Top NFL Draft Pick Player Contracts: Too Much Money?

If you’re a football fan, you know that the NFL Draft is happening today, where teams take turns picking the best players among recent college football athletes.  In recent years, guaranteed signing bonus money has spiraled out of control, with over $40 million dollars being guaranteed to this year’s top pick, Matthew Stafford of Georgia.

Many teams are complaining, and want the NFL players’ union to agree to limit compensation to draft picks.  The new union director, DeMaurice Smith, has brushed this idea aside, noting that no one is requiring the teams to pay this much, and that limiting compensation is not the job of the union (check out the fees section of our procurement contract to see how you can limit compensation to vendors here).

I am sympathetic to Smith’s inclinations.  Why should employees have to be responsible for stopping employers from paying more?  When I used to work at a top New York law firm, starting salaries were $125,000 per year.  Extra signing bonus money was paid to former U.S. Supreme Court law clerks, usually around $25,000.   What if a bunch of major law firms banded together to demand that all associates sign a collective agreement to stop these same firms from paying bonus money to these clerks?  Setting aside the antitrust, employment, and collective bargaining law issues here, I can’t imagine law firm associates like myself showing any interest to help the firms (check out our sales contracts that control fees here).

But let’s change the hypothetical!  What if the signing bonus money, instead of being just $25,000, was substantially more?  How about $100,000?  $250,000?  $400,000?  At some point, the amount would be so great that firms would be forced to cut salaries for everyone else just to afford to pay these huge bonuses.  Suddenly, staring at a lower salary, I might be quite open to helping the firms out and signing a deal to cut law clerk bonuses down to size (see how to strategically source and cut vendor service fees here).

A similar situation appears on the football front.  Teams pay so much money to top NFL draft picks that they don’t have as much money left to pay everyone else, including their veteran, proven players who are much more important to the team.  For that reason, I think Mr. Smith needs to give this some more thought.  Who knows?  Maybe he already agrees with me and is simply playing possum to maximize negotiating leverage with the NFL.  After all, there are many other issues he wants the owners to concede on, so holding out on the draft bonus issue does nothing but help his negotiating stance.

Regardless, I think there’s one last thing to focus on here, and that one thing is . . . Go Rams!

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