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Salary cap projected to not grow much through 2015


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#1 Greg Russell

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Posted 31 March 2012 - 12:34 AM

I made a thread months ago about the new TV deal and how it might impact the cap. It sounds like the early predictions were way off because of events that have transpired lately. The players received larger benefits in 2011 than in the past, and the result was going to be a reduced cap this year. The players are borrowing against those future revenues to keep the cap from dropping in the short term. According to the league, taking that into account is leading to projections of a stagnant cap through 2015.

This could have some huge implications as some teams really count on future years growing in cap space. The Cowboys and Redskins come immediately to mind as teams who often spend high cash over cap - paying signing bonus money now to buy a player but that cash hitting the cap in future years where the growth of the cap is keeping them afloat. That is apart from the whole punishment issue.

The Texans are an example of what we may see more of the next few years. Houston had to make a lot of tough choices as they have even more key players (Schaub, Duane Brown) coming up for new contracts soon too. I was advocating loading contracts towards 2014 when I thought the new money would show up in the cap. If it won't be there, the kind of moves they have made make a lot more sense.

http://m.espn.go.com...storyId=7744901

Perhaps the biggest surprise of the 2012 NFL owners meetings is the salary-cap projections.

Starting with the 2014 season, revenues are expected to rise significantly because of increased television dollars and the overall strength of the game. What won't rise much is the salary cap.

After having flat caps of $120.375 million in 2011 and $120.6 million in 2012, the NFL management council told clubs Tuesday that the cap won't increase much in the next three years. In fact, the 2015 cap may go up to only $122 million, according to management council projections.

Although the cap numbers for 2013, 2014 and 2015 still can be negotiated, projections point to very little increase. The cap may rise by only $300,000 in 2013, going to around $120.9 million. Even though increased network television money is coming in 2014, the cap is projected to go only into the $121-plus million range.

If that sounds amazing, consider this: The salary cap in 2009 was $123 million, higher than what is projected to be in 2015.

Where did all the salary-cap money go?

The answer resides in what has happened during the first two seasons of the new collective bargaining agreement. When the management council and the NFL Players Association ran the numbers from the percentage of money going to the players, the salary cap in 2011 was supposed to be less than $120 million. It could have been as low as around $116 million.

To put more salary money into free agency last season, the union was able to shift some of the benefit money into salary money. The result was a $120.375 million cap in 2011.


According to sources, the salary cap was supposed to be around $113.5 million this year. With 427 free agents, a huge cap decrease would have depressed the market and given almost too much contract leverage to teams. The union worked out a deal with the owners to trade off $7.1 million in benefit dollars per team from future years to have a $120.6 million salary cap.

What made things even more palatable for free agents was that approximately $283 million of unused cap dollars from 2011 was selectively rolled over into this year's cap. It's a plus for the players if teams roll over unused cap dollars into the next year, but eventually the flat caps would eat up the annual excess.

Already, it's causing teams to make tough decisions.

Look at the Houston Texans. Coming off their first playoff season, the Texans opted not to re-sign defensive end Mario Williams, cut right tackle Eric Winston and traded linebacker DeMeco Ryans. Instead, they chose to give long-term deals to running back Arian Foster and center Chris Myers.

"I think it's the NFL today; you've got to scout and make good decisions in terms of your contracts,'' Texans general manager Rick Smith said. "You can't afford to make mistakes. Anymore, you got to make sure you can evaluate the guys who fit your system and then go sign those guys. I think as you manage your cap and you manage your team, you got to figure who your core group of players are and keep those guys.''

Smith admits it's a challenge. Losing Williams, Winston and Ryans was tough.

"If we continue to draft well and develop our players that way, we are not going to be able to keep all our players,'' Smith said. "That's just a function of the system. You got to have confidence in the system. You have to have confidence to select the players that fit that you can continue to coach them up and develop them."

Smith came to meetings expecting a flat cap. So did Falcons general manager Thomas Dimitroff.

"We are mindful of where the cap was going,'' Dimitroff said. "You have to plan ahead and be mindful that the cap could be flat. You just have to be creative in how you do deals.''

The Falcons made the tough choice of saying goodbye to middle linebacker Curtis Lofton for that reason. Lofton was hoping to get the $8-9 million-a-year deal given to the top inside linebackers in the league. Lofton was a leader of the defense, but he wasn't necessarily a linebacker who is great in coverages on passing downs.

Knowing the future impact of flat caps, the Falcons placed a financial limit to what they would offer Lofton. He opted to sign with the New Orleans Saints. They said goodbye to a former second-round pick who was labeled a success.

The Falcons also have to incorporate signing quarterback Matt Ryan to a contract extension. In a flat cap, there is only so much room for big-ticket contracts.

Players are still hoping for big salary-cap increases in 2014 and 2015, but the numbers aren't going in that direction. A flat cap means tougher negotiations for long-term deals.


"When I was young I thought that money was the most important thing in life; now that I am old I know that it is." - Oscar Wilde

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#2 GroveDiesel

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Posted 31 March 2012 - 05:14 AM

That seems hard to believe when the tv deals are increasing revenue by something like 50%. Are the benefit payments really going to be that large as to eat up ALL that money? Something just doesn't seem right. If this ends up being the case, there are going to be a LOT of angry players and it could get really ugly when this CBA is up.
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#3 OrangeCurtain

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Posted 31 March 2012 - 07:13 AM

I remember some pretty well respected guys saying that the owners held all the cards in this negotiation and that the longer the players held out the worse it was going to get for them. Looks like that was true and the owners squeezed pretty hard. I agree that the next negotiation could get ugly as a result of this emerging disparity. But if the reason the cap isn't growing is because of more money being put aside for post-NFL career benefits and things like that, then I think the reaction will be more muted. I haven't looked into it enough to see if that's what they mean by benefit money, or if the benefits they're talking about are during career benefits.

#4 Greg Russell

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Posted 31 March 2012 - 08:17 AM

That seems hard to believe when the tv deals are increasing revenue by something like 50%. Are the benefit payments really going to be that large as to eat up ALL that money? Something just doesn't seem right. If this ends up being the case, there are going to be a LOT of angry players and it could get really ugly when this CBA is up.

I agree that the amounts seem out of whack. We heard maybe 40 to 50 percent as I recall. Let's say they take $7m from 2014 plus have another $7m-$10m in benefits for that year per team. $17m would be less than 15%. Where is the rest?

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#5 Greg Russell

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Posted 02 April 2012 - 11:00 AM

More info from a PFT article, including actual amounts for benefits:

http://profootballta...ks-pretty-good/

“Worst deal in the history of sports” suddenly looks pretty good
Posted by Mike Florio on April 2, 2012, 1:38 PM EDT
ZDPI Getty Images

The past three weeks have entailed plenty of talk about the salary cap as calculated in the new CBA, and whether and to what extent those numbers will spike when the new TV contracts kick in.

The NFLPA reportedly has told players it will. Patriots owner Robert Kraft has said that it won’t.

Now, Texans owner Bob McNair, who chairs the league’s finance committee, agrees with Kraft.

“It is staying pretty flat for several years,” McNair told Daniel Kaplan of SportsBusiness Journal while departing last week’s league meetings. McNair added that, after 2014, the cap will “gradually” increase.

Kaplan’s report also confirms that the union borrowed against future years in order to pump the cap in 2012 from as low as $113 million per team to $120.6 million per team, not much more than the $120.375 million per team in 2011. The same thing will happen in 2013, which means that gains to be realized in 2014 and beyond will have already been, to a certain extent, consumed by the players in order to drive up the numbers in 2012 and 2013.

The end result, per Kaplan, will be a total of $142.4 million per team in salary and benefits for each of the first three years of the new CBA, with modest annual increases thereafter.

Kaplan points out that, last March, the players walked away from a proposal that would have guaranteed $146 million per team in 2012, $150 million per team in 2013, and $161 million per team in 2014. (Actually, the document created by the owners in March 2011, a copy of which PFT has obtained, showed a minimum of $148 million in 2012 and $155 million in 2013.) NFLPA executive director DeMaurice Smith called that offer the “worst deal in the history of sports,” in part because of the gross reduction in the players’ take and in part because the formula included no portion of the league’s financial upside.

So, instead, the players eventually traded a proposal with a high floor and a low ceiling for a deal with a low floor and a high ceiling. And for now the numbers are congregating at the floor.

DeMaurice Smith is off to a really rocky start.

"When I was young I thought that money was the most important thing in life; now that I am old I know that it is." - Oscar Wilde

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