NFL CBA Creates 5th-Year Anomaly For First-Round Running Back

The NFL collective bargaining agreement, which expires following the 2020 season, was negotiated and agreed to back in 2011. One of the rule changes of this CBA dictated that all first-round draft picks would sign four-year contracts with a fifth-year team option.

This takes the draftee beyond the four-year period that triggers free agency. Those players selected in Rounds 2 through 7 would sign four-year contracts, with the teams having the option to have the athlete play out the fourth year or have him sign an extension after Year 3. This rule creates an anomaly for the first-round draft picks outside the top 10, especially at one of the most physical positions of the sport: the running back.

Effectively, the player taken in the first round will need to put forth additional years of production and more importantly will need to stay healthy during that additional time to secure a large second contract.

Securing a second contract in the NFL is so important simply based on the average career length in the league. The chance of injury at running back is much higher than for many other positions, and rare is the back who plays effectively into his 30s. Per Statista, the average career length of a running back is 2.57 years. That’s significantly lower than the 4.4-year average of a quarterback career and even the general average career length of an NFL player — 3.3 years.

Although first-rounders are bound to four-year contracts with fifth-year team options, standout first-rounders drafted higher in the round are able to sign long-term extensions with their team following the third year on their rookie contracts.

We saw this happen with the No. 10 overall pick in the 2015 draft, Todd Gurley. He signed a massive four-year, $57.5 million contract that guaranteed him a whopping $45 million. Other first-round players from No. 11 to No. 32 look to sign contract extensions prior to playing out their fifth-year team options, in an effort to avoid the franchise-tagging game.

We are currently seeing this play out with star defensive lineman Aaron Donald of the Rams. Donald has chosen to hold out of training camp and the three preseason games that the Rams have played thus far. Per the NFL CBA, until 2016, fines were $30,000 for each practice missed. Now that we have passed 2016, the Rams have been able to fine him $40,000 for each training camp day missed and the equivalent of one game check, or $405,000, for each preseason game, missed. It is up to the Rams’ discretion whether they will choose to enforce the fines, but the Rams and Donald are expected to reach an agreement this week.

Odell Beckham Jr. was looking to avoid the same fifth-year situation and yesterday signed the largest contract for a wide receiver: five years for $95 million, with $65 million guaranteed.

The team has all the leverage in these situations, being able to force the first-rounder to play five years, with the ability to then use a franchise tag and keep the player from freely negotiating for six or seven years. For first-round draft picks, fifth-year salaries are determined by initial draft position within the round. First-rounders drafted in the top 10 will earn salaries equal to the average of the top 10 at their respective positions. Those taken with Picks 11-32 in the first round will earn an average of the third- through the 25th-highest salaries at their respective position. Based on these numbers, it is maybe more beneficial, compensation-wise, for a running back to be selected in the top of the second round of the draft if he is not taken in the top 10 of the first round.

Historically, the running back position has not been the most coveted of positions in the first round by GMs. Since 2011, 33 players, or less than 7% of those drafted in the first or second rounds, have been running backs, with only 12 of those players being first-rounders. The whole point of the fifth-year option is to reward teams for selecting players (at a higher salary) in the first round by giving them the right of first refusal on that extra year. Subsequently, the reward to the player subjected to this additional year is a salary that is significantly higher than players’ previous seasons. While the No. 1 overall pick this year signed a $32.68 million contract, the 32nd overall pick signed a contract worth a total of $9.47 million. With this in mind, are players really better off being in the first round if they aren’t in the top 10 of the round?

My client Ronald Jones is a running back who was taken in the second round, 38th overall, by the Tampa Bay Buccaneers; his contract is worth $7.07 million over the next four years. As the draft unfolded, projections had Ronald being drafted either late in the first round, or early in the second (where he eventually was taken), and from a financial, logistical and practical standpoint, that is the perfect place for him.

Let’s look at Rashaad Penny, the San Diego State running back, selected by Seattle Seahawks in the first round of this year’s draft. Penny signed a four-year, $10.77 million deal.

At face value, it looks like Penny got the better end of the deal; however, at the time of signing, the team effectively has up to seven years of leverage over Penny‘s future. If Penny is able to play well, the Seahawks will likely pick up the fifth-year option, at which point he will be paid the average salaries of the third- through 25th-highest salaries at running back. If he again plays well that year, the Seahawks will likely hit him with a franchise tag, which would cause them to pay a larger salary but would not require the team to commit to him long term, and they could do so again the year after that.

The team could technically hit him with a third consecutive franchise tag; however, it is unlikely because teams must pay much more than in those previous two years. The CBA mandates teams franchise-tagging players for the third straight year must pay the player the average of the highest five salaries at the highest-paid position (likely quarterback), which is far more unlikely than him signing an extension or joining a new team. By this time, Ronald may be in Year 2 or 3 of a high-value second contract.

Penny’s situation is more comparable to Melvin Gordon’s than Todd Gurley’s. Gurley and Gordon could have both had the fifth-year option hanging over their heads. Because of the large difference in what they would have been owed — $9.63 million and $5.6 million, respectively — the Chargers chose to exercise their option on Gordon whereas the Rams chose to invest in their standout performer long term. Penny could find his services being rewarded similarly to how Gordon is being compensated, the same way Ronald stands to make millions more than Penny in a shorter time span because he has the freedom of being an early-second-round pick rather than a late-first-rounder.