If you’re like most guys reading this post, you couldn’t care less about the rookie wage scale, you just wanna get the NFL.

I get that.  Besides, it’s not like it’s something you absolutely “need” to know.

But let’s talk about it anyways.

>>Related: NFL Contracts: Explaining the New NFL Rookie Salary Scale

Four-Year Deals for All Rookies

cam1 199x300 NFL Contracts: Explaining the New NFL Rookie Salary Scale

Panthers’ quarterback Cam Newton’s four-year, $22 million rookie deal was much less than what Sam Bradford got the year before, due to the new rookie wage scale. (ICON Sports)

 

The new rookie wage scale set by the latest CBA mandates that all rookie deals are four-year deals.

Players taken in the second round and on get straight-up four year deals; teams are granted a fifth-year option for players taken in the first round.

This means that teams can choose to keep the player around for a fifth year, if they want.

The catch, is that the team has to decide on whether or not they’re going to keep that first round pick after the third year of the contract, and before the start of the fourth year.

If they don’t exercise that option by then, the player is free to hit free agency after that fourth year.

>>Related: NFL Contract Negotiations – A Little-Known Glitch that Can Slow Down Negotiations for Top Picks

 

Fifth-Year Salary is Guaranteed

 

If the team exercises their option for the fifth year, the player’s fifth year salary is guaranteed.

The amount of money you make on that fifth year salary depends on your draft position.

If you’re drafted in the top 10, your fifth year salary will be the average of the salaries of the top 10 players in the league at your position.

If you’re drafted 11th-32nd in the first round, your fifth year salary will be the average of the third to 25th highest paid players in the NFL at your position.

 

Rookie Deals Done Fast

 

Heading into the 2012 season, rookie deals are getting done way faster than in the past.

One of the reasons, is because there’s now an “official” cap on the amount of money teams can spend on rookies (also known as the “year one rookie compensation pool”).

>>Related: NFL Contracts – 15 Ways NFL Players and Teams Gain Leverage in Negotiations – Part One

Because there’s a cap, there’s not as much wiggle room for agents to negotiate deals for their clients; things are more set in stone.

The league assigns a pool number to each team.  Each team’s number is different.

The number assigned to a team is based on the number of picks a team has in the draft, as well as the positions where those picks reside in the draft.

 

 

 

 

Another reason why deals are getting done so fast, is because teams and agents don’t have to fight negotiate the length of the contracts any more, since all rookie deals are for four years now.

Also, under the new CBA, deals have been simplified, to the point where they only include base salaries, signing/workout bonuses and performance incentives, so there’s not as much to negotiate.

Team’s choosing to be stingy with signing bonus money is about the only thing that holds up rookie deals nowadays; other than that, everything is pretty much cookie-cutter.

>>Related: NFL Contracts: What in the World is an Escalator Clause?

 

Year One Rookie Compensation Pool Example

 

In 2011, the San Francisco 49ers Year One Rookie Compensation pool was capped at $6,935,903, and the floor was  $5,115,676.

In other words, the amount of money they spent on the first year salary for every player taken in the 2011 Draft had to fall between $5,115,676, and $6,935,903.

 

Total Rookie Compensation Pool

 

Now I forgot to mention this earlier, but the wage scale also limits the amount of money that can be spent on the total value of the rookie contracts, including bonuses.

This is called the “total rookie compensation” pool.

So sticking with the 49ers’ 2011 situation, the league put a cap on the value of all their rookie contracts at $38,147,464.

In other words, if all their 2011 draft picks play-out their four-year rookie contracts, the total amount of money the 49ers can spend on paying these players over those four seasons $38,147,464.

>>Related: NFL Contracts: What the Heck is a “Voidable Year?”

 

Year-One Formula Allotment

 

The “Year-One Formula Allotment” assigns an approximate year-one compensation value on every pick in the draft.

Teams use this as a guide on how much to pay rookies for their rookie seasons, so this helps speed up contract talks for rookies, as well.

 

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