NFL rookie signing rules
Wednesday, August 12, 1998
The salary cap is the amount of money that each team can spend on player salaries. It is determined as a percentage of defined gross revenues (DGR), a term defined in the League's Collective Bargaining Agreement (CBA) as the aggregate revenues from all sources relating to the performance of NFL games.
A portion of what teams are permitted to spend on player salaries is spent on rookies. The rookie pool limits the amount of dollars under the salary cap that a team can spend on its rookies.
A voidable is a year that drops off of the contract or is cancelled upon the occurrence of some pre-determined criteria. It is used in rookie contracts to reduce the pool number in a particular contract.
The NFL CBA prohibits teams from back-loading rookie contracts (i.e. paying the player a small amount in his rookie year and an enormous amount in later years). The CBA contains a provision that prevents a team from increasing any contract year in a rookie contract by more than 25 percent of the player's rookie contract, excluding the signing bonus.
Incentives are performance clauses in contracts that pay the player additional money over and above his base salary. In order to prevent teams from circumventing the rookie pool by paying players large bonuses for easily achievable performance clauses, the CBA divides performance incentives into two categories: Likely to be earned and Unlikely to be earned. Likely to be earned incentives count either fully of partially against the rookie pool.
A term used to describe the pattern of rookie contracts being valued in a hierarchical manner, beginning with the first pick in the draft having the highest value and ending with the last pick in the draft having the lowest value.
NFL contracts are not guaranteed. Players obtain partial guarantees through signing bonuses (which the player retains regardless of whether or not he makes the team or gets injured) and through partial skill and/or injury guarantees contained in addendums negotiated and attached to the standard player contract.