Ever since the 2011 collective bargaining agreement, drafted NFL players have received four-year contracts. The contracts for first-round picks, however, include team options for a fifth year. The team has to exercise that contract option by May 3 of the contract's fourth year, which is why you saw a bunch of headlines on Monday about players who were drafted in 2018.
If you follow the NFL closely, you're used to this. This is, after all, the eighth draft class to which this has applied. But since not everyone does follow that closely, and because the new CBA the players and teams agreed to in March 2020 made a couple of key changes to the fifth-year option process, we thought we'd hit you with a short explainer on what this is all about.
Are these fully guaranteed salaries?
Yes, starting this year with the 2018 class. In previous years, the fifth-year option was guaranteed only against injury at the time it was exercised, then it converted to a full guarantee once the following league year began. So you could pick up a player's fifth-year option in May but still cut him the following March as long as he was healthy. The Titans did exactly that with 2017 first-round pick Adoree' Jackson, who had his fifth-year option picked up last May only to get released just before free agency opened this March. (Weep not for Adoree', by the way. Days later, he had a three-year, $39 million contract with $24.5 million guaranteed from the Giants.)
The new CBA signed last year changed the rule. Starting with the first-round picks from 2018, fifth-year options are fully guaranteed at the time they're exercised. That means, for instance, that Baker Mayfield is guaranteed an $18.858 million salary from the Browns in 2022, while Josh Allen is guaranteed a $23.106 million salary from the Bills and Quenton Nelson is guaranteed a $13.754 million salary from the Colts. All three had their options picked up by Monday's 4 p.m. ET deadline.
Does that make teams less likely to pick up the option?
We had thought it might, but it does not appear to have done so. Of the 32 first-round picks from the 2018 draft, 22 either had their options exercised or -- in the case of the Raiders' Kolton Miller -- signed an extension before the deadline. That figure is the second highest in the history of the fifth-year option. The 2014 draft class had 23 of its 32 options picked up.
The 2017 draft class -- the most recent until this year -- had an all-time high 13 fifth-year options declined. It could just be that the 2018 first round turned out to be unusually good. But from a big-picture standpoint, teams were not at all hesitant to pick up the options just because they were fully guaranteed.
Why is Josh Allen's option salary higher than Baker Mayfield's, if Mayfield was picked first and Allen seventh?
Because the 2020 CBA also changed the method by which the option salaries are determined, starting with the 2018 draft class. Originally, the option salary depended on which position each guy played and whether he was picked in the top 10. (A top-10 quarterback would have a higher fifth-year option salary than a quarterback who was picked from 11 to 32. Mitchell Trubisky's fifth-year option number therefore was higher than Deshaun Watson's.)
Under the new rules, the option salaries are determined by position but also can rise based on several factors, including playing time and number of Pro Bowls the player makes in his first three years. So Allen's 2022 salary is $23.106 million because he made one Pro Bowl (it would have been higher if he'd made two), while Mayfield's is $18.858 million because he reached the playing-time incentive but didn't make a Pro Bowl. No. 3 pick Sam Darnold's salary will be the same as No. 1 pick Mayfield's for the same reason, while No. 32 pick Lamar Jackson's will be the same as No. 7 pick Allen because Jackson made a Pro Bowl.
For another example, look at the safeties who were drafted in the 2018 first round. No. 11 pick Minkah Fitzpatrick's 2022 salary will be $10.612 million because he made the Pro Bowl twice in his first three years. No. 17 pick Derwin James' 2022 salary will be $9.052 million because he made only one Pro Bowl. And No. 28 pick Terrell Edmunds' 2022 salary would have been $6.753 million because he reached the playing-time incentive but didn't make a Pro Bowl. (I say "would have been" because the Steelers did not exercise Edmunds' fifth-year option.)
Does this new calculation system hurt anyone in particular?
It likely will come as no surprise to you that the answer is, "Yes -- highly drafted running backs." Giants running back Saquon Barkley, the No. 2 overall pick in the 2018 draft, will earn a 2022 salary of $7.217 million on his fifth-year option. That is less than the yearly average of his original four-year rookie contract (which averaged $7.8 million per year) and nearly $5 million less than his fifth-year option would have been if the old system had it still been in place. It was a no-brainer for the Giants to pick up Barkley's option at that number. They didn't even have to give him a raise.
Of course, you could make the hypothetical argument that the Giants might not have picked up the Barkley option if it had been $12.02 million, as it would have been under the old system. Barkley is coming back from a major injury and has missed 17 of a possible 32 games over the past two years. It's a lot easier to bet $7.217 million on him than it would have been to bet $12.02 million on him -- especially now that the options are fully guaranteed.
Still, Barkley stands out as somewhat uniquely fleeced by this new setup. Jason Fitzgerald at OverTheCap.com found that Barkley was the only 2018 first-rounder whose fifth-year option salary was less than his fourth-year cap number, that all others increased by at least 32% and that the average increase was more than 128%.
Can teams still negotiate contract extensions with these players now that the options are picked up?
Yes, and many of them will. Exercising the option does not prevent a team from continuing to negotiate a contract extension with the player in question. Allen, Mayfield, Nelson, Lamar Jackson and others all likely will find their contracts extended and their 2022 salaries adjusted as part of those extensions. The CBA prohibits teams from discussing extensions with a player until after his third year in the league, so this is the first offseason in which any of the 2018 picks could even start negotiations on an extension. Miller already has his, and he won't be the last to get one.
Conversely, players whose options weren't picked up aren't necessarily done with those teams. Leighton Vander Esch, Hayden Hurst and Sony Michel and more are still under contract through 2021, and we have seen cases (Mark Ingram in New Orleans, Kyle Fuller in Chicago) of players who've played their way into new contracts after having their fifth-year options declined.
Free agency isn't a bad thing, either. Tennessee didn't pick up 2016 first-rounder Jack Conklin's option, and he signed a huge free-agent deal last offseason with the Browns.