At this time last year, the league was still embroiled in the all encompassing lockout. The lockout ended July 25th, 2011 with the new Collective Bargaining Agreement (CBA) between the league and the players union.
Much of the new CBA was the same as the previous agreement but there were some distinct differences, as well. One substantial change was the introduction and agreement of a rookie wage scale that took much of the bargaining and pressure out of the first rookie contract and allowed teams and players to focus on getting players into camp on time and sufficiently compensated.
After reviewing some of the CBA language I thought it would be interesting to breakdown some of the basics of how this rookie wage formula works.
The way that the salaries for rookies are calculated has it's genesis in what is termed "rookie allocation" in the CBA. The rookie allocation is determined using calculations of percentages of the overall Salary Cap and the rookie allocation for each player is determined, per the CBA, "based upon the number, round and position of the Club's selection choices in the Draft."
Obviously, much of the inner workings of each player's salary is confidential between the player, agent, team and league. However, as with much of the league, some details are leaked to the media. We can use some of these leaks to get an idea of how much drafted players will make in each year of their contract.
There will be some details to which we are not accounting in this example. For instance, some contracts will have extra bonuses in addition to the signing bonus which could include areas as offseason workout bonuses, compensations for community relations/sponsor appearances, weight bonuses, etc.
As an example, let's take the Raiders highest draft pick in 2012, lineman Tony Bergstrom.
Per Paul Gutierrez of CSN, Bergstrom's first year allotment under the rookie allocation system is $516,504.00.
There are two calculations that need to take place on this allotment number to be able to correctly calculate Bergstrom's yearly salary.
First, his signing bonus:
To calculate a player's signing bonus, we take the year one allocation number, subtract the minimum rookie salary for the year and then multiply by 4, which is the number of years in the contract over which the bonus will be spread.
So, for Bergstrom's salary bonus we take his allotment of $516,504.00 and subtract the 2012 rookie minimum which is $390,000.00. That subtotals $126,504.00. That is amount of signing bonus money the player will make per year of the first 4 years of the contract. After the 4th year, the club has an option to pick up a fifth year for first round players. Even if the player is a 1st round player, however, because the 5th year isn't a guarantee the bonus is spread out for the 4 year life of the contract.
The total signing bonus will be $126,504.00 times 4 which equals a total signing bonus of $506,016.00.
Next, we calculate the base salaries for Bergstrom:
To do this we take our year one allocation number at 25% and the resulting number is the incline factor for the salaries – that is the amount that the player's salary increases each year.
Again, Bergstrom's year one allocation number is $516,504.00. 25% of that allocation number is $129,126.00. This means that Bergstrom's salary will increase by $129,126.00 each year of his contract.
Bergstrom's base salary in 2012 will be $390,000.00, the rookie minimum for 2012. He will have his prorated bonus amount of $126,504.00 as well. That means that his salary cap number will be $516,504.00 (you may notice that that number is the same as his year one allotment).
My understanding of the language in the CBA is that workout bonuses and the compensation for the community relations/sponsor appearances are specifically excluded from being considered "likely to be earned" and does not count against the cap. Some other bonuses can count against the cap and would need to be considered including, for example, language for incentives for playing time whether or not the team actually believes those incentives are likely to be earned.
So, we know that Bergstrom's 2012 number is likely at or very near $516,504.00. We have earlier calculated that his incline factor or the amount his salary will increase each year, is $129,126.00. So, each season through year 4 of the contract simply escalates by that amount.
So, taking that information, here will be the salary numbers (base plus prorated bonus) for Bergstrom over the first 4 years of his contract:
2013: $645,630.00 ($516,504.00 plus $129,126.00)
Because Bergstrom was not a 1st round player there will not have a 5th year club option. In a situation with 1st round players the 5th year salary is an average of the top 10 salaries at that player's position if the player was picked in the top 10 and an average of the top 1/3 of the salaries at that player's position if they were selected 11-32 in the first round.
Players taken in later rounds may not have an incline factor that increases their yearly salary much. In that factor, players will make the league minimums for their amount of years earned.
Here are the 2012 contract minimums that would effect a player in their rookie contract:
Rookies = $390K
1 yr in NFL = $465K
2 yrs in NFL = $540K
3 yrs in NFL = $615K
Remember to add in the prorated salary bonus on top of the minimum salary.
Try some calculations for yourself. Per Paul Gutierrez, here are the rookie allotments for the Raiders draftees this year:
Tony Bergstrom: $516,504.00
Miles Burris: $465,146.00
Jack Crawford: $435,606.00
Juron Criner: $426,140.00
Christo Bilukidi: $415,966.00
Nathan Stupar: $402,588.00
For more Raiders news and analysis, follow me on Twitter @AsherMathews
Some other bonuses can count against the cap and would need to be considered including, for example, language for incentives for playing time whether or not the team actually believes those incentives are likely to be earned. Thanks for letting me to stopped by.
@AsherMathews is that all you got? I expect better than "rookie salaries"! Just kidding another good read! Very informative!
@AsherMathews great piece on the rookie salaries! Really informative and made sense. I have two questions that I'll tweet separately.......
@AsherMathews I saw the tweet and just replied. Haven't had a chance to read it yet, but definitely will. Thanks again.