Question

Under a salary cap system, who benefits from a lid on rookie compensation? Given this, when would you expect union leaders to agree to rookie compensation lids in collective bargaining? Is your explanation consistent with the idea that union leaders concentrate benefits on politically powerful union members and disperse the cost over the rest of the rank and file? Explain.

Answer 1

ANS.....

(*) salary cap system..............

2017National Football League (NFL) Rookie Compensation is based generally on two important factors such as League's Salary Cap and Rookie Compensation Pool. NFL's salary cap is based on terms negotiated in the year 2011 under collective bargaining agreement which roughly is expected to be in the year 2017 around $167 million thus an increase of 7% over 2016.

(*) benefits from a lid on rookie compensation........................

Whereas Rookie Compensation Pool puts limitations on the total amount team can spend on a rookie's first year salary and the total four year contract. This season's salary cap has indeed been raised by more than $11 million over last year's however the actual signing bonuses for rookies are anticipated to approximately remain the same.

==> In principle between players and owners a new collective bargaining agreement was affirmed and agreed upon whereby it comprised an increase in value of rookie-scale contracts, minimum salaries and exceptions with 45 percent boost in minimum salaries across the board in first year of the new agreement.

==> However the rookie deals would be in proportionate to a rise or fall in players salary cap. Thus under new terms and conditions next season the average salary per player is anticipated to be around $ 8.5 million and an increase to $10 million by 2020-21.

==> Furthermore players and their families would be provided with adequate education, training and counseling whereas players facing accusation and assertions would be subject to a fresh investigation, discipline and appeal process.

==> Another important issue that was addressed in these negotiations was a deal where the league would help fund programs to assist retired players with medical expenses. NBA officials and players due to new television deals and increase in TV ratings there had been an enormous boost in league's earnings and salaries thus articulated their confidence in success of their programs.