THE DETERMINANTS OF NFL PLAYER SALARIES 3
amortized on a straight-line basis over the life of the contract or five seasons, whichever comes
first (NFLPA, 2011). In the case that incentives actually paid in a year exceed those that were
likely to be earned, the excess will be credited against the team’s salary cap in the subsequent
year. Within the constraints of the collective bargaining agreement, the determination of a
player’s salary may depend on a number of factors. For example, the structure of rookie
contracts changed significantly under the 2011 CBA and is quite different than veteran contracts.
Prior to 2011, rookies drafted into the NFL had the potential to sign extremely lucrative
contracts before setting foot on the playing field. During negotiations for the 2011 CBA, both
owners and veteran players wanted to limit the size of rookie contracts (Brandt et al., 2013).
Owners were motivated by major draft busts, like Ryan Leaf and JaMarcus Russell, and veteran
players were unhappy about being out earned by rookies (Brandt et al., 2013). As a result, the
pool of money allocated to rookie contracts shrunk, and rookies were forced into heavily
structured, four-year contracts with fifth-year team options for first round picks (Quinn, 2012).
Players do not have the option to restructure rookie contracts until after the third year of the
contract. Consequently, many young players receive compensation well below their value, and
the value of rookie contracts has dropped significantly since the implementation of the 2011
CBA (Brandt et al., 2013).
Veteran players may not receive the intended benefits from the rookie contract
restructuring. Teams can draft and sign rookie players for relatively lower salaries than veteran
players without the necessity to restructure contracts to reward performance above expectations
(Brandt et al., 2013). There is little incentive for teams to sign more expensive veterans with a
shorter shelf life. To players nearing the end of their careers, this may have very serious personal
financial implications. The rate of bankruptcy among players 12 years out of the league is about