Every player selected in the first round of the NFL Draft will automatically have a Fifth-Year Option added in his contract. This option cannot be separately attached to the player contract.
The option allows a team to retain a player’s rights for five years rather than the standard four, which is the bonus of selecting a player in the first round. In order to extend the contract, the team must inform the player during the period between the last regular season game of his third contract year and May 3 of the next League Year (Art. 7, Sec. 7, (a), 31).
The Fifth-Year Option is non-negotiable, and the non-compensation terms from a player’s rookie contract will be transferred to the fifth year.
Many terms allowed in other contracts are prohibited from being added into the Fifth-Year Option. These terms include Option Bonuses, Option Exercise Fees, option Non-Exercise fees, Option Buyouts, or any other compensation that stems from the team exercising or declining the Fifth-year option (Sec. 7 (d), 31).
When a team exercises the option, it becomes guaranteed for injury only. If the player is on the team’s opening-day Active/Inactive roster of the option year, his salary becomes fully guaranteed for skill, cap and injury.
The payments are not considered Rookie Salary and do not count toward league or club rookie pools or allocations. The player’s option-year salary is also not subject to the 25% Rule.
The salary of the option year is also the only payment a player is eligible to receive for football services outside of minimum offseason workout per diems and compensation for non-football related team activities.
The salary for the Fifth-Year Option is also different for two types of players: those selected in the top-ten picks and all other first-round selections.
The option for top-ten picks is set at an amount equal to the salary of the Transition Tender (set in Article 10, Section 4 of the CBA) for the player’s fourth contract year. This salary is calculated, to put it simply, by finding the average of the top ten highest Prior Year Salaries for players at the same position. Positions are defined by where a player spent the most plays during the previous season (Sec. 7, (a), 31), unless you ask Jimmy Graham.
For players selected between 11th and 32nd in the draft, the same calculation is used to compute their salaries. The difference lies in what is averaged; rather than the top ten, the 3-2Fifth highest Prior Year Salaries for the player’s position will be used.
If a team decides to use its option, the player can face substantial fines for refusing to report to camp on time and/or at all. Players can be fined up to $30,000 per day of training camp missed and a fine equal to one week’s regular season (1/17 of P5 Salary) check for any preseason games missed.
The Fifth-Year Option is intended provide teams with more security when it invests a valuable first-round pick on a player.