The Fifth-Year Option

This summer, we’ve seen a handful of notable players from the 2014 NFL Draft hold out from their respective clubs. The standard rookie deal runs for four years, but first-round picks such as linebacker Khalil Mack, Rams defensive tackle Aaron Donald, and Titans tackle Taylor Lewan are under contract through the 2018 season thanks to the fifth-year option. With one year left on their deals at a pre-determined rate, they are looking to gain leverage in their extension talks.

So what exactly is the fifth-year option? Essentially, it’s a way to extend a player’s rookie contract by an extra year, at the club’s discretion. Players don’t have any say in whether or not these options are picked up, though players and teams are still free to negotiate longer-term contracts that would render the fifth-year option unnecessary. Otherwise though, the decision is in the hands of the team, and must be made by May 3 in the player’s fourth season.

Last year, 25 players (out of a possible 32) had their fifth-year options picked up for the 2018 season. As a top-10 pick, Mack’s fifth-year salary was equivalent to the transition tender at his position during his fourth season, which came out to $13.846MM.

For first-rounders picked outside the top 10, like Lewan and Donald, the calculation was a bit more complicated. Their fifth-year option was determined by the average of the third through 25th top salaries at that position. That’s why Lewan is in line for $9.34MM this season and Donald is set to earn just $6.9MM.

Fifth-year options are guaranteed for injury only between May 3 and the start of the following league year. As such, they’re not entirely risk-free, but as long as the player remains healthy, a team could exercise his fifth-year option, then cut him before his option year gets underway without being on the hook for his salary. When the league year begins, the player’s fifth-year salary becomes guaranteed for skill and cap purposes, as well as injury.

With a new CBA on the horizon, it’s conceivable that the fifth-year option will be amended to allow first-round picks to test free agency sooner. Then again, the NFLPA might not want to make the concessions needed in order to do away with the fifth-year option, even though it would help to accelerate the market at every position.

Note: This is a PFR Glossary entry. Our glossary posts explain specific rules relating to free agency, trades, or other aspects of the NFL’s Collective Bargaining Agreement. This post was modified from an early entry by editor emeritus Luke Adams. 

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