Friday, April 25, 2008

NFL Needs a Rookie Salary Cap to Curb Outrageous Contracts

NFL Commissioner Roger Goodell, appearing on ESPN Radio Thursday, expressed his desire to change the current rookie salary structure. Goodell described a rookie salary cap as a good thing, noting the issue would eventually be taken to the owners.

As recently as February during his "State of the League" press conference, Goodell discussed the problem of ever-rising rookie salaries. He told reporters the league has discussed the issue with the NFL Players' Association and that the owners are open to the idea of redistributing the money. Ideally, the overall salary cap would be left unchanged, though a larger portion of the money would go to veterans who have proven their worth over a period of time.

Under a perfect system, the proven players would always make more money than players who have yet to step foot on an NFL practice field. As things are work not, players who are chosen in the top half of the draft often make more than the most accomplished players in the NFL at their positions. Even more, they rarely play up to their paycheck.

Need some proof? Look no further than last offseason's veteran and rookie signings.

2007 NFL Signings
  • Adalius Thomas (2-time Pro Bowl selection) signed a 5-year, $35 million contract
  • Troy Polamalu (3-time Pro Bowl selection) signed a 4-year, $33 million contract
  • Nathan Vasher (2006 Pro Bowl selection) signed a 5-year, $28 million contract
  • Travis Henry (3-time 1,200-yard rusher) signed a 5-year, $22.5 million contract
  • Marc Bulger (2-time Pro Bowl selection) signed a 6-year, $65 million contract
  • Dre Bly (2-time Pro Bowl selection) signed a 5-year, $33 million contract
2007 NFL Rookie Signings
  • JaMarcus Russell (1st overall pick) signed a 6-year, $64 million contract
  • Calvin Johnson (2nd overall pick) signed a 6-year, $54 million contract ($64 million with incentives)
  • Adrian Peterson (8th overall pick) signed a 5-year, $40 million contract
  • LaRon Landry (6th overall pick) signed a 5-year, $41 million contract
  • Gaines Adams (4th overall pick) signed a 6-year, $46 million contract
  • Joe Thomas (3rd overall pick) signed a 6-year, $42 million contract
While players like Adrian Peterson and Joe Thomas have earned their pay, others have not. Should LaRon Landry be making as much annually as Troy Polamalu? Should Michigan offensive tackle Jake Long, who signed a $57 million contract with the Dolphins on Tuesday, be the highest paid offensive lineman in the NFL? Long So far, the answer is no.

The Problem
The entire idea of the draft is to help improve losing teams by giving them first dibs on the best talent. Bill Polian, the president of the Indianapolis Colts, believes the combination of rising price of rookie salaries and the hit-and-miss nature of the draft is actually placing bad teams in even worse positions.

"The idea that the worst team would get help from a good player or players is out the window because you are saddled in salary cap hell if the guy is anything but an almost immediate Pro Bowler."

The result: bad teams dread high picks. More and more, teams desperately search for a way to trade down. In most cases, no team is willing to take the hit.

A Solution?
The NFL should look to another professional league, the NBA, for some advice. A rookie salary cap would work well for the NFL.

The NBA rookie salary systems, based off of draft position, works like this: Players earn a set salary as determined by the league for each draft slot. The first overall pick receives more than the second pick, the second more than the third, and so on. Each contract is for two years, with a team option for the third and fourth seasons. Built-in raises are added every year to compensate for increases in the average salary.

NBA Rookie Salaries
From 2005-2006 Season; Data in Thousands
Pick 1st Year 2nd Year 3rd Year 4th Year Increase Qualifying Offer
1 3,617.1 3,888.3 4,159.6 26.1% 30.0%
2 3,236.3 3,479.0 3,721.7 26.2% 30.5%
3 2,906.2 3,124.2 3,342.2 26.4% 31.2%
4 2,620.2 2,816.8 3,013.3 26.5% 31.9%
5 2,372.8 2,550.7 2,728.7 26.7% 32.6%
6 2,155.1 2,316.8 2,478.4 26.8% 33.4%
7 1,967.4 2,114.9 2,262.5 27.0% 34.1%
8 1,802.4 1,937.5 2,072.7 27.2% 34.8%
9 1,656.8 1,781.0 1,905.3 27.4% 35.5%
10 1,573.9 1,691.9 1,810.0 27.5% 36.2%
11 1,495.2 1,607.3 1,719.5 32.7% 36.9%
12 1,420.4 1,526.9 1,633.5 37.8% 37.6%
13 1,349.4 1,450.6 1,551.8 42.9% 38.3%
14 1,282.0 1,378.1 1,474.3 48.1% 39.1%
15 1,217.8 1,309.1 1,400.5 53.3% 39.8%
16 1,157.0 1,243.7 1,330.5 53.4% 40.5%
17 1,099.1 1,181.5 1,264.0 53.6% 41.2%
18 1,044.2 1,122.5 1,200.8 53.8% 41.9%
19 997.1 1,071.9 1,146.7 54.0% 42.6%
20 957.3 1,029.0 1,100.8 54.2% 43.3%
21 918.9 987.9 1,056.8 59.3% 44.1%
22 882.2 948.3 1,014.5 64.5% 44.8%
23 847.0 910.5 974.0 69.7% 45.5%
24 813.0 874.0 935.0 74.9% 46.2%
25 780.5 839.0 897.6 80.1% 46.9%
26 754.7 811.2 867.8 80.3% 47.6%
27 732.8 787.8 842.8 80.4% 48.3%
28 728.4 783.0 837.6 80.5% 49.0%
29 723.1 777.3 831.5 80.5% 50.0%
30 717.8 771.7 825.5 80.5% 50.0%

The actual contracts would have to be adjusted to work for the NFL, mainly for these reasons: the NFL has a different draft structure, the average NFL career is shorter, and the average salary is lower in the NFL.

In the NFL, draft picks are more valuable. First round draft picks in football would be the equivalent of players drafted in the top ten of the NBA draft. As a result, the late first round salaries would be increased. Additionally, the NFL would have to decided how to deal with important second and third round picks.

The average NFL career, due to the physical nature of the sport, is shorter and the risk of serious injury is always there. At the same time, the average NFL players earns half as much as an NBA player. An acceptable amount for a signing bonus would have to be determined.

The Only Thing Standing in the Way
The only thing preventing the NFL from moving to the rookie salary cap is the Players Association. According to NFLPA executive director Gene Upshaw, the rising price of rookie salaries only works to help veteran players in their negotiations.

"Those rookie contracts play a role in what a veteran gets," Upshaw said. "Because if the top guy in the draft just got paid $35 million in guarantees and he hasn't even proven himself, and if your contract is up as a veteran, I think it has an affect on what you're going to get. You think Peyton Manning isn't looking at JaMarcus Russell's contract? Of course he is."

Conclusion
In practice, the NFL rookie salary cap would curb the outrageous amounts that teams hand to unproven players. Players would earn a set salary as determined by the league for each draft slot. The first overall pick receives more than the second pick, the second more than the third, with the process continuing as far into the draft as the NFL sees fit. The system would free up more cap space to spend on the veterans that have shown over several years that they are quality players.

Unfortunately, the NFLPA sees the problem, agrees that it is absurd, but believes it is a benefit for their veteran players. ("Hey, look at that nobody making as much as me, a Pro Bowler. I want more money," the vets say.) Until something is changed, players like Jake Long will go from a college lineman to the highest paid offensive tackle in a league full of high-priced offensive tackles.
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2 comments:

Anonymous,  April 27, 2008 at 4:52 PM  

It's an idea. When comparing salary, I don't think the gross contract value should be used for two reasons.
First, rarely does an NFL player play out their entire contract without some type of negotiating of lowering, increasing or lengthening for more or less money. Secondly, most NFL contracts do not guarantee the full contract value. So, a player may sign a 50 million dollar contract, but only half may be guarantee over the life of the contract. The veterans make the majority of their money via signing bonuses, roster bonuses, and performance bonuses. This helps the player realize his fair market value and helps the team manage their salary cap.

It would appear that rookies in the 1st round make a large sum of money, but in reality I think it more in-line with veterans if not lower.

Anonymous,  April 27, 2008 at 9:19 PM  

This would also keep many so-so college football players from leaving as undergraduates. Most of the players that jump ship are really going to need that degree once they realize they can't compete at the next level. Wonderful Idea.

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