Bronco Rookie Contracts

The dog days of summer are here and OTA's and minicamps are happening. The next order of business is to get the new kids signed to a contract. It was thought (by me) that new contracts would be a problem this year due to the lack of a salary cap. The players and owners somehow couldn’t manage to reach an agreement — despite the billions of dollars in revenue generated every year. I confess that I was wro...wro...mistaken. The only real effect has been a slightly lower amount of signings to this point as compared to previous years.

The signing process usually starts revving up after the top draft picks sign their deals. A domino effect ensues as the market has been set for the top half of the first round. Even though nothing has been settled yet, we can still put a range on the likely numbers on each rookie contract. Last year, top draft pick Matthew Stafford secured a contract for 6 years worth $78 million. $41.7 million of that is guaranteed. It is rumored that this year's, No. 1 pick Sam Bradford has requested a contract for 6 years/ $78 million with $50 million of that guaranteed. He is represented by Agent Tom Condon of Creative Artists Agency, so that figure is likely to happen.

It’s no secret that the rookie salary structure is completely ludicrous in the NFL and it’s something that the league will eventually have to change or else it’ll keep getting worse. Especially for the fans, since it can only result in higher ticket prices. When the new Collective Bargaining Agreement is reached, the rookies will have a salary cap. A player that has never once stepped on the field should never be able to command more money than anyone on the team’s current roster. It just doesn’t make any sense. That means this year’s top picks will see the last of the jackpot deals in rookie contracts.

Most teams wait until July to sign players, primarily since there's little or no cash flow in the offseason -- and virtually every rookie will work without a contract at minicamps and Organized Team Activities. One of the first things an agent tells his client, is to get umbrella insurance as soon as possible. Preferably before the draft, as premiums will only increase for someone in their line of work.

Last year, by the end of June about 40% of the 256 drafted players had been signed. To date, there are 28 rookies with new contracts, including the last two Broncos picks. The process is starting to gain momentum though. During the last week, fifteen contracts have been signed.

The Chicago Bears have led the charge in contract signings. They have established a trend. They're the first NFL team to have all their draft picks signed for the fifth consecutive year. The bears Front Office had all of their draft picks signed by June 10th last year when they were also without their 1st and 2nd round picks.

Here are the 28 signings and their agreements per RotoWorld, who I have found to be a legitimate source for player salaries.

** A special Shrout out to TJ for the tutorial on chart insertion.

The salary amounts for players taken in the later rounds are up an average of 2-3% from last season. This average is not uniform though. It will increase to around 11% for the mid-round selections, and may even reach as high as 37% for the 1st round draft picks.

Rookie base salaries for new contracts this year are $320,000 for 2010, $405,000 for 2011, and $490,000 for 2012 and 575,000 for the 2013 season. There are two main components to a player’s contract: the guaranteed portion, which includes signing bonuses, and the nonguaranteed portion, which in large part are the base salaries and monies earned after the first two years.

 Another factor that affects the compensation rookies receive is the length of the contract. The CBA sets the maximum number of years for a rookie contract. Rookies drafted among the first 16 picks of the first round may sign up to a six-year contract, and those in the bottom half of the first round may sign for a maximum of five years. All other drafted players may sign for a maximum of four years. Limits on length of contract affect such compensation as signing bonuses, option bonuses and other types of guarantees that typically increase along with the length of contract.

Here are the numbers I worked up for the other 7 Bronco rookies according to trends from the last two drafts and the signings so far. 1st round draft picks, Demaryius Thomas and Tim Tebow, will be among the next Rookie players to join the Millionaires club of the NFL. Welcome to a higher tax bracket boys.

Demaryius Thomas is represented by Agent Todd France of France AllPro Athlete Management (FAAM). Consequently, France has another Bronco Wideout for a client; Eric Decker. Tim Tebow is represented by Jimmy Sexton, who runs Athletic Resource Management Inc. Zane Beadles is represented by Rep 1 Sports Agency. 80th pick J.D. Walton uses ProFiles Sports Agency, and Perrish Cox is using the Willis & Woy Sports Group to handle his negotiations.

The typical  later-round rookie contract is straightforward: a signing bonus and four years of minimum salaries, the fourth-year escalating based on performance. These performance thresholds -- different from team to team -- can consume more of the negotiation than anything else. Teams can, and will, always use the standard line "That’s what we do," as consistency is the ultimate negotiating catchall. Some teams are consistent with their escalator language through the draft; others have tougher thresholds going down in rounds.

The perception that rookies get too much money is created mainly by the top 10 to 15 picks, which as a group gets generous contracts but represent only about 2.5% to 3.75% of the annual rookie class.  Typically, a top pick in this category gets about more than one-half of his club’s rookie pool, leaving the other half to be shared by the other rookies on the club.  If anything, it is the other rookies who pay the price for the big contracts at the top of the first round, not the veterans.

Still, to most football fans, that's an awful lot of zeroes.

Sign on the dotted line gentleman...and welcome to the NFL.

Go Broncos!