Gone are the days when rookie contracts are heavily negotiated, limiting some players’ need to hire an agent and giving teams more flexibility in making their choices. The league now operates using a rookie wage scale for incoming NFL players, reducing what had become a series of outrageously expensive deals for players who didn’t always pan out.
With the elimination of a huge payday right out of college, the importance of spending wisely has been a growing trend. There’s more education for young players on how best to make their money last, in a league where job security doesn’t really exist.
My advice to 2020 rookies:— Byron Jones (@Byron31Jump) April 23, 2020
DO NOT SPEND YOUR MONEY. That number you see on your contract is fake. You will pay roughly 40% to 50% in taxes, agent fees, union dues, 401k account + necessary insurance. Also, a large portion of your contract is NOT GUARANTEED. (1/5)
Do not live a lavish lifestyle. Although your mom may deserve it, she does not need a $100,000 car. She does not need a $1,000,000 house. It is not the time yet. If you protect your money early, you can live a comfortable life forever and provide for your family. (2/5)— Byron Jones (@Byron31Jump) April 23, 2020
That echoes what his teammate, linebacker Jerome Baker, heard when he entered the NFL in 2018. At Ohio State’s pro day that year, Baker — a third-round pick for the Dolphins — spoke at length about the advice he’s gotten throughout the draft process, most notably regarding making smart financial decisions.
“Not every football player is a millionaire. Just throwing it out there,” Baker said. “We’re not rich, we’re not. Once you throw in the taxes and the things you have to pay for, you’re not that rich.”
Now that there’s a cap on rookie deals, there’s even less time for players to make their mark on the league and more importance on signing an unrestricted second contract.
What is the rookie wage scale?
The wage scale boils down to the top draft pick getting the biggest deal, and a scaled back dollar amount for each pick thereafter. The further players slide down draft boards, the less salary they’ll see and get less in guarantees.
Each drafted player gets a four-year deal, and first-round picks have a fifth-year option built in for teams that must be exercised between the players third and fourth years. Undrafted free agents are also subject to the rookie wage scale, but are only eligible for three-year contracts.
What is the wage scale for 2020?
Teams had money allocated against the salary cap before the draft, based on the rookie pool and the league’s salary cap, which in 2020 is $198.2 million. Each team’s rookie pool will look a little different based on their salary cap situation, but a safe calculation is $610,000 (the first-year minimum) times the number of draft picks.
How much are this year’s rookies getting paid?
Last year, No. 1 pick Kyler Murray signed a four-year, $35.2 million with the Arizona Cardinals. His base salary was $495,000, but with a large signing bonus, his total cash earnings was more than $24 million in 2019.
The final pick in the draft, Caleb Wilson, was also drafted by the Cardinals. He signed a four-year, $2.59 million deal, but he didn’t earn that much because he was waived before the season started and later signed to the practice squad.
In 2020, the Bengals will most likely take quarterback Joe Burrow with the first pick. His deal is expected to be worth around $37 million:
#1 Overall Contracts— Spotrac (@spotrac) April 23, 2020
’20: TBD, $37M(ish)
’19: Murray, $35M
’18: Mayfield, $32.6M
’17: Garrett, $30M
’16: Goff, $28M
’15: Winston, $25.3M
’14: Clowney, $22.2M
’13: Fisher, $22.2M
’12: Luck, $22.1M
’11: Newton, $22M
’10: Bradford, $78M
Using Spotrac’s projections, here’s the average salary in total value for players drafted in each round:
First round: $18.4 million
Second round: $6.9 million
Third round: $4.4 million
Fourth round: $3.3 million
Fifth round: $2.95 million
Sixth round: $2.8 million
Seventh round: $2.7 million
When and why was it enacted?
An agreement was made between the league and the NFLPA during the lockout in 2011, applying a rookie wage scale for draft picks as part of the new Collective Bargaining Agreement. Heading into negotiations, teams were upset that they were having to empty their wallets for first-round picks — which were nearing franchise QB numbers — and veterans were mad that rookies were outearning them.
In March 2020, the NFL and NFLPA negotiated a new CBA, which included higher increases for rookie minimums and the subsequent years of their contracts.
Can players re-negotiate their rookie contracts after Year 1?
No. Players aren’t able to negotiate salary until their fourth year, which has been an issue for players who excel after having fallen to a later round of their draft. Seahawks QB Russell Wilson was a third-round pick in 2012, and despite leading his team to the Super Bowl in 2013 and 2014, didn’t see over $1 million a year base salary until his second contract in 2016.
This new reality has led to some new advice being handed down to incoming players. Baker noted at his pro day that former NFL safety Mike Doss told him, “your first contract, just save everything.”
This echoed the advice he got from 2016 draft pick Joshua Perry, who told the Baker, “Second contract might be different, but the first contract, you’re not rich.”
Whether it be to injury, a deep roster or a host of other hurdles, rookies have an uphill battle to become a roster lock in the league. Until they do so, it’s imperative they make wise financial decisions to ensure the money from their rookie contract lasts.
Do rookies still need to hire an agent?
As the rookie deals and how team’s utilize them evolves, so do the questions that incoming NFL players have to ask themselves, including whether to hire an agent.
For someone like Joey Bosa in 2016, having an agent to act on his behalf was beneficial. The 2016 No. 3 overall pick ended up missing the first four games of his rookie season due to a hold out in training camp over contract terms. While salaries aren’t up for negotiation, signing bonuses and offset language are — Bosa ended up getting four years guaranteed and the largest signing bonus ($17 million) in Chargers’ history. (He went on to win Defensive Rookie of the Year, so it worked out for both parties.)
Those types of negotiations don’t happen often, though, and players like Ravens first-round pick Lamar Jackson decided to forgo hiring an agent altogether. Instead, the quarterback has a manager (his mom) and a lawyer to help with all the backend stuff. There was a big stink made from various outlets about Jackson’s decision, but he spoke about his choice to represent himself back at the NFL Scouting Combine.
“I know coming in as a rookie, agents don’t really negotiate anything really,” Jackson said in March 2018. “You’re going to get the salary you’re going to get, or whatever, and I decided I don’t need him. He’s going to be taking a big cut of my paycheck anyway, and I feel I deserve it right now.”
Baker Mayfield, the No. 1 pick in 2018, also hedged on the possibility of going without an agent through the draft process, but ultimately decided to add one to his arsenal. There are pros and cons for each player as they decide whether to hire an agent, and despite a long list of pros, losing out on a big chunk of money right out of college can’t be ignored either.