Wednesday, June 27, 2007

Criticism of Steelers' Rookie Contracts Unjustified

The Steelers have been criticized recently for failing to sign second-day draft choices to four-year contracts, as opposed to the three-year agreements the team apparently prefers. To date, Pittsburgh has signed three of its Day 2 draft picks—P Daniel Sepulveda (fourth round), DL Ryan McBean (fourth round) and OG Cameron Stephenson (fifth round)—and all received three-year contracts. Meanwhile, the current trend among NFL teams is to ink middle-round picks to four-year deals, which ostensibly prevents those players from reaching free agency for an additional year.

Yet, there's a strong case to be made that three-year contracts (still) make a lot more sense. First, if the player doesn't pan out the team is out from under the contract in three years instead of four. Second, a three-year contract presumably warrants a smaller signing bonus (guaranteed money) than a four-year deal. Finally, a three-year contract puts the team and player at a negotiating crossroads after just three seasons, at which point: a long-term extension can be worked out; the team can make a tender offer (and either retain the player for another year or receive compensation for losing that player via restricted free agency); or simply allow the player to become an unrestricted free agent. At this point, both parties have an incentive to work out a long-term extension, and oftentimes that is exactly what happens.

From a team's perspective, four-year rookie contracts would seem to be the worst possible option, because the player has little incentive to come to the bargaining table before testing unrestricted free agency. In 1993 the Steelers drafted LB Chad Brown in the second round (#44 overall) and signed him to a four-year contract; after his contract expired he signed with Seattle. In 2001 the Steelers selected LB Kendrell Bell in round two (#39 overall); after four seasons Bell left for Kansas City. And in 2002 Pittsburgh drafted WR Antwaan Randle El in the second round (#62 overall) ; when his four-year contract expired, Mr. Randle El went to Washington.

In case you're wondering, the Steelers' 2004 second rounder (CB Ricardo Colclough) also has a four-year contract, which is set to expire after the 2007 season. However, it seems doubtful that Pittsburgh will retain Colclough beyond 2007, and it's very possible he will be cut in training camp. Generally, it only takes three years for a team to know about a player—another good reason to offer three-year deals.

In my estimation the ideal contract duration for NFL rookies is as follows:
First round: Five or six years.
Second round: Three years.
Third round: Three years.
Fourth round: Three years.
Fifth round: Three years.
Sixth round: Three years.
Seventh round: Three years.
Undrafted free agent: Two years.


Blogger JJ said...

Interesting points. I disagree with them and posted a rebuttal, but I'm glad you posted so that we can have a good discussion on the pros and cons of four-year deals.

9:04 PM  

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