McDermott was quoted saying “the next couple weeks will be big for that [discussion]. The deadline to decide on the fifth-year option, which will cost $13.258 million in 2018 is May 2.
Under the new CBA, all first-round picks sign four-year contracts, and they cannot negotiate for a new deal until the end of their third season. Teams have an option to extend that rookie deal to a fifth year. If the option is exercised by the team, it begins as guaranteed for injury only and becomes fully guaranteed on the first day of the following league year, which makes sense, because that’s the start of the one-year, fifth-year option portion of the player’s rookie contract.
Why would Watkins’ account for $13.258M in 2018 if Buffalo picks up his option?
Well, here’s Joel Corry of CBS Sports to answer that question:
“There's a difference in option-year salary depending where in the first round a player is drafted. The fifth-year salary for the top 10 picks is the transition tender (average of the 10 highest salaries) for a player's position in the fourth year of his contract. With players selected outside of the top 10 (picks 11-32), the fifth-year salary is the average of the third- through 25th-highest salaries at a player's position.”
In the case of Watkins, the No. 4 overall pick in the 2014 draft, he’d fall until the “transition tender” money, which, right now, is set to be $13.258M for the receiver position in 2018.
Even though Watkins missed considerable time in 2016, there’s no doubting his immense talent and importance to Buffalo’s offense and passing game. If the Bills do pick up his fifth-year option, that doesn’t mean he has to play under the one-year, $13.258M deal in 2018. A long-term deal can still be discussed and agreed upon.
In late April of 2014, Buffalo picked up the fifth-year option for 2011 first-rounder Marcell Dareus yet struck a lucrative contract extension with the defensive tackle a few days before the start of the 2015 regular season.
The Bills used the fifth-year option on 2012 first rounder Stephon Gilmore and declined it for 2013 Round 1 selection E.J. Manuel.
Picking up the option buys a team more to negotiate a long-term deal with its star players. Watkins still isn’t 24 years old is one of the more explosive receiver in football. Expect news of this decision to come down close to the deadline.