How Do NFL Rookie Contracts Work?

How do NFL Rookie Contracts Work? Learn about the different types of contracts and how they are structured to ensure that teams are able to compete year after year.

Introduction

In the National Football League (NFL), a rookie contract is a contract given to any player who did not play professional football before joining the NFL.

A typical rookie contract will be for four years, with yearly salaries increasing each season. After the fourth year, the player will be eligible for an extension, which can be for any length of time.

The salaries in rookie contracts are not as high as those given to veteran players, but they are still very lucrative. In 2020, the average salary for a rookie was just over $1 million per year.

Rookie contracts are not guaranteed, meaning that if a player is cut from the team before their contract is up, they will not receive any money from the team. However, most players do receive some guaranteed money in the form of a signing bonus. This bonus is typically paid out over the first two years of the contract.

While most rookies sign their contracts without much negotiating, there are some who hold out for more money. This usually happens when a player is drafted higher than expected and believes they are worth more than what the team is offering.

The Basics of an NFL Rookie Contract

NFL rookies are signed to four-year contracts, with the team holding an option for a fifth year. The total value of the contract is based on the draft position of the player, with higher picks receiving larger contracts. The contracts are guaranteed, meaning that if the player is injured and cannot play, he will still receive his salary.

Length of Contract

All NFL contracts are not created equal. Unlike Major League Baseball, there is no standard contract length in the NFL. The typical rookie contract is four years, but first-round picks often receive contracts that are worth more money and have an option for a fifth year. These “fifth-year options” must be exercised prior to the start of the player’s fourth season and are only available for first-round picks.

Other factors that can affect the length of an NFL contract include the Collective Bargaining Agreement (CBA), which stipulates how long rookies can be under contract, and a team’s salary cap situation. In general, teams try to sign their best players to long-term contracts to keep them from hitting the open market where they could command a higher salary.

Signing Bonus

The biggest money in an NFL rookie’s contract is the signing bonus, which is paid out upfront as a lump sum. In recent years, the average signing bonus for a first-round pick has been about $11 million. For a second-rounder, it’s around $4.5 million; for a third, it’s about $2.7 million; and for later-round picks, signing bonuses typically range from $700,000 to $1 million.

In addition to the signing bonus, NFL rookies receive money in four other ways: base salary, per-game roster bonuses, incentive bonuses and workout bonuses.

Base Salary

The base salary is the yearly salary that an NFL player is paid. This is the only guaranteed money in an NFL player’s contract, meaning that if a player is cut or traded, he will still receive the base salary for that year. The base salary is generally paid out over 17 weeks, but may be paid out over a shorter or longer period of time. In some cases, a signing bonus may be included in the base salary.

Salary Cap

The Salary Cap is the amount of money that each team can spend on their players’ salaries for the upcoming season. It is calculated as a percentage of the league’s total revenues, and it is divided equally among all 32 teams. In 2018, the salary cap was set at $177.2 million per team.

The NFL Rookie Salary Cap is a separate salary cap that applies only to first-year players. It is set at a lower amount than the regular salary cap, and it increases gradually over the course of a player’s first four years in the league. In 2018, the rookie salary cap was set at $262,700 per team.

Types of NFL Rookie Contracts

NFL rookies can sign one of two types of contracts: the standard contract or the slotted contract. The standard contract is a four-year deal with team options for a fifth and sixth year. The base salaries are lower in the standard contract, but the player can earn more money through incentives. The slotted contract is the more popular of the two types of contracts. It is a four-year deal with a set salary for each year of the contract. The base salaries are higher in the slotted contract, but the player cannot earn any more money through incentives.

Standard Player Contract

A Standard Player Contract (SPC) is the most common type of NFL player contract. It is a four-year agreement between a player and team, with team options for two additional seasons. An SPC can be worth up to $9 million for first-round draft picks, and the average length of an SPC is about three years.

SPCs are not guaranteed, meaning that a team can release a player at any time without having to pay the remainder of his contract. However, teams often release players before their contracts are up in order to avoid paying signing bonuses and other money that is due if the player stays on the roster until the end of his contract.

NFL teams also have the option of signing players to one-year contracts, which are typically used for players who are signed as free agents or who have been released by another team. One-year contracts are not guaranteed, but they do give players the opportunity to earn more money if they perform well during the season.

First-Round Draft Pick Contract

As the NFL’s collective bargaining agreement gets more complex, it can be hard to keep track of how much rookies make these days. In addition, the CBA stipulates that rookies’ contracts are not to exceed four years in length. So while first-round draft picks used to sign six- and seven-year deals, they now sign four-year contracts with team options for a fifth season.

The average length of a first-round pick’s contract has also increased in recent years. In 2012, the average length of a first-round pick’s contract was 4.58 years. By 2015, that number had jumped to 4.84 years. In 2016, it rose again to 4.94 years. And in 2017, it climbed to 5.01 years.

The total value of first-round contracts has also seen a significant increase in recent years. In 2012, the total value of all first-round contracts was $1.56 billion. By 2015, that number had jumped to $2.48 billion. In 2016, it rose again to $2.67 billion. And in 2017, it climbed to $3.29 billion

Fourth-Round or Undrafted Free Agent Contract

If you are a player who was drafted in the fourth round or later, or went undrafted, you will likely sign a three-year contract with your team. However, your first-year salary will be lower than that of a first- or second-round pick. In 2019, the league minimum salary for rookies was $495,000, but most fourth-round picks will make more than that. For example, linebacker Ben Burr-Kirven signed a four-year deal with the Seattle Seahawks worth $3 million after being selected in the fifth round of the 2019 NFL Draft.

Conclusion

Now that you know how NFL rookie contracts work, you may be wondering how much these players actually make. The answer, unfortunately, is not as simple as it may seem. While the NFL does have a salary cap in place, there are a number of different factors that can impact a player’s salary, such as the size of the signing bonus, performance-based bonuses, and whether or not the player is drafted in the first round.