According to Aaron Wilson of the Baltimore Sun, the Ravens have been assigned the following “rookie cap” amount:
This is an oft misunderstood number, because while it is part of the team’s Salary Cap, it does not have a dollar-for-dollar impact on the team’s overall Salary Cap.
The Rookie Salary Cap is often referred to as “a cap within a cap” because it limits the amount that teams can allocate to their rookies in the year they were drafted (and over the life of the rookies’ contracts). But, beyond that, there is a lot of confusion about the Rookie Salary Cap and exactly how it works.
The Rookie Cap is not a separate, distinct pool, but rather, a separate calculation and there is not a dollar-for-dollar correlation between the Rookie Cap and the overall Cap. So, while all of the Salary Cap numbers of a team’s draft picks must fit under the team’s Rookie Salary Cap, very rarely will all of that amount actually impact the team’s overall Salary Cap.
The reason for these misconceptions revolves around the Rule of 51, which is contained in Article 13 of the NFL’s Collective Bargaining Agreement. The Rule of 51 dictates that, from the beginning of the league year in early March until the beginning of the season, only the top 51 Salary Cap numbers and all of the pro-rata shares of bonus money for the players outside of the top 51 count toward the team’s overall Cap. All “dead money,” i.e. amounts that count against the Salary Cap for players who are no longer on the roster, counts as well.
[Related: Rule of 51 Explanation]
Said a simpler way, during this period of the offseason, a team’s Rule of 51 Salary Cap number can be calculated by removing the base salaries of all players who do not fall amongst the top 51 Cap numbers.
This rule is necessary because, during the offseason, team rosters can number up to 90 players. As such, it would be impossible for teams to fit all of those players under the Cap. So, to counter this problem, the NFL has instituted the Rule of 51.
OK, so what does this have to do with how the Rookie Cap works?
First, as way of further explanation, under the CBA of 2011, all draft picks receive 4-year contracts, generally with a signing bonus and often with minimum base salaries set for each year of the deal. While 1st and 2nd round picks may have base salaries of more than the minimum in years two through four of their deals, even those players will almost always receive the rookie minimum base salary during their first year. For 2015, the minimum base salary for a rookie is $435K. For Salary Cap purposes, the bonus received by the player is prorated over the four years of the deal and that prorated amount is added to the base salary to create the player’s Cap number.
So, because of the low base salary and the small signing bonuses that many of the lower round draft picks receive, those draft picks will most likely not be amongst the top 51 Cap numbers on the team (assuming the team has at least 51 players signed or tendered). As such, under the Rule of 51, those players’ base salaries of $435K will not count against the team’s overall Salary Cap and only the player’s bonus proration will count toward the team’s overall Cap.
So, how will this affect the Ravens in 2015?
As we know, the Ravens had nine (9) draft picks in last week’s draft and their Rookie Cap should be approximately $5,957,648.
With the new CBA’s rookie wage scale, the compensation for draft picks is now basically slotted, with 2015 being the first year that the Rookie Cap has seen a significant increase. This was due to the NFL and NFLPA agreeing to toll any increases in 2012-2014 in order to increase the 2012 Salary Cap. Essentially, the agreement was to freeze the increases in the rookie cap for 2012-2014 and increase the 2012 Cap by that amount because the Cap in 2012 was actually going to decrease (which the NFLPA clearly did not want).
So now, in 2015, the money borrowed has essentially been repaid and the Rookie Cap gets its first major boost.
The 2015 Cap numbers for the Ravens’ nine (9) draft pick will be as follows (because the increase is new this year, these numbers are approximates, but should be pretty close):
Presently, the Ravens’ bottom 5 Rule of 51 Cap numbers are:
47: $585,000 ($585K base salary + no bonus proration)
48: $585,000 ($585K base salary + no bonus proration)
49: $546,140 ($510K + 36,140 bonus proration)
50: $526,875 ($510K + 16,875 bonus proration)
51: $513,000 ($510K + 3,000 bonus proration)
Again, the team will need to fit all nine of the draft picks into its $5.957M Rookie Cap, but will not need $5.957M in overall Cap space to accommodate the signing of its draft picks.
So, based on the above numbers, only the first three (3) picks will have Cap number of greater than $585,000, which is the team’s 48th highest Cap number. As such, only those three (3) will be part of the top 51 and, under the Rule of 51, will replace the Cap numbers of the players who are currently 49th, 50th and 51st on the team’s Cap. Only the bonus prorations for the players who are removed will remain to count against the Salary Cap.
The Cap numbers of the remaining six (6) draft picks will fall outside of the top 51, so the base salaries of those players, while counting against the Rookie Cap, will not count against the team’s overall Salary Cap. Only the bonus prorations for those players will count against the overall Cap.
So, to calculate the exact impact of the Rookie Cap on the team’s overall Cap, the amount of the base salaries – $435K – for each of the lower six (6) draft picks ($2.610M) can be deducted from the rookie Cap of $5,957,648. Then, for the top three (3) draft picks, while their Cap numbers do count against the overall Cap (by virtue of being part of the top 51 Cap numbers), they replace the (3) players who were formerly part of the top 51, so the base salaries ($510K) of the three (3) being removed ($1.53M) will be also deducted from the team’s rookie Cap.
When those two numbers ($2.610M and $1.53M) are deducted from the team’s Rookie Cap ($5,957,648), the true impact of the signing of the team’s rookies – $1,817,648 – is revealed.
So, that is how the Year One Rookie Allocation, a.k.a Rookie Salary Cap – the “cap within a cap” – actually works and demonstrates the actual impact of the Rookie Cap on the team’s overall Salary Cap and how it is fair less than most realize.
OK, that’s a lot of numbers, is there a simpler way to estimate the how much Cap space a team needs to sign its draft picks (even before the contract numbers start to come in)?
Yes, as a general rule of thumb, once the NFL has announced the team’s Rookie Cap numbers, subtract the rookie minimum salary ($435K in 2015, $450K in 2016) of each of the team’s draft picks in the 5th-7th rounds and the minimum salary for 2nd year players ($510K in 2015, $525K in 2016) for each of the team’s draft picks in the 1st-3rd rounds from the team’s announced Rookie Cap number. For any 4th round picks, the amount to deduct could be either of those numbers – depending on how early (deduct the higher amount) or late (deduct the lesser amount) in the 4th round the player was drafted – so deduct whichever one fits best. By doing so, you can determine a pretty accurate estimate of the impact of the team’s draft picks on the team’s overall Salary Cap.
And, despite what some in the media may lead you to believe, that number won’t be anywhere near what the team’s Rookie Cap is reported to be.
NOTE: Pursuant to the terms of the CBA, the first year prorations of the bonuses received by UDFAs are supposed to count against the team’s Rookie Cap. For the years 2012-14, those prorations were not included, perhaps as part of the deal to increase the 2012 Salary Cap. As such, it remains to be seen whether they will count against the 2015 Rookie Cap or if the NFL and NFLPA have decided to handle those separately. If they are included this year, the team’s Rookie Cap would likely be increased by $28,985 (which is 1/3 – the yearly proration – of the league-wide maximum for UDFA bonuses of $86,957).
