The conclusion of the 2013 regular season introduced a new dynamic to the NFL. For the first time, teams have to decide whether to exercise the fifth-year option for players drafted three years ago in round one.
The rookie wage scale, adopted in 2011, requires all draft picks to sign four-year contracts. For first-round picks, a fifth-year option can be applied by the team.
The window for exercising the option opens after the player’s third regular season ends, and it continues through May 3. As one league source recently explained it, teams would be foolish to exercise the option before May 3.
They’d be foolish to do it because the amount of the fifth-year salary becomes immediately guaranteed for injury once the option is exercised. Thus, if a team exercises the option now and the player suffers a serious injury during any postseason games or offseason workouts before May 3, the team would be on the hook for the money in the event the injury ends the player’s career or keeps him out of action for two seasons.
For players taken in the top 10, the fifth-year option equals the transition tender for the player’s position in the fourth year of his contract. (The transition tender is based on the average of the 10 highest-paid players at the position.) For players taken from No. 11 through No. 32, the option arises from the average of the 25 highest-paid players at the position, with the top three excluded.
Absent new contracts before May 3, the option will be applied to players like Panthers quarterback Cam Newton, Bills defensive tackle Marcell Dareus, perhaps (No.2), Broncos linebacker Von Miller (No. 3), Bengals receiver A.J. Green (No. 4), Cardinals cornerback Patrick Peterson (No. 5), Falcons receiver Julio Jones (No. 7), and Cowboys tackle Tyron Smith (No. 9).
We’ll be hearing plenty about the fifth-year option in the coming weeks. But if any team opts to apply the option before May 3, they’re taking an avoidable risk that they’ll eventually pay the money and get nothing in return.