With all due respect to the NFL’s desire to implement a “hard” rookie wage scale for all incoming NFL rookies, the arguments favoring such a mechanism designed to artificially restrain and limit the income of rookies are fictional, not based upon the empirical date, is designed only to give the NFL teams “scouting insurance” against poor draft selection decisions and will ultimately seriously adversely affect college football. The reality is that the current NFL draft system in its entirety is a tremendous economic windfall to the NFL teams as it provides a large source of cheap, young labor to the league signed for contracts exceeding four years. The current clamor for a rookie wage scale comes mostly from the fact that the rookie class is not a popular group of people with very few people defending their rights.
The NFL’s argument is comical and ironic when one truly examines it. Management of the NFL desires to artificially limit money to its youngest individuals based not upon the fact not that they could obtain the monetary compensation in an open market system but because they are “un-proven” commodities. The NFL’s stated desire is to pay players who have actually performed in the league. The NFL has said that not only do they want this type of system but the veteran players want it as well. Of course, like my grandfather used to say “our family was against immigrants as soon as we came over.”
In essence what the NFL is advocating for is some type of “scouting insurance” whereby if an NFL team mistakenly drafts JaMarcus Russell instead of a Joe Thomas or Calvin Johnson, they are deserving of a “mulligan” or at least a break in the money paid to the mistakenly drafted player. At the end of the day, the NFL teams spend countless millions of dollars scouting players and the teams that pick the correct players succeed and the ones that don’t fail. This is capitalism in its purest form. What the NFL advocates is purely a socialistic concept. The owners of the NFL are the poster children for capitalism and yet they want protection against their own incompetence and the players who are card carrying members of a union (the NFLPA) want unfettered free capitalism. Basically the positions are juxtaposed from their historic and natural economic positions.
The raw economics of the current rookie system are totally in line with the NFL receiving tremendous bargains for 244 of the 250 drafted players each year. The only perceived misappropriation comes for the top five to six players selected and in the case of the top players if they succeed as they are projected to, the teams are not dissatisfied with the compensation packages and the players should be compensated to perform the same jobs and tasks as other players in the league.
For example the 12th pick in the 2010 draft, running back Ryan Mathews, received a five-year $18.5 million dollar contract or roughly $3.7 million per year. This is a contract equal to the one that Chester Taylor received from the Bears in free agency this year as the 25th-highest paid running back in the NFL. Not a bad deal for the Chargers. An even better deal comes from the 28th selection: starting cornerback Devin McCourty of the Patriots who received a five-year $10 million deal or $2 million per year. This average does not even make McCourty one of the top 60 paid cornerbacks in the NFL and compensates him less than most “nickel” corners even though he was voted to the Pro Bowl in his rookie year. Thus the economics after the top six picks are very favorable to the NFL and its teams and this does not even take into account second rounders who average roughly 1.5 million per year and third rounders at $800,000 per year and on and on who are doing the same job as players making three, four and upwards of 10 times more money.
The reality is that the facts are clear that NFL teams who select the right player are not disappointed with either their selection or the amount of money they are paying the player. For example, the Rams are not unhappy paying Sam Bradford $13 million per year to be their quarterback for the next six years (especially when Tom Brady is at $18 million now and Peyton Manning will invariably exceed this number in the coming months). Similarly the Browns are very happy with their five-year $40 million dollar investment in four time Pro Bowl offensive tackle Joe Thomas (third selection in the 2007 NFL draft) whose $7 million per year is 30 percent less than the top compensated tackles in the league who have fewer Pro Bowls selections over the same period of time and play the same position. Why should a player like Bradford or Thomas who are performing the same tasks as older players not be compensated the same for the same job done?
I can see imposing a “guaranteed money” cap on the top picks to give the NFL some sort of scouting insurance or JaMarcus Russell protection in order to assist the teams in avoiding dumping huge sums of money into complete flops. If a player crashes and burns in the top five then the guaranteed money over the first three years equates to roughly 50 percent of the 2010 guaranteed money provided that the player becomes an unrestricted and unfettered free agent after his third year. However, a hard cap restriction on wages is not required or necessary. The “JaMarcus guarantee cap” would look something like this using the Sam Bradford contract as an example. Where Bradford received $50 million in guaranteed money over the contract and $51 million over the first four years of the deal; the new guaranteed cap would require a statistical component differing for each position designed to create a fair and suitable level of playtime and performance above the “bust line.” If the player does not perform to this minimum level then the team can get out of the contract for an agreed upon guaranteed payment over the first three years, i.e. $20 million for instance. Then the player would be a free agent again and the team controls their ultimate downside. However, if the player is a “player” or even better a superstar like Bradford and Thomas referenced above then they should be compensated accordingly and at or near the level of the veteran players who play the same position.
The other reality and net effect of a hard rookie cap as proposed by the NFL will be to ruin college football as we know it today and drive an irreparable wedge between the colleges and the NFL. Under the NFL plan, rookies would receive at a maximum $15 million contract for five years or roughly $3 million per year for the top pick and then decrease proportionally by pick down the draft. The net effect will be to then reward the rookies only after their fourth year of NFL service where they will be able to reap the financial rewards of free agency and the large contracts obtained the top players in the NFL. Thus the only way to get to the top money is to have four years of service in the NFL and therefore there will be no incentive for underclassman to remain in college. Instead, they’ll feel compelled get to the NFL to start their proverbial clock ticking towards free agency. When Joe Thomas debated leaving school early and ultimately returned to Wisconsin, he was ranked as the 20th best player in the draft. This would have netted him roughly a $15 million dollar contract. By returning to Madison for his senior year he improved his rating to the third pick and received a $40 million contract. So Thomas made $25 million dollars by going back to school. This type of example and payday is routinely employed justifiably by college coaches to encourage their underclassman to return to school before turning pro. Without this incentive there would be a mass exodus out of colleges by underclassmen every year.
Thus, with all due respect to the NFL, their arguments for a NFL rookie wage scale, upon further review are not supported by the objective facts and will do tremendous damage to the relationships between the colleges and the NFL. While, no real change is required, at most, that should be done and agreed to is some sort of “Russell” insurance to protect the NFL teams from picking the wrong players in the draft.