Other than signing bonuses, NFL contracts aren’t guaranteed. Ownership expects complete loyalty from players that sign contracts, although they don’t express the same attitude toward their stars. Because ownership has such great leverage on rookie players, they will get them into long-term deals that the player may eventually outperform. These long-term deals lead to disputes between the players and management.
The hardest league to evaluate talent is in the NFL. Face it; no one knows who’s going to truly pan out. Ryan Leaf, JaMarcus Russell, and Reggie Bush have all performed below expectations. Yet, players like Tom Brady and Drew Brees find themselves amongst the league’s elite.
Should the NFL require shorter contracts for rookies, or base pay through incentives?
3 Year Maximum Contract
As a late first round selection in the 2008 NFL Draft, Chris Johnson signed a five year contract worth $12 million. After two successful seasons, he is arguably the NFL’s best running back. His reward? $550,000 in 2010, until his recent restructure that still has Johnson significantly underpaid.
A substantial amount of money in most professions, but that’s less than what many third-down running backs make. Is the best running back in the NFL going to be unfairly compensated for the next three seasons because of the leverage that NFL rookies don’t have (outside top-ten draft picks) when negotiating their first contract? In a sport that jeopardizes career longevity, a player has the right to look for his payday immediately.
NFL rookie contracts should be limited to three years. Players will be given a performance review from management after their second season. This will help to prevent scenarios where rookies and management accept and offer extensive contracts that they’ll want to restructure within the first couple of seasons. Furthermore, long-term negotiations will be prohibited during the rookie’s first two years in the NFL.
Chris Johnson is an example of a player who signed an extensive deal where management can cut him at any time without compensation. On the other hand, JaMarcus Russell made almost $39 million after producing seven wins throughout three NFL seasons.
Former #1 pick JaMarcus Russell made nearly $40 million over three seasons, while one of the league’s best players is expected to make $12 million over 5 years. Going into this season, Russell is owed $3 million, although he was released in May. Coming off a historic season, Chris Johnson is slated to make $550,000. This is all because Russell was selected #1 overall in the NFL Draft while Johnson was selected 24th.
The average NFL career is short, so players can’t afford to play five years while playing for a fraction of what lesser players play for. A running back who entered the league at 24 would already be closing in on his downside at age 29, especially if he’s a physical runner.
Assigning yearly salaries to players based on their collegiate performance is unreliable. Some top draft choices turn out to be duds, and other 6th round selections turn into superstars. Along with a potential signing bonus, all rookies will have a set salary heading into their first season. A second year player’s salary will be determined through incentive-based contracts. Their rookie season performance will determine what they will make for the second season.
Incentive-based contracts and a contract maximum of three years would help to eliminate excessive contracts given out by owners and give players more leverage to negotiate their earnings earlier in their career.
From the start of their third off-season until training camp, players and management will be allowed to have long-term negotiations. If they can’t settle on a long-term deal, then the two parties will need to discuss a one-year deal. Similar to the MLB, the NFL organization will have rights to the player for that third season, but each party needs to represent a salary figure that they believe is fair for that season. If the two sides can’t agree, it’ll go into arbitration where an arbiter will decide upon each side’s plea.
Although the MLB requires six years of service from MLB players before they leave their team for free agency, the MLB uses arbitration for players who are entering their third year of MLB service or Super 2’s. This prevents teams from severely underpaying their best players for six years of their career.
Players love arbitration. Because of external factors that can hinder an organization if they don’t meet the player’s demands, they normally will accept the player’s demands or find a meeting point that leans toward the player’s wishes. Out of over 200 players who were eligible for MLB arbitration last winter, less than 20% of them settled their cases through an arbiter.
Since the average NFL career is shortened from brutality, I’d suggest making it 2 years before a potential arbitration hearing for a third year. After three professional seasons, players will be allowed to venture into free agency if they can’t agree on a long-term deal with their organization.
After three professional seasons, general managers will have a scope of work to evaluate talent outside of their collegiate accolades, which are deceiving.
The signing bonus is the money that is guaranteed to players, regardless of whether they ever play a down. In 2009, Matthew Stafford received a deal that guaranteed him almost $42 million dollars over six years; he never played a down! This doesn’t include the yearly salary figures or extra incentives of the contract.
Limiting rookie contracts to three years should cut this in half. This rewards players who are drafted highly while not strangling the team’s salary cap for years if the player doesn’t pan out.
Essentially, I believe the NFL should make their contract system similar to the MLB. After a certain amount of NFL service, players should be reviewed for performance.
The hardest league to evaluate talent is football, and high draft picks are often failures that end up sacrificing years of cap space from the teams that draft them. If the players perform past expectations, then their in a situation like Chris Johnson where management will hold them hostage.
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Joshua Huffman, “Does Tennessee Titans Running Back Chris Johnson Prove that the NFL Should Restructure Rookie Contracts?.” Associated Content. July 15, 2010. August 2, 2010.
Jim Caple, “MLB Players Should Love Arbitration.” ESPN. Jan 20, 2010. August 2, 2010.
ESPN News Services, “Former #1 Pick Russell Released.” ESPN. May 7, 2010. August 2, 2010.
Adam Schefter, “Source: Rams to Start Work on Deal.” ESPN. July 15, 2010. August 2, 2010.