups and downs before he made it to the NFL, and he has demonstrated his growth and maturity along the way. The fact that his rookie contract ends in 2020 (the same year the next CBA negotiations commence) probably means he’s out of luck on negotiating an extension with the perpetually cash-strapped Saints before then.
In 2020, the Saints will need to address the contracts for Williams and Kamara, if they haven’t already. That’s assuming they exercise the fifth year option on Lattimore and Ramczyk to buy them an extra year before they have to pay them fairly in 2021. This is also assuming a fifth year option still exists under the new CBA.
But if I were Mickey Loomis, I would stop operating the team’s finances as if these over-producing and under-paid players are content just to be in the league. The holdouts of Le’Veon Bell, Aaron Donald, and Khalil Mack should serve as the proverbial canary in the coal mine for general managers of all 32 teams.
Players are wising up to the inequities of the rookie wage scale, and they aren’t going to wait until 2020 to do something about it.