The Case For A True Rookie Wage Scale

With the NFL’s owners gathered in Ft. Lauderdale for another round of meetings, not much has happened since the last time the guys who write the checks got together in late March.
But there was one specific development that likely has gotten their attention.
One of the league’s 32 owners has committed to paying a player who never has worn an NFL helmet a series of checks totaling at least $41.7 million, regardless of whether said player ever does anything to justify all or any portion of his payday.
And so the current sessions are expected to feature discussion regarding the question of whether a true rookie wage scale should be implemented.
We’ve talked about the issue many times over the years, and we decided to address in comprehensive fashion the arguments for and against revising the current system to limit the money paid to unproven rookies at the top of the draft.
Part one focuses on the arguments for implementing a true rookie wage scale.
Keep in mind that a change would apply only to the top of the draft; beyond the first eight picks, the league has no real issue with the system.  By the time rounds two through seven commence, the current approach greatly favors the teams.  Players are signed to three-year or four-year commitments for annual minimum salaries and slotted signing bonuses.  As to the star players that emerge from this much larger and deeper end of the draft pool (e.g., Maurice Jones-Drew, Marion Barber, Brandon Jacobs, Darren Sproles), the teams get a high level of performance at bargain-basement prices.
So here are the arguments favoring change for the players who end up earning millions, without ever having to actually earn them.
1.  The Wages At The Top Of The Draft Are Growing At Disproportionate Rate.
The most obvious proof that a problem exists flows from the simple fact that the contracts paid to the players taken at the top of the draft have grown dramatically over the years.
In 2003, quarterback Carson Palmer received a six-year contract with guaranteed money of $10 million.
In 2009, quaterback Matt Stafford received a six-year deal with guaranteed money of $41.7 million.
During that same stretch, the salary cap has grown from $75 million to $128 million.
So, basically, the salary cap has increased by 77 percent in six years, and the guaranteed money for the first overall pick in the draft has grown expontentially, by 417 percent.
Clearly, something is wrong.
2.  The Current System Unfairly Penalizes The Worst Teams From The Prior Season.
The disproportionate growth in the value of the contracts paid out at the top of the draft have made it even harder for the bad teams to improve their situations.
The intent of the draft order is simple.  The worst team from the prior year picks first, the second-worst team picks second, and so on.
But with so much guaranteed cash now tied to that first overall pick, the consequences of getting a guy whose talents don’t translate to the next level can be dire.
As Commissioner Roger Goodell said during an NFL Network appearance on the first day of the 2009 draft, the system is “not only having financial ramifications to clubs, it’s having competitive ramifications.”
The mere fact that the Chiefs couldn’t unload the third overall pick in the draft to the Lions for the 20th overall selection and a high second-round pick demonstrates that these top-ten picks no longer possess the value they once did.  Under the draft trade chart created roughly 20 years ago to facilitate trades, the Lions should have pounced on the offer — they were getting extra value equivalent to at least the 23rd overall selection in the draft.
This confirms that too much money is now invested in players whose success and failure in the NFL mimics the outcome of the process for determining who’ll receive the kickoff to open a game.  And so it’s no longer a good thing for a bad team to have a top-ten pick.  Instead, it’s the kind of risk that keeps guys awake at night worrying about screwing up their selection, when they otherwise should be awake at night worrying about the bad season their team just completed.
3.  The Current System Creates Players Who Can’t Be Led.
One of the common complaints regarding the lottery-prize approach to drafting rookies is that the money paid to them often creates monsters.
Young players now find themselves emboldened by their millions.  And for good reason.  With so much money guaranteed to be paid to the players over the lives of the contracts, nothing they say or do will get them fired in the short term.
As a result, some of these players realize that they need not respond to coaching, and that they need not heed the leadership of veteran players.
These young multi-multi-millionaires essentially run the place, and there’s nothing anyone can do to fix the situation, lest the franchise admit that it was too stupid to realize that the player shouldn’t have been drafted in the first place.
4.  The Current System Takes Money Away From Proven Players.
Every dollar paid to an unproven rookie is a dollar that won’t be available to be paid to players who have shown that they can perform at the NFL level.
And the more dollars paid to a player who has never earned a penny playing pro football is a slap in the face to the men who has given their all for peanuts in comparison.
As Vikings defensive end Jared Allen told the Minneapolis Star Tribune after the Lions gave that huge contract with $41.7 million guaranteed to quarterback Matthew Stafford, “It’s outrageous, absolutely outrageous.  The guy’s never taken a snap.  I’m happy for him, but we got guys in this league that have played 10, 12 years that earn their wages every day and they don’t see that kind of money.”
A year ago, when the Falcons paid quarterback Matt Ryan a deal worth $72 million over six years, one veteran player called the situation “a little disheartening.”
That player, Kevin Mawae, also is the president of the NFL Players Association.  Though he later tried to soften his stance, presumably after getting a lesson in the concept of leverage, the damage was done.
5.  Agents Are Preventing The Union From Insisting On A Rookie Wage Scale.
The NFL Players Association consists only of players already in the league.  Before they’re drafted, rookies are not members of the union.
And since only a handful of the next crop of rookies will benefit from the current system, any vote conducted by the current members of the union surely would result in a decision to redistribute the money to those who already have been in the league.
So why won’t the union simply put the matter to a vote of the union?  Because a handful of agents who routinely represent the guys picked at the top of the draft don’t want to lose their three-percent cut of those giant contracts.
The basic reality here is that the agents that routinely land the top players don’t want to give up the ongoing stream of revenue that flows annually from the high-end rookie deals.  And so these agents traditionally have exercised significant influence over the union’s resistance to changing the system.
6. Agents Are Taking Unfair Advantage Of The Players’ Leverage.
The contracts have escalated so dramatically at the top of round one in large part because agents realize that they and their clients possess all the leverage.
The last thing a bad team needs after a bad season is a protracted training-camp holdout and, ultimately, the absence of any meaningful contribution from their first-round rookie in his first NFL season.
And so many teams cave to the pressure, overpaying the player in order to ensure that they’ll be able to begin the process of justifying the pick.
Indeed, even when a team tries to take advantage of the leverage that comes from possibly not making a given player the first overall pick, the team still ends up paying too much — just as the Lions did in their pre-draft deal for Stafford.
7.  The Union Knows That Change Is In The Best Interests Of The Game.
Perhaps the best argument in support of changing the current system is that the players’ union knows that such a change is needed, and that it supports the long-term best interests of the game.
But the union has opted to resist change not because the union thinks that the system work.  The union has resisted change because the union wants to include the issue in the push-and-pull that is collective bargaining.
So if the union gives up on the issue of a rookie wage scale, the union will get something it wants in return.
It’s an approach that is as transparent as it is short-sighted.  On some issues, the two sides need to come together and fix a problem as partners, not as adversaries.  On this particular issue, the union’s refusal to recognize that change is needed, all in the name of squeezing some other concession out of the league, fails to serve the interests of the players — and undermines the greater good for which everyone connected to the process should be aiming.
Coming tomorrow, the arguments against change.  For now, feel free to sound off in the comments.

28 responses to “The Case For A True Rookie Wage Scale

  1. There are no arguments against change, Florio. This is the singular issue that will make or break a new CBAs now, and in the future. While I think its important to pay high draft picks better than those drafted after the first few, the ROIC is far too disproportionate from that for a proven player.

  2. Preach it! This article is dead on, and I can’t see how anyone with any common sense wouldn’t vote for a rookie cap in a heartbeat after reading it.
    Notice I omitted agents, because they have no common sesne.

  3. Totally agreed. There is absolutely no reason not to have a rookie scale soon.

  4. Well said. The purpose of collective bargaining is that the union is supposed to represent the collective interests of its membership; however it is all too common (and a big part of why unions get bad names) that unions will stick irrationally on points just because they have power to influence them, not because the membership has interest in them. So, they get the reputation of being pests that just screw with the employment relationship and make things worse for everybody.
    We all know, of course that this perception is based only on a few examples such as this one. In general unions do represent the interests of their members and across the board lead to improved wages and conditions for employees. Sorry for the pinko-Commie rant.
    Can’t wait to see tomorrow’s arguments against a new pay scale.
    (I know that comments here [this is my first] are supposed to include a joke, so here: I am genuinely interested in reading your weird time-travel book. HA! What a knee slapper.)

  5. All rookies are not created equal. Rookies should be able to negotiate for the best deal they can get, with no cap. The teams just need to have more discipline. If Stafford isn’t worth $41.7 million, don’t pay it to him. There’s no need for a cap.

  6. If the union allows a rookie wage scale, then they should also have the salary floor increased to ensure that the money the owners save on the draft actually ends up in the players pockets.

  7. ipaq says:
    So… If the cap minimum was raised ( 107m- to say 115m in 09) and the rookies were only given 2 yr contracts (guaranteed) with free agency for those players after two yrs. I think you might have fixed the problem for both owners and players.
    The players that have been in the league would get more and the rookies after proving themselves would be free after 2 yrs. The owners would not be spending large $s on unproven players, but still would have to spend money to keep players
    That is called a win -win.
    This would compund the problem. I agree with you that ownership may well just pocket a portion of the savings, but with most draftees taking 3 or 4 years to become solid players 2 year deals followed by free agency penalizes teams that pick wisely.
    4 to 6 year rookie deals give a team enough time to learn what they have and then work out a new contract with the player. There could be standard performance clauses developed for initial deals that can pay a guy fairly for above average performance during that period.

  8. bc says:
    May 19th, 2009 at 1:56 pm
    All rookies are not created equal. Rookies should be able to negotiate for the best deal they can get, with no cap. The teams just need to have more discipline. If Stafford isn’t worth $41.7 million, don’t pay it to him. There’s no need for a cap.
    Is that you Ryan Leaf?

  9. I agree with the cap. Great article (as usual)
    I am curious what the arguments for not changing are? Baseball is better or some crap?

  10. ipaq,
    The current salary cap minimum ensures that the outrageous money paid to top 10 picks will go to veterans. How would it not? Same salary floor, less to rookies = more to veterans.
    We all agree, this is the way it should be.
    Florio is correct; the union knows a rookie, NBA-style cap is necessary and but is wrong in thinking that denying this fact is creating themselves some leverage in CBA talks.

  11. Excellent article. I agree with every word, especially that last paragraph, “On this particular issue, the union’s refusal to recognize that change is needed, all in the name of squeezing some other concession out of the league, fails to serve the interests of the players ” . As a former union Cheif Shop Steward, I know the value of “knowing when to hold ’em and knowing when to fold ’em”, as it pertains to the overall welfare of those you represent as well as those that employ you and those you represent. Sometimes you just have to prioritize.

  12. Well put. I’m interested in hearing part two tomorrow.
    Question; what will are some Rookie Pay Scale options? What will the plan look like. Can you line this up in dollars and cents? Make this part 3 on Thursday, K? Thanks!

  13. bc:
    Your post is naive, its just not that simple. Nobody is saying rookies are equal, thats why its a sliding scale. The higher the draft spot the more $ they get.
    Teams can’t just be more disciplined. If team A takes a stand but then teams B, C and D don’t, then team A is lambasted in the media for being cheap and caring about money over winning.
    Only way for this to work is to have a set scale w/ minimal wiggle room due to players’ position on the field.
    Ipaq: can’t let the rookies go after just 2 yrs, too many players need more time to develop. Why spend a high pick on a QB or WR, pay him big $ for minimal playing time and have little leverage to keep him once he becomes an asset. Doesn’t make sense from an ROI standpoint. High picking teams would avoid those positions on draft day and then just get the guy in free agency after someone else has taken the draft risk and paid the guy for some on the job training.

  14. The bigger problem may come in the terms of the rookie wage scale. It would never work to let rookies be free agents after two years. Think about drafting a QB. It’s a coin flip anyways and he probably won’t be good til year two or three even if he does turn out. Why draft that guy knowing even if he turns out to be more joe Flacco than Jamarcus Russell, he’ll be a FA by the time he’s good. WRs usually catch on by year three. Do you want to draft a WR, pay him to learn hot to play the game and then lose him once he’ll be ready to contribute? Player development would be unhinged. Players would be switching teams so much, they wouldn’t be as good, and draft picks would be increasingly worthless, since you could constantly just grab the draft picks that produced as Free Agents. Also, how do you plan for positions? look at Stafford vs. jake Long- huge discrepancy. It’s easier for the NBA to slot a wage to the pick but the NFL pays positions differently. How will those things be accounted for? I’m in favor of a rookie way scale. It makes too much sense to not use it, but it could be tougher than a simple yes or no vote.

  15. Well With a Rookie salery cap enabled a few things would happen.
    The Veterans of the NFL would get their Payday. A Guarenteed 2 year contract with high pay would only be effective for round 1, maybe round 2 players. If it was for all rounds, most people taken in round 2+ are considered either project players, or players that didn’t have good combines. so they wouldn’t recieve much playing time other than maybe special teams. If you are taken in the first round, you are expected to play either that year, or by the next. I like what my team, the bears did, and gave up our first this year, and first next year, and signed a True Veteran qb that will become our franchise qb in cutler.

  16. Part of the players’ current leverage is that if they don’t sign a contract for a year, the rights of the drafting team expire and the player becomes a free agent. If that period was extended to five years or just made permanent, would that give the teams enough leverage to have a lower percentage of guaranteed money (more performance based)?

  17. The real problem here is the agents have to much power. If the owners want to pocket more profits rather then pay it out to players that’s their prerogative as they paid the hundreds of millions to own the business. If They do so then the players don’t have to sign for that team and if the team plays poorly then the fans will not attend. This is called free market capitalism and is the basis of our economy. There is way to much class envy in this country with the rich entrepreneurs being reviled because they have been successful. With or without a rookie cap something needs to be done to curb escalating salaries and the same for ticket prices.

  18. I’m not naive, I just don’t have the time to write a fully fleshed out essay as Florio promises tomorrow. I disagree with the NBA system. If Lebron is the first pick one year and gets X million dollars, it’s ridiculous that the following year, Andrew Bogut will get (X + 5%), just because he happens to be the first pick.
    Let’s say, hypothetically, rather than having a draft, all draft eligible players were simply free agents. What would they be worth? How much would Stafford get in that scenario? I’m guessing it would be much less than $41.7. There’s no reason to pay him more than what Kurt Warner got (and if some team thinks that there is a reason to pay him more, than he should be able to get it). The draft system should do its best to approximate the value that players would get in a free agency situation, but the worst teams should have their first choice of player.
    As for teams being labelled as cheap… WHO CARES? The stingiest teams in the league are the Eagles and the Patriots. They routinely refuse to overpay for players. And guess what? They win. And players are willing to take less money to play for them.
    If paying Stafford $41.7 million is a bad investment for the Lions, they shouldn’t have done it. They should have taken Curry, or some other player that represented a better value. If paying Stafford $41.7 is a good investment, then there’s nothing wrong with the system.

  19. The average player in the NFL only plays 3.2 years. That is why you have to move free agency up if you are going to have a true rookie scale.
    The guys that prove themselves will get payed with long term contract. The guys that have not… well re sign them to a contract that makes sense. Maybe you throw in some free agent restrictions on the 2 yr free agency, but you have to understand that the teams can always re-sign guys to longer contracts after year one.
    As far as the minimum, the owners are not spending to the cap now. With out raising the minimum you allow many owners to spend less on overall salary. They will not pass on the savings to the vets., they will spend less overall and more teams will have 20m + in cap room.
    The players don’t trust the owners to do anything but put more in their own pocket.

  20. Also remember that a rookie wage scale is good for the owners.
    The players will want something in return. Maybe it’s free agency for all after 3 years.
    Give & take.
    I would like to see free agency sooner so the guy picked in the fifth round that makes little and goes to the Pro Bowl, gets paid what he is worth.

  21. I have heard the late Jim Finks (Saints GM) pontificate on agents (20 years ago) I’m paraphrasing…….”Unless your a 1st or 2nd round draft pick, your slotted….there is nothing you can do by paying an agent 4% of your money, that you couldn’t do, by doing some research and saving the 4% and keeping it in your own pocket.” The more things change, the more they stay the same.

  22. When I joined Bally’s Health Club 20 years ago, I paid more $ upfront to get a monthly fee of $5. I was told there might be a 10% annual increase Bally’s can impose to meet operating expenses. 50 cents more a month, who cares? Well, my monthly is now close to $30.
    This is the phenomenon of compounded interest & why the upper first round picks are so disproportionately high and will only get worse. Similiar to when everyone in the company gets a 3% COL raise. The CEO gets an extra $15K and the guy in the mailroom gets an extra $800

  23. The NFL needs not only a rookie cap like the NBA but I better Minor League system like Major League Baseball. Just think how the matt cassels of the league would be way more common and teams could build huge depth to ensure that a season couldn’t entirely be lost. They could also have somethinglike the rule 5 draft where you could draft someone not on say the 53 man roster on another team but you would have to keep that player on your 53 man roster all season. This way teams would be able to stock pile players to an over done extent.

  24. My buddy’s response to my post…he addresses some further good points for you, Florio. I really think you need to drop this crusade and focus on making sure Vick gets banned from the NFL.
    @Stone (from Walsh)
    Interesting rebuttal. The rookie salary cap is one of those ideas that sounds really nice on paper, or in theory, based upon emotional points that bear little resemblance to the real world. Kind of like “universal health care”. When you see how it would work in practice and who benefits, it doesn’t hold up to scrutiny. I’ve been torn on this issue simply because I hate that rookies get that much money before they have produced a damn thing. However, I don’t see much difference between draft picks and stock picks. If people believe Berkshire stock (Buffet’s company) has a high probability of big returns, they’ll pay a huge price for it, period. If they want to go for value and a hopefully modest return, they’ll buy shitty Chrysler stock. Smart managers make good decisions.
    This underscores what I think is your strongest argument. Florio sets up a straw man with the example of Detroit. He could have highlighted JaMarcus Russell as an example of players holding the team hostage, but look at both teams- the shittiest management/ ownership in the league in two economically depressed locales. I don’t see teams like IND, NYG, NE, PIT, SEA having these types of problems. Hells bells, NE traded down for 4 second rounders this draft, no doubt due to the fact that a huge percentage of NFL starting rosters are 2nd rounders that you can pay less for.
    DET should not have picked Stafford. They should have picked Curry or one of the tackles. God, they suck. That team should move to the south.

  25. The system for paying rookies isn’t totally out of whack. It just exponentially gets crazier as you go to the #1 draft pick. I’d say anything outside of pick #15 is probably fine. You get what you pay for essentially. From pick #5 to #15 it is probably a little high but not totally absurd. But my goodness the top 5 picks are a curse. You pay them like proven veterans and best case scenario is you get a player just worth the money.
    Unless you want a franchise QB or Tackle, the top 5 picks are better for trading down. Overspend that money on a veteran. I think the best place to draft is in the 10 to 20 range. You still get an elite player, possibly even the best player at a certain position in the whole draft, and you don’t pay an arm and a leg for them.
    And really the 20 to 30 range isn’t too bad either. You are essentially getting second or third pick at a certain position but that player could easily outperform guys that looked slightly better than him coming out of college.
    Draft picks are supposed to be about getting great value. Adrian Peterson was selected 7th and is still under rookie contract making about $3 million this season. That is awesome value. You get a few guys like that and you can load your team on talent with all the money you save, like the Vikings kind of did with a guy like Jared Allen, who makes like $9 mil this year.
    But if you are paying draft picks $7 mil plus per year when they aren’t even proven it defeats the purpose. The Lions should have traded down! But they wanted that QB real bad…

  26. Hey Mike, whatever happened to you case against the rookie wage scale??

  27. I am all for a rookie wage cap. I hate to see all these rookies making crazy money and then doing nothing to earn it. I do not think it should hurt the rookies that bust their rear ends to become better player though. I think all rookie contracts should be reasonable base salaries and heavy with.incentive based clauses. Give them a little money to give them a taste of what its like to have it, and then make them work their butt off to continue to live that life of luxury. That would ensure that the players that work extremely hard to be great, even when they are rookies, still have an opportunity to hit the jackpot. It would be wrong to pay a guy like Adrian Peterson peanuts, when he clearly has done more for Minnesota than any veteran player has in quite some time. Just as an example. As for the agents, don’t they represent the active players as well? If the money is shifted from rookies to veterans, they still get it, just from a different contract. The even better part about that is that it would give the leverage back to the veteran players…..who now know a little more about agents and how they operate. They could demand better performance and treatment from them as opposed to rookies who are consistently manipulated and exploited by these parasites. I think it tips the balance of power closer to actually balanced, on all fronts.

Leave a Reply

You must be logged in to leave a comment. Not a member? Register now!

This site uses Akismet to reduce spam. Learn how your comment data is processed.