What Is A Fifth Year Option In The NFL?

In the NFL, a fifth year option is a clause that can be included in a player’s contract that extends their contract an additional year.

What is a fifth-year option?

In the NFL, a fifth-year option is a clause that can be included in the first contract of first-round draft picks. The option gives the team an additional year of control over the player at a salary that is predetermined by the collective bargaining agreement.

The option must be exercised within the first four years of the player’s career, and it takes effect at the start of the fifth season. If the option is not exercised, the player becomes a free agent after his fourth season.

The fifth-year option salary is calculated as follows:

For players drafted in 2012, 2013 and 2014, the salary is equal to the average of the third- through 25th-highest salaries at their position for the fourth year of their contract (the option year).

For players drafted in 2015, 2016 and 2017, the salary is equal to the average of the third- through 25th-highest salaries at their position for the fifth year of their contract (the option year).

How does it work?

The fifth year option allows NFL teams to extend a player’s contract for an additional season. The option must be exercised prior to the player’s fourth NFL season, and is only available for first-round draft picks. If the option is exercised, the player’s salary for the fifth season is guaranteed. For top-10 picks, the salary is equal to the average of the 10 highest-paid players at their position; for picks 11-32, it is equal to the average of the third through 25th highest-paid players at their position.

What are the benefits of having a fifth-year option?

The fifth-year option allows teams to extend a player’s contract for an additional year beyond the standard four-year deal. The fifth-year option must be exercised prior to the expiration of the player’s fourth year of his rookie contract. If exercised, the fifth-year option will pay the player an amount equal to the average of the non-exclusive franchise tags at his position.

Who is eligible for a fifth-year option?

Only first-round draft picks are eligible for the fifth-year option. The option must be exercised between the end of the player’s third NFL season and the beginning of the fourth season. The fifth year is guaranteed only for injury and is not guaranteed against skill or cap.

When a team exercising a fifth-year option, they are essentially betting on two things: that the player will still be on their roster by the start of the fourth season, and that the player will be good enough to warrant a raise. If either of those things does not happen, then the team is on the hook for the difference between what they would have paid the player in salary under their rookie contract and what they would have to pay them if they were to exercise the option.

What is the downside of having a fifth-year option?

The fifth-year option is a tool that NFL teams can use to extend the contracts of first-round draft picks. The option is exercised automatically for first-round picks, and it gives the team an extra year to control the player’s rights.

The downside of having a fifth-year option is that it can be very expensive. If the player performs well, they will likely be due for a big pay raise after their fourth season. If the team exercises the fifth-year option, they will have to pay the player’s salary for that season at an inflated rate.

How do teams exercise fifth-year options?

The fifth-year option is a team-held option for a player’s services that can be exercised the spring after the player’s fourth season in the NFL. The option entitles the team to an additional year of the player’s services at a predetermined, salary-cap-friendly rate. The NFL Collective Bargaining Agreement states that for first-round picks, the option year salary is equal to the transition tag amount for that position; for second-round picks, it is equal to 110 percent of the player’s salary in his fourth season; and for third- through seventh-round picks, it is equal to 125 percent of the player’s salary in his fourth season.

The team must exercise the fifth-year option before the start of the League Year in which it would take effect. For example, a team must exercise a fifth-year option for a player drafted in May 2014 (such as Khalil Mack or Odell Beckham Jr.) by early March 2019. If a team does not exercise its fifth-year option on a particular player, that player then becomes an Unrestricted Free Agent following completion of his fourth contract year.

What are some recent examples of fifth-year options being exercised?

The fifth-year option is a valuable tool for NFL teams when it comes to managing the salary cap and retaining young talent. It allows teams to keep key players under contract for an additional year at a relatively affordable price, while also giving the team some flexibility in terms of when they can extend the player’s contract.

The fifth-year option must be exercised by the team on or before the last day of the NFL calendar year in which the player’s fourth year of his rookie contract expires. For example, if a player is drafted in 2016, the fifth-year option must be exercised by December 31, 2020.

There have been a number of high-profile examples of fifth-year options being exercised in recent years. Some notable examples include:

Jared Goff (QB), Los Angeles Rams: The Rams exercised Goff’s fifth-year option in April 2020, keeping him under contract through the 2021 season.

Ezekiel Elliott (RB), Dallas Cowboys: The Cowboys exercised Elliott’s fifth-year option in May 2019, keeping him under contract through the 2020 season.

What happens if a team does not exercise a fifth-year option?

If a team does not exercise a fifth-year option, the player becomes an unrestricted free agent at the end of his fourth season.