The absurdity of rookie salaries seems to come up every year. Remember last year, when Jake Long's 57.5 million dollar deal with Miami made him the highest paid offensive lineman in the NFL-before he played a single snap? The casual fan sees absurd numbers such as this one, and assumes that the league is tilted against veterans. Many have called for a rookie salary cap, or other limitation on these absurd contracts. However, what is generally ignored is what happens to the largely invisible players who are picked after the first and second rounds. Are their deals as large?
When teams draft rookies, they are allocated a rookie signing pool. This pool is determined based on their amount of draft picks and their relative positions. The salary pool is a fixed limit that franchises must be under, just like the salary cap. It rises and falls in tandem with the cap. The pool was specifically instituted to prevent rookie salaries from outpacing veteran salaries. Significantly, all of a team's rookies fall into the same pool. So, the less money Jake Long gets, the more that is theoretically available to sign Phillip Merling(their second round pick).
An NFL Players Association study shows that the average rookie salary pool in proportion to the overall salary cap decreased from 7 percent in 1995 to just under 4 percent in 2008. So, while there is more money overall(revenues and the salary cap have increased in that period as well), it means that in relation to the average veteran, the average rookie is making less than they did in 1995.
So when a player like Jake Long receives a 57 million dollar deal, it pinches into the already diminished rookie salary pool. In fact, when he signed(with a cap number of 3 million dollars for 2009), it left only 3.5 million to sign the 8 remaining draft picks, including 2 second rounders and a third rounder. While clearly not deserving a deal on the same level as Jake Long, these players gave up money so that the franchise could afford to pay Jake Long a record contract.
Why is this? It is likely because first rounders can hold out and carry out the threat if needed, whereas others cannot. The current Michael Crabtree saga is an example; as a quick fill-in, he is demanding a contract larger than that of Derrius Heyward-Bey, who was picked several slots higher. If he is not signed, there will be a fan outcry, the 49ers will lose prestige, and if he does choose to hold out for an entire year, he will likely be picked highly next year. First round draft picks, because they are well-scouted, also generally have the option to force a trade, as many teams covet them. Now, if fifth round pick Scott McKillop tried the same, he would likely never play in the NFL again. With far more bargaining leverage, the team is able to offer comparatively smaller contracts to lower round picks.
Given these factors, a rookie salary cap is a bad solution. What is needed is a slot-specific salary cap, governed by a similar formula to the one used to generate the rookie salary pool. This cap needs to carry year over year. For example, a player drafted eighth in 2008 should have his contract limited to a certain number(for argument's sake, say 20 million over 5 years). A team would not be able to exceed the length, average salary, or total salary of this deal. Even if a player like Crabtree held out the entire year, he would be restricted to the same number the following year. First round salaries would also need to be adjusted downward. This would prevent first-round players from essentially abusing the system and pushing down salaries for lower draft picks.
To prevent teams from abusing this power, there would need to be a fair balance in salaries. Salaries for lower-round players should be adjusted upward, to where they were before the 1998 CBA, and locked with the salary cap, so any future salary cap rise would also increase these salaries. With this restriction, teams would be allowed flexibility to offer a wide range of deals to players, but would be prevented from paying one player at another's expense, which the current system forces teams to do. There would also need to be a salary minimum, to ensure that contracts are essentially paid on a downward scale over the course of the draft.
I believe that this system will help the NFL. The average fan only sees the greed of first round picks, and does not generally see the lower-round contracts. This will help to stem fan resentment of the NFL. It will also help locker room morale, and keep salaries controllable on the upper end. As first round rookie contracts spiral upwards, they set the pace for veteran salaries, which have also skyrocketed on the upper end in recent years. Rookies also make up 19% of all NFL rosters, but only comprise 11% of all guaranteed money, even with contracts such as Long's, which features 30 million guaranteed. This is a clear tilt towards veterans. The argument can be made that rookies are unproven and thus should not be given guaranteed contracts, but these numbers are skewed upwards by first round picks. This re-balancing would face challenge from the NFL, which is trying to decrease salary as a percentage of cap.
Ironically, while throwing out many flashy, big-money contracts on the high end, the NFL is actually cutting overall salaries as a percentage of the cap. They are then able to call players greedy, and make it seem as though salaries are out of control, generating sympathy for a lower cap number. Ultimately, this measure would cost the league more, but it would make the NFL much more fair for all.