Although many have failed to report this, the NFL does have a rookie salary cap.
It’s called the “entering player pool” in which a number is given to each team after the draft depending on the location of its draft selections. So in a way, the rookie cap is a sort of defined “recommendation” on what each team should pay its draft choices similar to Major League Baseball, with the added kicker of a cap.
The rookie cap – a subset of each team’s overall cap – is not a large number in the NFL. The average rookie cap is around four percent of the team’s overall cap, a miniscule amount of cap tied up in all the drafted and undrafted rookies on the roster.
Thus, the problem with the system in the NFL is certainly not the allocation of rookie contracts to the cap.
The problem is cash, not cap, especially at the top. Due to the increasing leverage of players at the top of the draft, the cash outlays to top picks have become a source of consternation to league officials and veteran players every year.
This year, we’ve seen guaranteed amounts of over $41M to Matthew Stafford, the highest guarantee in the history of the NFL, and $28M to Mark Sanchez.
Having said this, the problem is limited to a handful of players every year, but it’s those players who get the attention of the media. No one writes about players on their rookie contracts making less than $500,000 in their third year in the league.
Due to the operation of the rookie pool, there are a myriad of rules and regulations that have to be navigated in every contract to avoid pool charges yet provide the player the amount set by the marketplace.
As a result, these contracts end up being up to 60 pages long, most of which is simply language to keep money out of the rookie cap. For example, Sanchez will not receive a signing bonus in 2009, simply around $2.5M of salary, which will be his cap number to squeeze into the rookie pool.
However, he will reportedly receive more than $30M over the next three seasons. That’s the weird dichotomy between cap and cash with these rookie contracts.
NFL teams do have to squeeze their picks into a cap, and the functional reality is that 50-55 percent of each team’s rookie cap -- and a much higher percentage of cash --ends up going to the top pick.
There is much debate about the players at the top, but the vast majority of rookies represent fixed and reasonable costs for their teams.
Having summarized these rookie contract issues, here’s the bottom line on players entering any of these leagues:
The goal is to get to the second contract. Except for a few aberrations – bonus babies such as the “S” boys, Stafford, Sanchez and Strasburg – the real money will be on the next contract, not this one.
Although there’s a lot of attention paid to what these rookies make coming into the league having not played a minute of professional sports, these contracts pale in comparison to veteran contracts, especially the lucky few who reach the mother lode of free agency.