Doozie on 5th year option

[DaBruinz]

This wasn't talked about that I saw and it's really going to affect deals going forward.

NFL.com news: Owners, players make progress, aim to seal deal next week

According to sources, it was agreed that the fifth-year option for rookie contracts would pay top-10 picks the average salary of the top 10 players at their position. For picks 11 through 32, the amount would be the average of salaries Nos. 3 to 25 at a given position. All figures will be taken from the third year of rookie contracts, meaning that for top-10 picks, their fifth-year option amount would be equal to the transition tag number from the previous year

I think that the result is going to be that we see a lot of contract extensions signed before the end of the 3rd year of contracts.

 

[Ron Sellers]

So essentially the 5th year option is a mini-version of the price of a franchise tag?

Wow, I don't know why I didn't pick up on that earlier.

Then again, I suppose it's a wash considering contracts like the Rams' QB got a year ago; pay me now or pay me later.

Going forward players and their agents are going to be gripping when it comes down to pick #9 and pick #10 of the NFL draft, because there's a huge cliff in future pay between being the tenth or eleventh pick of the draft.

 

[ctpatsfan77]

So essentially the 5th year option is a mini-version of the price of a franchise tag?

Wow, I don't know why I didn't pick up on that earlier.

Then again, I suppose it's a wash considering contracts like the Rams' QB got a year ago; pay me now or pay me later.

Going forward players and their agents are going to be gripping when it comes down to pick #9 and pick #10 of the NFL draft, because there's a huge cliff in future pay between being the tenth or eleventh pick of the draft.

More accurately, it's about what the fifth-year salary cap hit works out to now at the top, although it might hurt the 9-10 teams a bit.

[That said, for players in the 11-32 range, the hit works out to approximately that of the #13 player at that position, which is probably still above what those players make now.]

Think about it for a second: Sam Bradford got a deal for six years, $78M. That's an average cap hit of $13M. But when you take into account the rookie cap that limits his first-year cap hit to <$5M, that works out to about $15M/year over the last five years.

 

[Ring 6]

This wasn't talked about that I saw and it's really going to affect deals going forward.

NFL.com news: Owners, players make progress, aim to seal deal next week



I think that the result is going to be that we see a lot of contract extensions signed before the end of the 3rd year of contracts.

I wonder if the one year extension would just turn into a long term extension.
If you are willing to add a 5th year at that high cost in year 3, why wouldnt you just extend them 3 more years (or demand it). Getting 1 extra year at that price then losing them isnt a great business decision.

 

[RussFrancis]

I wonder if the one year extension would just turn into a long term extension.
If you are willing to add a 5th year at that high cost in year 3, why wouldnt you just extend them 3 more years (or demand it). Getting 1 extra year at that price then losing them isnt a great business decision.

Youve got the perspective of a Patriots' fan/supporter. In other words, youre expecting logical, effective and efficient outcomes to a given player's contract situation. I think about this 5th year option, and I still wonder how in the hell poor Carson Palmer ever agreed to a 10 year contract w/ the Bengals, essentially as an extension from his rookie deal. Teams will handle this 5th year situation in a variety of ways. We'll of course expect our boys to just figure it out, like they do everything else.

 

[MoLewisrocks]

I linked to this in the other thread on their settling the rookie cap but I guess you missed it.

In context this isn't a bad deal at all. The owners were offering a flat rate of $7-9M for that 5th year. The union wanted top ten for the top 16 and top 20 for 17-32. What they settled for is actually the transition tag price (franchise tag is top 5) from their 3rd season (ergo also discounted by 2 years from an actual top ten salary in their 5th year). With the exception of QB's it will likely result in single digit million dollar salaries for that 5th season - which most of them had coming in backloaded or incentivized deals anyway. Mostly the cache of the formula will make it harder for players to justify a holdout heading into that final year of their rookie deal and easier for teams to part company with a pick who is projecting as a lot less than dead cap on a 5-6 year deal used to make him worth.

Cam Newton is projected to get a deal in the 4/$35M range with half the guaranteed money the last couple of #1 drafted QB's got. He can be cut after year 3 if he isn't working out and it won't kill the teams cap for two more seasons... Or they can pick up his option at top ten QB salary in 2013 for 2015 (let's say that's $15M even) and his total deal will still likely be $3M less on average than Bradfords was ($15M+ savings over the first 5 years).