Boxed In, Squeezed Out
Now two years removed from the negotiation of the 2011 collective bargaining agreement between the NFL Players Association and the league, the ramifications of the new 10-year CBA—forged through months of talks, litigation and obfuscation—are starting to crystallize. The most obvious change is in the compensation to players entering the league. Having negotiated close to 100 rookie contracts in my nine years as vice president of the Packers, I find it remarkable to see the drastic reduction in pay to rookies, specifically first-rounders, and the dramatic ease in negotiating these deals from the old CBA to the new.
In working through that CBA, rookie compensation was the easiest issue to resolve. NFL owners, embarrassed by cap-busting contracts for such washouts as Ryan Leaf and JaMarcus Russell, were intent on a correction. And veteran players—resentful of seeing unproven picks outearn them—were content to give the rookies a haircut. With no voice in the negotiation, the future rookies were sacrificed, and those at the top of the draft took the hardest hit.
Under the CBA, rookie compensation, specifically maximum bonus levels, is preset through a formula dictated to agents and team negotiators. There are precious few negotiable items; a union official involved in formulating the system told me, "A trained monkey could negotiate these rookie contracts."
In 2010, top pick Sam Bradford signed for a guaranteed $50 million over the first four years of his contract. The top overall picks since the CBA adjustment—Cam Newton and Andrew Luck (and Eric Fisher to come)—are getting less than half that amount, approximately $22 million over four years.
The rookie system achieved the two objectives NFL owners sought: 1) cheaper contracts for rookies and 2) little to no negotiation. And enhanced penalties for holdouts have eliminated that potential nuisance for teams. As a result, draft picks are signing far earlier and quicker.
But the rookies' sacrifice isn't confined to their debut seasons. All drafted players receive four-year contracts, virtually eliminating restricted free agents—three-year players with expiring contracts—from the marketplace. And no matter where they're selected or how well they perform over their first few years, drafted players cannot renegotiate their deal until they finish their third season. So, for instance, Seattle's Russell Wilson, a 2012 third-round pick who tied Peyton Manning's NFL rookie record with 26 touchdown passes, will continue to be one of the lowest-paid starting quarterbacks for the next two seasons. He's scheduled to make $526,000 in 2013 and $662,000 in '14 and cannot have his contract adjusted until 2015 at the earliest.
Teams now have a fixed labor cost that cannot be modified for at least three years—just below the average length of an NFL career. That's an enormous benefit; it also gives front offices a convenient excuse when a young player grumbles over his contract.
But what about the veteran players to whom the new system was designed to transfer cost savings? While superstars such as Joe Flacco and Aaron Rodgers have secured top-of-market extensions, far more money has been shed from veteran contracts than spent on them. Before the March opening of the league year, teams deleted hundreds of millions of dollars in future contracts for veterans, many of whom—Bart Scott, Kyle Vanden Bosch, Michael Turner—were recent marquee free-agent signees. When the bell rang for free agency, a select few such as wideout Mike Wallace and linebacker Paul Kruger cashed in, but the crowded market soon sagged, and many players settled for one-year deals, hoping for more robust spending in 2014.
Now two months into free agency, the list of unsigned veterans reads like a 2011 Pro Bowl defensive roster. Brian Urlacher, Charles Woodson, John Abraham, Richard Seymour and others wait by the phone while younger—and cheaper—players take over their former stations. Even if those established players were to sign for the minimum salary for a 10-year veteran, $940,000, that is more than twice what teams might lay out for younger players with better upside.
Teams appear to be getting younger for philosophical reasons as well as financial ones. My old team, the Packers, holds fast to the mantra of "draft and develop": trusting scouts to uncover young talent, avoiding quick free-agent fixes and being unafraid to put younger players on the field. That approach has become more widespread, and the success of recent general managers honed in college scouting—the Falcons' Thomas Dimitroff and the Colts' Ryan Grigson among them—clearly influenced the latest front-office hiring cycle, as teams added more decision-makers committed to drafting and developing younger players.
In addition, although nowhere near the level found in baseball or the NBA, the Moneyball approach is gaining traction in the NFL. In Green Bay, I had a second "war room" that focused on financial and analytical data rather than combine numbers; crunching that data often showed that a "maturing" player (typically younger and cheaper) provided a similar overall return to that of a "mature" (established, more expensive) player. Many such operations now exist throughout the league.
Finally, teams are also realizing the roster flexibility that younger players allow, especially at premium positions. Two of the most active teams this off-season, the Seahawks and the 49ers, have taken advantage of quarterbacks—Wilson and Colin Kaepernick—on rookie contracts earning a fraction of the average veteran's pay at the position. For Seattle and San Francisco, that has freed up $15 million to $20 million for other position needs.
The new CBA took an axe to rookie compensation in the name of the greater good. That good has certainly been reaped by the teams. For the players—especially younger ones outperforming their contracts and older ones waiting for a call—the harvest hasn't been as bountiful.
Andrew Brandt, a former attorney and agent to NFL players, and vice president of the Packers from 1999 to 2008, teaches sports business at Wharton and directs the Moorad Center for Sports Law at Villanova Law School.
SIGN OF THE APOCALYPSE
Reacting to "rumors and information on ... fishing blogs," officials at last weekend's Winni Derby fishing tournament on New Hampshire's Lake Winnipesukee announced that the winner of the Grand Prize Salmon Division would be subject to a lie detector test before receiving the award.
PHOTO ILLUSTRATION
ILLUSTRATION BY DARROW
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SCIENCE PHOTO LIBRARY/GETTY IMAGES (LIE DETECTOR)