Quick Thoughts on New Rookie Options and CBA Revenue Split

The proposed CBA came out today and I just wanted to share a few thoughts on the brief look I had at it since we should know within a week if it is ratified or not. For the most part this CBA reads very much like an extension of the current agreement with some minor tweaks and Im sure some added things related to player safety and data controls (these are the type of things that we may touch on in a book but I’m more into the salary aspect of these things). There were two things that I wanted to talk about a bit- the new rookie option and the proposed revenue split.

One of the bigger changes deals with the 5th year rookie option and  to a lesser extend the proven performance escalator. Depending on where you are drafted these can be looked at as a win or a loss. Let’s start with the option year.

In the current CBA the option was either based on the NFL transition tag if you were drafted in the top 10 and then the 3rd through 25th contracts if you were outside of it. They did fix this to some extent such that every first round pick is treated the same. There are four levels that you can earn in the new CBA. The levels of pay are the 3rd through 25th average contract, 3rd through 20th average contract, transition tag (top 10), and franchise tag (top 5 contracts). The first one is the default while the others are based on playtime and pro bowl selections. Essentially to move up to the transition tag level you need one Pro Bowl in three years and two Pro Bowls in three years to land the franchise tag.

The Pro Bowl is essentially a popularity contest and is generally biased against good players on bad teams. Its easier if you play a skill position or are a pass rusher where you put up more overt stats but can be difficult as a young player to somehow get one let alone two Pro Bowls. A QB who sits his rookie year is really behind the eight ball.

Surprisingly they did not have an alternate possibility for All Pro inclusions, which are very difficult and can also be a popularity contest of sorts but can cover some players who fall through the public voting cracks. Nor did they have a high end playtime incentive. These could have been just another path besides the Pro Bowl.

For the lower part of the draft it’s a no harm no foul rule. They cant be hurt even if its difficult to gain from it. For the top though they may lose out. Players who get no Pro Bowl nods early will go from being a transition tag option to a 3rd through 20th option. That is going to be much lower and lead to more players potentially being locked into bad rookie deals. Will it impact a lot of players?  Probably not but its always best to cover all bases. As a side note I do think the potential of the higher end escalator may knock more running backs out of the first round but that’s not really a CBA issue.

The PPE is essentially similar with everything tied to Pro Bowls if you want to hit the higher PPE thresholds. In a sense its better than nothing since the last one had no way to escalate beyond the lowest tender based on playing time.

When it comes to the revenue split I am just still surprised that this is all the players got for a 17th game. The league basically moved from 46% of revenue to 48% of revenue in exchange for a 17th game. One of the neat things in this CBA is they do give us a number of $7.357 billion a year that is essentially the baseline for the television money the NFL brings in. While technically the split on media is higher than 46% (its 55% toward the calculation that floors out at 46% in the old CBA) I think it’s fair to use that number to determine what the players currently receive on a per game basis from the CBA.

If the players receive 46% of this figure they are receiving $3,384,220,000 of the TV money. That works out to $105,756,875 per team for the season. That payment for 16 games works out to be $6,609,804 per game.

If you run the calculations for 48% we get to $3,531,360,000 for the players of which $110,355,000 goes to each team. Those are both bigger numbers but now we are dividing that by 17 rather than 16. That works out to $6,491,471 per game or about $118,000 less per game than they pay in the current agreement. To balance out the NFL would have had to raise the revenue split to 48.9%.

Of course that’s not the entirely proper way to look at it. 17 games will bring in more revenue and the break even point there would require the media number to increase by a bit more than 2% over the 16 game schedule. That’s likely in the ballpark of $150M a year and they should surpass that easily. If the numbers worked out to something like a 30% increase in media rights on 17 games vs a 20% increase for 16 games that’s around an extra $140K per player for that added game. For a minimum salary player that is a lot. For a potential higher earner its not worth it at all.

In any event the ability to earn more based on the 17th game is strictly based on what type of raise the NFL can negotiate for that one extra game. If the disparity is not that large the players will likely not see the added increase that pushes contracts into a higher salary level. However if we use $2M  a year as our cutoff for yes or no on a vote its basically 65/35 for and that is probably why this will pass.