This might be of interest only to me, or a select number of you. But according to Jason Cole with Yahoo! Sports, contracts signed by prospects drafted in the third round and later, dating back to last year when the Collective Bargaining Agreement went into affect, is leaving money on the table.
Cole initiates by establishing money saved from these contracts:
According to information from multiple agents and NFL Players Association contract data, NFL teams combined to save more than $8 million in salaries for players selected from the third to the seventh rounds in 2011 based on the rookie cap.
Given the terms of contracts that have been negotiated so far this year and taken into consideration last year's deals, teams are projected to save upwards of a combined $10 million in 2013 and 2014.
One player representative says:
"You have all these players signing right now because everybody says, 'These contracts are slotted, it's so easy,' " an agent said, alluding to the fact that 116 of the 190 players drafted from the third to the seventh rounds this year had already signed as of Wednesday afternoon. "But then you look at these deals and see how much money is left on the table, money that the players didn't get, and you shake your head. … It may not seem like a lot of money in the big scheme of the NFL, but it adds up."
Now the issue here isn't overall money. For example. While the Cincinnati Bengals haven't signed a third-round selection yet, the contracts signed by tight end Orson Charles and cornerback Shaun Prater are consistent with the general increase of overall money per season.
Contracts of the No. 116 selection over the past three years:
|2012||116||Orson Charles (Bengals)||Four||$2.529M||$429,000|
|2011||116||Casey Matthews (Eagles)||Four||$2.480M||$434,864|
|2010||116||Thaddeus Gibson (Steelers)||Three||$1.58M||$366,000|
Contracts of the No. 156 selection over the past three years:
|2012||156||Shaun Prater (Bengals)||Four||$2.285||$185,000|
|2011||156||Mark Legree (Seahawks)||Four||$2.218||$178,532|
|2010||156||David Reed (Ravens)||Three||$1.349||$134,000|
The issue, as Cole points out, is the breakdown.
The most egregious example from 2011 was Denver Broncos linebacker Nate Irving, the third pick of the third round. According to the formula agreed upon by the NFL and the players' association, Irving's maximum salary for the 2012 season could have been $512,188.Instead, Irving received the second-year minimum salary of $465,000. That's a loss of $47,188. In 2013, the difference was $94,375 ($649,375 possible salary vs. a $555,000 actual salary). Over the second and third years, that's a total difference of $141,563 in salary Irving could have potentially received, assuming he plays three years with Denver, a strong possibility for a third-round pick.
Back to our previous example, Charles is expected to make $390,000 in base salary in 2012, with $480,000, $570,000 and $660,000 to complete the four-year deal. Compared to last year's No. 116 selection Casey Matthews, the Eagles linebacker received the same value as Irvin's contract of $465,000, which we assume is roughly the maximum deal for a second-year player drafted in the fourth round.
All of that being said, isn't it the agent's job to maximize these contracts?
Another part of the problem is that some agents are simply in a rush to get deals done. The belief is that those agents may be concerned about losing a player if they don't get a contract signed early. If a player changes agents, the original agent may have problems recouping any money he has advanced the player for training and/or living expenses.
"You're talking about agents who have put $30,000 out there to train a player, even a sixth-rounder," another agent said. "If that agent is under pressure to make sure he gets the deal done to get his money back, he's not going to wait around to get the best deal."
Agents are allowed to charge a maximum of 3 percent of the contract. For instance, on a four-year, $2 million contract, an agent stands to make a total of $60,000. The risk of waiting longer to get the player another $100,000 (which equates to another $3,000 for the agent) over the length of a deal is not worth the risk of losing the player.
An interesting read.
An interesting read.