By Paul Wanecski and Mario Granata
The NFL is all about value. Sometimes value is in a player. Sometimes value is in an opportunity to bring in a young, unproven commodity via the draft. Many things go into the business end of structuring an NFL roster, none more important than the dollar it takes to sign, keep or acquire new talent and the NFL draft is the most alluring way to rebuild a roster.
Players drafted in the NFL come with a base four year contract. The contracts that are offered to players have a slotted value, which is based partially off a Rookie Salary Cap Pool. Since the salary cap is based off the top 51 players contracts on the roster, it is typical that rookies drafted prior to the 3rd round will count against their team’s salary cap, while a player drafted in the 7th round will likely be making league minimum and may not make enough money to count against the top 51 contracts.
Understand the Selection
Drafting the best player available isn’t good enough for most teams. Jostling for draft position is among the most entertaining facets of the draft. Teams look to move up or down in an attempt to get the perfect player at the right price. Selecting a player isn’t just about how much they will cost or who they are; draft selection can also determine if a future contract option can be available. Players drafted in the first round (this is normally within the first 32 selections, however this year the New England Patriots are forfeiting their first round selection, so only 31 picks are available) come with a team-option for a fifth year. That option must be exercised prior the start of the player’s 4th year and will have a value based on when the player was drafted.
What is this Fifth-Year Option All About?
The First Round is divided into two segments:
-Top 10 selections
-Rest of first round selections 11-31
Top 10 Picks - Top 10 Selections are given a 4 year contract with a 5th year team option, which teams must exercise before that start of the players 4th year. This option allows the team to extend the contract of a player one additional year without the need to transition or franchise tag him. If that option is picked up, the player is paid the average of the top 10 players at his position.
For example, a player like Ryan Tannehill, who was selected 8th in the 2012 draft, IF the Dolphins were to pick up his 5th year option (he did sign a contract extension last season, so this is purely an example) from a financial standpoint, Tannehill would be paid the average of the Top 10 players at his position, or approx. 16 million dollars.
Picks 11-31 - The remaining players selected in the first round have a similar option. The exception is that the 5th year team option pays significantly less. The option year pays them the average salary of the 3rd-25th highest-paid players at their respective positions.
For example, EJ Manuel, who was drafted 16th in the 2013 draft, IF the Bills were to pick up his 5th year option, and not resign or restructure his deal, it would have to happen before the 2016 season (the 4th of his contract). More importantly, from a financial standpoint, Manuel would be paid the average of the 3rd-25th highest-paid players at his position, or approximately 12.5 million dollars.
Why is this important? Well, you will see a lot of jostling at the bottom part of the 1st round as teams try and navigate for that extra year of control. For a position like Quarterback, an affordable year financially in an option may be worth the cost to trade up if that player turns into a Franchise Quarterback (see Russell Wilson, as he is given the base 4 year contract as he was selected in the 3rd round and Seattle had no team option to exercise versus Ryan Tannehill who would be paid the average of the top 10 Quarterbacks in the league).
(Contract estimates provided by Overthecap.com):
If you are looking for the full contract estimates for the 2016 NFL Draft, use this link to view what overthecap.com has to offer on that.