What does the fifth-year option mean in NFL rookie contracts?

When it comes to NFL contracts, owners have figured out myriad ways to bake in any ounce of controlled costs as they can while negotiating with the player's union to keep them happy enough to keep playing. One important element of contracts created for the benefit of owners in recent years has been the introduction of the fifth-year option.

What is the fifth-year option?

The fifth-year option in NFL rookie contracts is a provision specifically designed for first-round draft choices. When a team selects a player in the first round of an NFL Draft, they enter into a standard slotted agreement—a four-year rookie contract—with the added feature of a team option for a fifth year.

This fifth-year option allows the team to retain the player's services for an additional season under predetermined terms, usually based on the average salaries of the top players at the player's position.

When was the fifth-year option first introduced?

It was part of the NFL's collective bargaining agreement in 2011 that came after an offseason work stoppage of 18 weeks. That round of negotiations included the setting of a rookie wage scale and, with it, came the fifth-round option for first-round prospects.

When is a fifth-year option exercised?

The decision to exercise the fifth-year option must be made before the player's fourth season.

Why is a fifth-round option important?

The option provides teams with an extended evaluation period to assess a player's performance before committing to a long-term contract extension. Every NFL team has three full seasons with which to evaluate a former first-round choice to see if they want to keep him around for an extra year of controlled costs.

The fifth-year option is also valuable for teams seeking to manage their salary cap effectively—given the cost-controlled angle. While the player receives a considerable raise on the option, it's still less than the market rate and is essentially a one-year deal—far from the multi-year security that most players hitting free agency would love to see.

What about an injury before the fifth-year option?

Once the team exercises the fifth-year option, the player's salary for that year becomes guaranteed for injury only. This means that if the player is injured and unable to perform, they are still entitled to receive their salary for that fifth year. The fifth-year option has become a crucial factor in the negotiation and strategic planning processes for both teams and players in the dynamic landscape of the NFL. It serves as a tool for teams to make informed decisions about their roster and salary cap while giving players an opportunity to prove their long-term value to the franchise.

What are some examples for the Chiefs here?

In recent seasons, most teams have had more chances to exercise a fifth-year option than the Chiefs. That's because the team has used so few of their own first-round picks after trading for Patrick Mahomes, Frank Clark, or Orlando Brown Jr.

The Chiefs never exercised a fifth-year option on Clyde Edwards-Helaire, which is why the running back is a free agent this spring instead of a returning player. Next year at this time, the Chiefs will have the chance to pick up options on both cornerback Trent McDuffie and pass rusher George Karlaftis. At this point, both seem like locks although it's possible a long-term deal with one or the other could be reached in advance.