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Texans Exercise J.J. Watt's Fifth-Year Option on His Rookie Contract

When the NFL players and owners agreed to a new collective bargaining agreement prior to the 2011 season, one of the most crucial elements was the implementation of a rookie wage scale.

The key benefit at the time seemed pretty simple -- the scale would stop the marquee, high draft choice rookies from getting "second contract" money on their first contracts, before they've even played a snap in the league. (Sam Bradford's guarantee of $50 million in 2010 ultimately spoiled the fun for everyone. That seemed to be the rookie contract straw that broke the owners' backs.)

There's still a pecking order with respect to salaries, with the first overall pick making the most and so on down the line, but the starting numbers are far more sensible. That is probably the primary benefit, but it's followed closely by an element that is becoming relevant for the first time this off-season -- the fifth-year option on first-round picks.

Nowhere around the league is this clause more relevant than here in Houston, and Thursday the Texans put it to use, exercising J.J. Watt's fifth-year option for 2015.

In the simplest terms, here's how the fifth-year option works:

1. Each NFL team has until May 3 to exercise the option.

2. Only first-round picks are eligible for/subject to (depending on your point of view) the fifth-year option.

3. Players drafted between number one overall and number ten overall can be extended for a fifth year at the team's option for a salary equivalent to the transition tender at their position (the average of the top ten salaries). So, for example, when the Panthers ultimately exercise this option on Cam Newton, he will make $14.67 million in 2015.

4. Players drafted between 11 and 32 in the first round receive the average of the top 25 players at their position with the top three removed from the formula. Watt was the 11th overall pick in 2011, so he just missed out on transition tender-size cake. Instead, he will be playing in 2015 for the low, low price of $6.97 million.

In theory, Watt would have been better off being a second-round pick, as 2011 rookies picked after the first round all enter unrestricted free agency this offseason. If you don't think second rounders are better off at the end of rookie deals, watch this summer as Colin Kaepernick (assuming his legal troubles blow over) inks a massive, multi-year extension while Newton sits on his one-year team option.

Needless to say, for a guy who is thought to be worthy of being the highest-paid defensive player in football, the Texans are getting a bargain with Watt in 2014 and 2015. In 2016 and 2017, Watt would be eligible for the franchise tag, so for those of you fretting over Watt someday hitting free agency, the Texans are in full control of this situation for a few more years, if they so choose.

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More likely, if past treatment of "nucleus" players is any indication, the team and Watt will come to an agreement on an extension sometime long before franchise tags become an issue, and when that time comes, the deal Mario Williams got back in 2012 from Buffalo (6 years, $96 million, $50 million guaranteed) becomes the starting point in negotiations.

In the meantime, J.J. Watt will continue to be J.J. Watt, the legend will continue to grow...

Listen to Sean Pendergast on SportsRadio 610 from 2 p.m. to 7 p.m. weekdays. Also, follow him on Twitter at http://twitter.com/SeanCablinasian.

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