Cowboys rookies James Hanna, Kyle Wilber and and Morris Claiborne contemplate whether to invest their signing bonus in treasury bonds or in pimped out rides.
The rookie pool established in the new CBA has taken all the suspense out of the the NFL rookie contracts. The contract numbers are now determined based on the number, round and position of a team's selection choices in the draft. This means that there is virtually no room for negotiation between a player's agent and the teams, as there is only a fixed amount of money available even for top tier picks. As a result, teams are signing their rookies at a record pace, as NFL spokesman Greg Aiello tweeted earlier today:
Drafted players signed thru last night: 147. Thru May of 2010? 13. May of 2009? 11. 2008? 7. 2007? 25. 2006? 2. 2005? 4.
One of the few remaining teams not to have signed any of their draft picks are the Dallas Cowboys, and that's not something that's likely to change before June.
Why June? Because that's when the Terence Newman salary cap hit comes off the books. The league assigned the Cowboys a $5.71 million rookie pool with which to sign their new rookie class, but the Cowboys currently only have a little over $2 million left in salary cap space. But is that really a problem? Far from it. Make like the Pointer Sisters and jump to find out exactly why.
Despite what you may read elsewhere, the $5.71M does not count against the current Cowboys' cap - at least not in its entirety. A specific offseason rule, the Rule Of 51, stipulates that only the 51 highest salaries on a team count against the salary cap in the offseason. To manage their salary caps, teams pay all their rookies the league minimum rookie salary of $390,000 in the first year, and stock up that amount with a signing bonus.
As a result, the rookie minimum salaries of $390,000 don’t fall under the Rule Of 51and don’t count against the salary cap. Only the amortized part of their signing bonuses count against the salary cap in 2012. For the seven Cowboys rookies, this means you have to deduct 7 x $390,000 from the $5.71M Rookie Pool and you’re left with the amortized part of the signing bonus of $2.98M. This is what will count against the Cowboys' 2012 offseason salary cap.
Unfortunately, it's still more than the cap space the Cowboys currently have left, so they'll have to wait until June 2nd, when the six million salary cap relief (from designating Terence Newman as a June 1 cut) hit the books. Of course, all of this will change once again when the rosters are trimmed to 53 players to start the season, because then every single salary will count against the cap.
In summary, starting in June, the Cowboys will have enough cap space to sign their draft picks without a glitch. But there's another aspect here that Alex Marvez of Foxsports.com raised yesterday: Unless the rookie contracts stipulate a deferred signing bonus, the league has just put millions of dollars in the hands of a couple hundred young men barely out of college with nothing on their hands but time prior to the start of training camp.
With so much spare time on their hands, rookies will face temptations and pressures that could cause the kind of spending they will later rue. Those who are particularly susceptible generally come from impoverished backgrounds. These players seek the kind of material possessions they lacked growing up, such as jewelry or a new car. Some also spend excessively on friends and family to reward them for their support leading up to NFL careers that usually don't last as long as many players think they will.
The good news here is that since the Cowboys haven't signed a single draft pick yet, none of their picks are going to rack up exorbitant jewelry bills anytime soon.
Then again, signing Dez Bryant just a couple of days before camp two years ago didn't prevent him from blowing the bulk of his signing bonus on bling and a white Bentley either.
As Marvez also writes, a 2009 Sports Illustrated study showed that 78 percent of the former players polled were either bankrupt or in financial difficulty a mere two seasons after leaving the NFL. You need to look no further than what a rookie does with his signing bonus to understand what his chances are of beating those odds.