This week, the New York Giants announced the official signing of the No. 2 overall pick, Saquon Barkley, to a four-year, $31.2 million, fully guaranteed contract.
Following the announcement, I immediately perused social media to see what New York Giants fans and other football enthusiasts were saying.
Good ol’ Twitter. Not every reaction to Barkley’s deal was unfavorable. Most fans don’t care about the price tag and are more concerned about seeing the 21-year-old on the field as soon as possible. Here’s a sampling of some of the reactions:
“The man has never played an NFL snap.”
“Le’Veon Bell is going to be p***ed!”
“All that money and they can’t give Odell Beckham Jr. a contract extension?”
For fans who care about financials and want a better understanding of how rookie contracts work, the Saquon Barkley pact provides a great opportunity for a crash course of the current Collective Bargaining Agreement (CBA).
CBA Rookie Wage Scale
Before we dive into the actual Barkley contract and figures, though, we should tackle key terminology.
The 2011 CBA uses two calculations that mandate the exact amount of money the league spends on rookie players each season. The first is called the “Total Rookie Compensation Pool,” which dictates how much each rookie (drafted or undrafted) can make over the course of their first contract.
The second calculation is called a “Year One Rookie Compensation” total, which is the league-wide set salary a rookie can earn in his first season. From there, and depending on the round and selection spot a player is picked, contract numbers are determined.
These calculations are directly tied to a percentage of the increase or decrease of the league’s total salary cap number each season. Theoretically, this year’s rookie class could make more than the 2019 class, if league annual revenue declines upon conclusion of the 2018 season.
From there, when the league has all of its pool figures laid out, it then can determine something called a “slotted salary” (a.k.a. “Year One Formula Allotment” for those who want to get technical).
Each round and selection has a slotted, predetermined salary figure. Round 1, Pick 1 receives the highest total contract, Round 1, Pick 2 receives the second highest, etc.
One of the reasons why the “Rookie Wage Scale” follows this formula is to avoid prior CBA loopholes and discrepancies when rookies—taking into consideration their positional value and other factors—could negotiate ridiculously high contracts and consequently hold out if not rewarded.
As a benchmark and effort to restrict owners from having too much power, the NFLPA protects rookie’s rights with minimum salary limits. For 2018, both drafted and undrafted players will earn at least $480,000 in Year 1, $555,000 in Year 2, $630,000 in Year 3 and $705,000 in Year 4, per Forbes contributor, Jason Belzer.
Analyzing Barkley’s Deal
It’s really simple to understand the total of a player’s contract by knowing the minimum base salary a rookie can earn in 2018 ($480K) combined with the player’s first-year, slotted cap charge (found through Over the Cap’s convenient “Draft” tab).
For Barkley, his first-year slotted allotment as the No. 2-overall pick was set at $5,671,773. Some analysts have rounded the dollar amount of Barkley’s total contract value to an even $31.2 million total over four years. Here are the actual numbers, per OvertheCap.com.
We’ll focus on two key columns in this diagram above, “cap number” and “base salary” to help understand how Barkley’s $31,194,750 total divides per season.
According to the CBA, the league implements a “25 percent rule” where a player’s cap number each season cannot exceed 25 percent of his first-year cap charge total. This rule is special to players selected in Rounds 1 and 2 because they almost always get the max annual salary increase. Third-rounders usually receive less than the maximum annual raise while players selected in the fourth round and below receive minimum salaries each season.
For the New York Giants, the No. 2 pick, no matter who or what position the athlete played, was always set to account for a $5,671,773 cap number in Year 1. Break out the calculators because we’ll need to do some, dare I say **gulp**, math by taking 25 percent of that Year One Allotment total to find out what the max cap number would be for Years 2-4.
"Year 2 cap number: $5,671,773 X 0.25 = $1,417,943 (we will spare the 25 cents in the equation). $5,671,773 + $1,417,943 =$7,089,716.Year 3 cap number: $7,089,716 (Year 2 cap number) + $1,417,943 (our initial 25 percent of Year 1’s cap number) = $8,507,659. Voila!"
Aren’t math and sports just so much fun together? That’s a rhetorical question by the way; I can hear your sighs from here. With the cap number set each year and Bakley’s minimum base salary floor established, we can subtract both numbers for Year 1 to discover where that signing bonus was going to fall before it was even announced.
"Year 1 cap number ($5,671,773) – Year 1 minimum base salary ($480,000) = $5,191,773 (Boom! There’s your prorated portion of the total signing bonus!)"
Now, because this is a four-year deal—not counting the potential for a fifth-year option because that takes on a whole different calculation—you can multiply that prorated portion total we just got by the full length of the contract.
A quick note: Full signing bonuses can only be divided evenly to a maximum of five years, per the CBA. Since Barkley’s contract length is four-years, this is no problem.
"$5,191,773 X 4 (length of Barkley’s contract) = $20,767,092 total signing bonus."
And there you have it, folks.
In reality, because of the CBA rules and regulations, most of the numbers above were predetermined, and the New York Giants committed to the total of Barkley’s contract the minute they called his name the night of April 26.
Negotiating Points and Conclusion
With all the financial aspects nearly etched in stone, why did it take so long for the New York Giants to sign him?
Barkley’s agent, Kim Miale, did an excellent job with the nitty-gritty details not often talked about in the media, which makes this contract stand out. She aced the few negotiating points in which she had control over for her client, specifically, the timing of payments.
First, the New York Giants had to pay a whopping $15 million of Barkley’s signing bonus upfront once his pen touched paper.
If you ever wanted to see what a $15 million photo looked like, well, there ya go!
The remainder of Barkley’s bonus will be paid out this October, which isn’t too delayed. Also, Miale secured hefty roster bonuses for her client through years 2019-21 instead of the leftover monies getting distributed back into his base salary.
That’s important because there is a difference in when teams issue roster bonus payments and base salary payments. Roster bonuses are usually paid out in one lump sum prior to the start of the regular season between March (the earliest) and August (typically the latest).
Teams normally divide total base salary amounts into 17 installments paid throughout the season (Weeks 1-17), however, agents and teams can get creative with pay periods also.
Barkley’s deal is an example of a player-friendly contract based on the timing-of-payments principle alone.
There is plenty of more information on this front that cannot possibly fit into one article, but for the G-Men’s sake, it’s obvious they have gone all-in on a guy who is expected to be the centerpiece of this offense right away.
Considering all of the offseason hype Barkley has accumulated, combined with the math and numbers provided by our good friend, the NFL Collective Bargaining Agreement, chances are you already knew how valuable he is.