The 2017 NFL Draft brings over $1 billion in new contracts, which players will sign over the course of the months after they’re selected.
The money is huge, and the cost of falling in the draft for a player can be big.
Here’s a look at some of the main financials you need to know for the NFL Draft, if and when players slip.
— Striking gold at the top
Being the top pick in the NFL Draft not only gives a player bragging rights, but it brings him massive financial gains. The top pick this year will be in line to receive a fully-guaranteed contract worth $30.4 million. That guarantee at signing immediately will be ranked 29th in the NFL and 17th among non-quarterbacks — not too shabby for someone who has never stepped foot on an NFL field.
Even if a player strikes out on his dream of being the No. 1 pick, the financial rewards are still big. The top four picks in the draft all will receive at least $27 million fully guaranteed. So while many look at the top pick as the best in the draft, the salary drop-off is not as massive as the perceived value.
MORE: Mock Draft 2017
— Missing the top five takes a toll
The NFL clearly puts an emphasis on being drafted in the top five, and falling one spot beyond can be dramatic. The difference between the fifth and sixth pick will be $3.1 million. The fall-off continues for picks seven and eight with a loss of $2.5 million for each drop.
While dropping from No. 1 to No. 4 would cost a player $3.25 million, the drop from No. 5 to No. 8 would cost the player a whopping $8.1 million. The drop from No. 8 to No. 9 is slightly more than $100,000, so there is virtually no difference between those picks.
The bottom line: If a player is in contention to be a top five pick, he better do everything he can to make sure he lands within the top five.
— Missing the top 10 hurts, too
The other big first-round drop-off comes right outside the top 10, where a player will lose $1 million for the drop to No. 11 and another $1.5 million if he drops to No. 12.
After that, the salaries stabilize for the remainder of the round with minimal drops generally less than $200,000 per pick.
— Making the top 20 means four years of security
Agents thus far have been able to negotiate fully-guaranteed contracts for all of the top 20 picks in the draft. But after No. 20, the fourth-year guarantees begin to slide, typically with the 27th pick being the first position to get no fourth-year salary guarantee.
While most first-rounders do not get released, a few have failed to collect that fourth-year salary because of the lack of a guarantee.
— A massive drop between Rounds 1 and 2
How many people believe there’s big difference between the 32nd and 33rd picks? Probably not too many, but the NFL rookie contract structure results in a 20.4 percent loss in contract value (about $1.8 million), the biggest among all draft picks.
The 33rd pick likely will get about half of his third-year salary guaranteed, compared to a full guarantee for pick No. 32. While some may argue the chance for true free agency after four years is a benefit for the 33rd pick, most teams are just as bullish on extending the 32nd pick if his play warrants it.
— Falling to Round 3 is a loss, but there’s a shining light
The drop continues from Round 2 to Round 3 with an 18.7 percent loss in value, as well as a different contract structure. Third-round picks likely will not receive any base salary guarantees, whereas second-rounders will have at least some future guaranteed salary. Third-rounders also will be the first players to accept what’s called a split salary, which means their base salaries would drop from $465,000 to $348,000 if they landed on injured reserve.
However, starting in the third round, every player is eligible to earn a salary increase in the final year of his contract to whatever the level of the RFA tender. In general, that means a potential raise of about $1.37 million. When you factor in that raise, a third-rounder has the potential to out-earn a second-round pick.
— The oddball picks in the draft
For a few selections, the order makes no difference at all. Only one of those exists among regular draft picks, with pick No. 119 and No. 120 earning the exact same signing bonus and contract.
Starting after the third round, the league awards special draft selections called compensatory picks at the end of each round. This year there are a record breaking 11 picks that will be given between Rounds 3-4, with the first being selected by the Dolphins and the last by the Jets. The smallest 11-pick differential in the third round is about $56,000, but each of these third round compensatory picks will earn identical contracts, whether the first or last compensatory selection. The same holds true in all other rounds in which comp picks are awarded.
— The UDFA debate
Once the draft is complete, a number of undrafted players will sign contracts with teams in rapid fashion. Each contract will be three years in length for the minimum salary each year, but the guarantees of those contracts vary wildly. Most receive small guarantees under $5,000, but some will receive better guarantee packages than late draft picks, with teams guaranteeing upwards of $100,000 of a player’s salary.
Going undrafted has other advantages, too. An undrafted free agent can choose his team and best situation to fit his skill set. Every UDFA is eligible for the restricted free agent process, which can mean a huge fourth-year salary.
This year, for example, Malcolm Butler will earn $3.91 million, bringing his four-year contract value to $5.44 million, which is about what the 34th pick in the draft would earn. In addition, UDFAs are eligible for contract extensions after just two seasons rather than three for a draft pick.
While making a team as an undrafted free agent can be difficult, there are financial reasons to do what La’el Collins did a few years ago and state that if he was not drafted in the top three rounds, he would not sign a contract with that team. It worked, and he landed in the perfect spot in Dallas. He likely will earn more as an undrafted player than if he were drafted in the fourth or fifth round. More talented players who slide for whatever reasons should consider the advantages of remaining undrafted.
For projected salaries of all picks in the 2017 NFL Draft and how much teams will set aside for them, head to OverTheCap.com.