Each year, the NFL draft turns college prospects into millionaires with a single announcement. Forbes reports that a player’s salary is calculated through a complicated algorithm that accounts for the Rookie Compensation Pool and NFL Salary Cap. The Rookie Compensation Pool caps the amount of money a team can spend on a player during their first season. The rookie’s contract and signing bonus depend on in which position he is drafted.
The Draft has proven to be a rigorous selection beginning with the worst team in the NFL typically selecting the top college football players in the country. In many instances, the selection is based on need for a position. If the Quarterback is injured or not performing well on a last-place team, then their logical decision is to select a first-round draft pick for their initial selection. Although one player cannot turn an entire team around, if that team maintains a balance of players, they may have a good shot at making the playoffs. For this reason, the last place team always has the first pick while the first place team has the last pick in the first round.
NFL Salary Cap
The NFL’s Salary Cap is anticipated at being $155.27 million for the 2016 season. This is an increase of 9-percent from 2015. The Salary Cap is simply the total amount of money a team can spend on players. The goal of this is to even the playing field so that markets with the most money do not buy the best players and have continuous winning seasons.
Rookie Compensation Pool
The Rookie Compensation league-wide pool will land around $1 billion for the 2016 season. This is a $25 million increase from 2015 and is split across 32 NFL clubs proportionally to their total number of draft picks and associated positions. Teams who select picks earlier have a larger piece of the pool. Despite the increase, signing bonuses are expected to remain the same as last year.
There is a significant difference between those selected in rounds 1 and 2 and others chosen between 3 and 7. Early round picks are likely to have guaranteed salaries. Also, due to the NFL’s collective bargaining agreement rule aptly named the 25% Increase Rule, no rookie’s base salary plus bonus can increase by more than 25% every year. However, rookies are guaranteed the following: $450,000 in Year 1, $525,000 in Year 2, $600,000 in Year 3 and $675,000 in Year 4.
If a rookie is eventually signed to a contract, they will get a 4-year deal whereas undrafted rookies can only be eligible for 3-years. Additionally, first-round picks are privy to Fifth-Year Options which contractually allow teams to hold on to the rights of their draftees for an extra year as long as they select this option during the off-season of their 3rd and 4th contractual years. Those drafted between rounds 3 and 7 are only eligible for a Proven Performance Escalator (PPE) which allows those chosen in later rounds to receive additional compensation assuming they have participated in at least 35% of plays during the initial 3 years of their deal.
NFL Draft 1st Round Rookie Salary Projections for 2016
With the close of the 2016 NFL Draft, no salaries have been negotiated by their teams as of yet. The top pick in the first round of the 2016 draft was Jared Goff who is estimated to have a total contract of $27.9 million with an $18.5 million signing bonus. Goff is the former Quarterback of the University of California Golden Bears. The second pick in the first round was Carson Wentz, Quarterback from North Dakota State University. He was signed by the Philadelphia Eagles for a $26.6 million total contract with a $17.5 million signing bonus.
The third pick in the first round went to the San Diego Chargers who selected Joey Bosa, Defensive End from The Ohio State University. Bosa earned an estimated $25.8 million contract with a $17 million signing bonus.
The fourth selection in the first round was Ezekiel Elliott, also from Ohio State who was selected by the Dallas Cowboys for a cool $24.8 million total contract and a $16.3 million signing bonus.
To round out the top five, Jalen Ramsey, Cornerback from Florida State University was selected by the Jacksonville Jaguars for a $23.3 million total contract and $15.1 million signing bonus.
The additional 26 from the first-round include:
6) Ronnie Stanley – Ravens – $20.4 million
7) Deforest Buckner – 49ers – $18.2 million
8) Jack Conklin – Titans – $15.9 million
9) Leonard Floyd – Bears – $15.7 million
10) Eli Apple – Giants – $15.1 million
11) Vernon Hargreaves – Buccaneers – $14.1 million
12) Sheldon Rankins – Saints – $12.8 million
13) Laremy Tunsil – Dolphins – $12.4 million
14) Karl Joseph – Raiders – $11.8 million
15) Corey Coleman – Titans – $11.7 million
16) Taylor Decker – Lions – $10.9 million
17) Keanu Neal – Falcons – $10.7 million
18) Ryan Kelly – Colts – $10.4 million
19) Shaq Lawson – Bills – $10.3 million
20) Darron Lee – Jets – $10.2 million
21) Will Fuller – Texans – $10.1 million
22) Josh Doctson – Redskins – $10 million
23) Laquon Treadwell – Vikings – $9.9 million
24) William Jackson – Bengals – $9.7 million
25) Artie Burns – Steelers – $9.6 million
26) Paxton Lynch – Broncos – $9.4 million
27) Kenny Clark – Packers – $9.3 million
28) Joshua Garnett – 49ers – $9.3 million
29) Robert Nkemdiche – Cardinals – $8.6 million
30) Vernon Butler – Panthers – $8.4 million
31) Germain Ifedi – Seahawks – $8.2 million
When a player is drafted lower in the positioning, he can take a major financial hit and lose millions of dollars when compared to the top ten selection. As you can see, the financial difference between the first selection in the first round draft pick and the last selection in the first round is almost $20 million. The financial difference between the first selection in the first round and a player chosen in the later rounds is approximately $26.1 million which is a huge gap.
Even falling out of the top 10 in the first round can cost a player approximately $1 million based on the 2016 estimated salaries. Between number 11 and number 12 is around $1.3 million. Therefore, to maximize earnings, it is critical to make the top 10 or at least the first round.
As the 2016 NFL Draft has shown, a rookie can make as much as $27.9 million or as little as $1.8 million in contracts. While signing bonuses tend to be significant, the long-term salary is the most important financial aspect. Of course, once their contract is up in 3-4 years, players can go to any team or request more money for a re-signing. If the player ends up being an all-star, they certainly become more marketable and can make a lot more money in the future.