So, how then does the Rookie Cap actually work?
First, as way of explanation, under the CBA of 2011, all rookies receive 4-year contracts, generally with a signing bonus and often with minimum base salaries set for each year of the deal. While 1st and 2nd round picks may have base salaries of more than the minimum in years 2 through 4 of their deals, even those players will almost always receive the rookie minimum base salary during their first year. For 2012, the minimum base salary for a rookie is $390K. For Salary Cap purposes, the bonus received by the player is prorated over the 4 years of the deal and that prorated amount is added to the base salary to create the player’s Cap number.
By way of example, in 2011, let’s assume that a Team X had a rookie pool of $4.578M for their 8 draft picks. This is the team’s “rookie salary pool” and is based on the number of the team’s draft picks and where those picks were drafted.
However this doesn’t mean that Team X needed $4.578M in Cap space in order to fit their rookies under the overall Salary Cap.
Once again this is where the Rookie Cap and the Rule of 51 become intertwined – and where most of the misunderstanding regarding the Rookie Cap comes from. Since each of the 2011 draft picks had a base salary of only the 2011 rookie minimum of $375K (which is the lowest possible base salary for any player), none of the draft picks’ base salaries will actually count against the team’s overall Salary Cap under the Rule of 51 guidelines.
As such, it is only the amortized portions of the draft picks’ signing bonuses that counted against the team’s overall Salary Cap.
So, to calculate the actual impact of Team X’s 2011 draft picks on their overall Salary Cap, the Rookie Cap of $4.578M is reduced by $3M ($375K x 8), leaving an amount of only $1.578M in overall Cap space needed to accommodate the signing of rookies within the Rule of 51.
So, that is how the Year One Rookie Allocation, a.k.a Rookie Salary Cap – the “cap within a cap” – actually works and demonstrates the actual impact of the Rookie Cap on the team’s overall Salary Cap.
Once the season starts, however, the entire Cap Numbers of the rookies who make the team must be fit under the team’s overall Cap. The impact of that, though, actually operates to save the team a little bit of Salary Cap space, since the rookies are making the rookie minimum base salary and replacing players on the roster who were making more in base salary.
Denver has 6 picks so using this Denver will need to set aside 1,489,615 million dollars for the rookie class.
Last edited by DBroncos4life; 02-20-2013 at 03:50 PM..