footballeconomics

The NFL’s Shocking Income Inequality

Horribly unfair contracts for the college stars who will be drafted this weekend ensure that 50 percent of the revenue set aside for players ends up in the pockets of just 12 percent of them

The NFL is America in a microcosm: a vicious protection racket obscured by layers of phony patriotism and conspicuous consumption that props up some rich families, their best managers and a few of their most indispensable employees. And just like the U.S., with its high-profile military recruiting drives and annual college graduations, the league replenishes its supply of working bodies with an annual harvest of fresh talent, a meat market officially known as the NFL Draft. There, a handful of fresh-faced freak athletes — Nick Bosa, Dwayne Haskins, Kyler Murray and Combine legend D.K. Metcalf — will be handed lottery tickets and a bunch of other solid players who have devoted their lives to the sport will be happy to get selected at all. And in the end, all of these winning players will wind up big-time losers, because the league’s only true winners are its billionaire owners.

Zack Moore, an NFL contract analyst and former college football player himself, knows the lopsided score. He literally wrote the book on winning football games in the salary cap era, a process that currently involves building a top-heavy roster, with money concentrated in one or two legendary veterans — usually ancient quarterbacks protected by the league’s increasingly generous rule-based passer protections — supported by a bunch of talented young players on favorable rookie deals. “Only a small percentage of NFL players actually make the big money,” he says. “And it’s a very young league, with the deck stacked against rookies lasting very long.”

For both the beaming athletic marvels on the first day of the draft and the “happy to be here” ex-college stars on Day Two, the long-term prospects are grim. And Moore wants fans, who might have other reasons to criticize the league, to be aware of this. “Just as an example, there were 463 players in their first year in the NFL in 2017, but only 290 in year four, which would have been the last year of their rookie contracts. A huge chunk of these players don’t even make it through their deals.”

And it will get much, much worse for them as time passes, since more reps on the playing field means more opportunities to be hurt. “In 2017, only 334 of 2,228 rostered players in an injury rate analysis I did were in year eight or higher,” Moore says. “That means just 14.6 percent of the NFL is made up of players past year seven.”

For fans, where this matters is in how it impacts the professional decisions of skill position players like wide receivers and running backs, athletes whose hamstrings, tendons and ligaments tend to betray them early in their careers. “Take Le’Veon Bell’s story [Bell sat on the sidelines for the entire 2018 season because the Pittsburgh Steelers refused to give him a multi-year contract]. No veteran running backs get truly sizable multi-year contracts. And the Steelers worked the current collective bargaining agreement to control his wages through six NFL seasons. It’s ridiculous.”

Here in Pittsburgh, where I live, Bell’s decision not to play this last seasonwas met with a great deal of derision. Thousands of aggrieved fans took to social media, characterizing the star running back — who had already suffered some major injuries and given the best years of his life to the Steelers — as a greedy, selfish millionaire. Rare was the voice of reason chiming in to note that running backs, because of punishing workloads that often exceed 300 touches a year, rarely perform well after age 29. Bell is 27, only two years younger than all-time great LaDanian Tomlinson was when he last rushed for 1,000 yards. For him, the end is near.

“For Bell [who signed a $52 million contract this offseason to play for the New York Jets, with $25 million guaranteed], sitting out cost him the five years and $75 million the Steelers had originally offered him,” Moore says. “Bell serves as a symbol of — for lack of a better word because players like him are wealthy individuals — economic oppression of the league against its employees. He made the wrong financial decision, but he never had a position to set the market value for his position in the first place because the Steelers controlled his rights. He had to take or leave what the Steelers offered, or sit out a year.”

Giants fans, who similarly thrilled to the spectacular early-career performances of Odell Beckham Jr., could only watch from the sidelines as the team signed him to a contract extension, then dumped him on the Cleveland Browns after agreeing to absorb part of his salary. “Why would Odell Beckham have accepted the $18 million per year contract extension he signed last year with the Giants instead of waiting for free agency and pushing for the $22 million or so he might command on the open market? The answer has to do with the way contracts for first-round draft picks work,” Moore says.

You see, even going early in the draft is no guarantee that you’ll earn out your true value. “With a first-round pick, the league owns the first five years of a star rookie’s career as a result of the four-year rookie contract they sign, plus the fifth-year team option the player’s team can exercise. Then the team can ‘double tag’ the player, twice paying them a high but single-year ‘franchise player’ rate, thus ensuring the player doesn’t hit free agency until after their seventh season. Again, going back to that injury analysis I did, only 481 NFL players are in year seven or higher, 21 percent of the league.”

The result of all this, Moore notes, should be obvious enough to anyone who follows the league. Contending teams hope to land a stud defensive end or running back on a relatively affordable rookie contract, then invest the remaining chunk of their salary cap in a multi-year deal with loads of guaranteed money for a star quarterback like Matt Ryan ($100 million guaranteed), or if they’re less lucky, an above-average quarterback like Kirk Cousins ($84 million guaranteed). “Like I discussed at length in my book, having a system of low, undervalued compensation for big chunks of NFL rosters has allowed teams to compete for championships with high-cost, first-tier players paired with rookie contract players. For example, out of the $5 billion in salaries the NFL paid in 2017, 17 percent of the total went to just 50 players and 50 percent of it went to 150 players, from a pool of 1,700 or so players on active rosters.”

“These players don’t even get paid their fair market value in college,” Moore continues. “Cork Gaines at Business Insider published a story in which he found that University of Texas football players are worth about $670,000 each to that school, which is more than what every single player drafted after the start of the fourth round earns as a salary in their first year in the NFL. In fact, every player drafted in the fourth round and later doesn’t make a million in salary in any year during their rookie contract, although their signing bonus helps some exceed $1 million in their first year.”

In other words, players — particularly players who lose larger amounts of their larger-than-national-average salaries in markets with high state and local taxes — end up woefully underpaid by year four of their careers, should they even make it to that fourth year. Meanwhile, a bright star working on a one-year “franchise tag” who generates 16 games’ worth of SportsCenter highlights but suffers some disgusting, Bo Jackson-esque injury in his last play of the year could vanish from the national sporting scene with nary a peep.

So what can be done?

“The goal of the next collective bargaining agreement the players sign with the league must be to shorten rookie contracts to three years, allow for players to negotiate extensions after year two and get rid of the team’s ability to apply the ‘franchise player’ tag to players for two consecutive seasons,” Moore says.

The way to secure these changes, Moore believes, comes down to proper framing of the argument on the part of the NFL Players Association. “The NFLPA has to explain that there’s no true free agency as a result of this process,” he says. “This economic status quo is the reason why only the quarterback market is running up the top of the market rates. It’s because someone like Kirk Cousins can safely wait out two franchise tags and still be in his prime, while players in other positions, especially running backs, can’t.”

And so, for the most part, this weekend’s NFL Draft is less like cashing in a winning lotto number and more like buying a couple of scratch tickets, which almost certainly are going to end up paying out way less than their upside.