Will cash floor give salary cap some bite?

[ralmat55]

The Patriots reportedly believe some of their competitors are in bad shape cap wise which will result in even more players being released over the next few weeks and the free agent market being depressed to the point where they might be able to get some good bargains.

This made me wonder what had changed from previous years when teams like the Redskins would be $20 million over the cap the weekend before the new league year began and still be able to sign three big money free agents the next weekend without having to cut any good players.

The reason the "cap is no longer crap" is the new 89% cash floor which was part of the 2011 CBA and thought to be a victory for the union by forcing the Mike Browns of the NFL to actually spend. But, the cash floor will also make it much harder for teams to borrow from future caps to support current higher spending because it will be much harder to burn off dead money than it was before the cash floor came to be.

Before, if a team found itself in cap prison, it could burn off all this dead money by going through a season or two where their current payout would be significantly less than the cap. Now that the team has to pay out at least 89% of their cap in new money every season, it will not be able to emerge from cap prison so quickly.

Going forward in this CBA, teams are going to have to adopt a more pay as you go mentality. This is why this tight cap period is going to be so hard on so many teams. My guess is the Patriots front office understood this from the beginning. Just another reminder of how fortunate we are to be fans of the best franchise in the NFL.

 

[jmt57]

There are a few teams that appear to have quite a bit of money available to spend, though in some cases (e.g., Miami Dolphins) that is a mirage due to the number of roster spots open due to expiring contracts and soon to be free agents that they will need to either re-sign or replace.

» Over the Cap- NFL Salary Cap Space 2013

Top other NFL teams and their cap space, in millions of dollars.

$55 -- Bengals
$45 -- Browns
$44 -- Colts
$43 -- Dolphins
$31 -- Bucs
$23 -- Jaguars

 

[ctpatsfan77]

The Patriots reportedly believe some of their competitors are in bad shape cap wise which will result in even more players being released over the next few weeks and the free agent market being depressed to the point where they might be able to get some good bargains.

This made me wonder what had changed from previous years when teams like the Redskins would be $20 million over the cap the weekend before the new league year began and still be able to sign three big money free agents the next weekend without having to cut any good players.

The reason the "cap is no longer crap" is the new 89% cash floor which was part of the 2011 CBA and thought to be a victory for the union by forcing the Mike Browns of the NFL to actually spend. But, the cash floor will also make it much harder for teams to borrow from future caps to support current higher spending because it will be much harder to burn off dead money than it was before the cash floor came to be.

Before, if a team found itself in cap prison, it could burn off all this dead money by going through a season or two where their current payout would be significantly less than the cap. Now that the team has to pay out at least 89% of their cap in new money every season, it will not be able to emerge from cap prison so quickly.

Going forward in this CBA, teams are going to have to adopt a more pay as you go mentality. This is why this tight cap period is going to be so hard on so many teams. My guess is the Patriots front office understood this from the beginning. Just another reminder of how fortunate we are to be fans of the best franchise in the NFL.

IIRC, there's some sort of "rolling average" that has to be met. And, as you noted, it's a cash floor based on the amount actually paid out. That said, if you have a couple big contracts a year, meeting the cash floor almost takes care of itself.

 

[chevss454]

IIRC, there's some sort of "rolling average" that has to be met. And, as you noted, it's a cash floor based on the amount actually paid out. That said, if you have a couple big contracts a year, meeting the cash floor almost takes care of itself.

You have a good memory.

According to the CBA's Article 12, Section 9:

A) For each of the following four-League Year periods, 201 3-201 6 and 2017-2020, there shall be a guaranteed Minimum Team Cash Spending of 89% of theSalary Caps for such periods (e.g., if the Salary Caps for the 2013-1 6 and 2017-2020 are$100, 120, 1 30, and 1 50 million, respectively, each Club shall have a Minimum Team Cash Spending for that period of $445 million (89% of $500 million)).

If a team fails to meet that standard, the CBA continues:

B) Any shortfall in the Minimum Team Cash Spending at the end of a League Year in which it is applicable (i.e., the 2016 and 2020 League Years) shall be paid,on or before the next September 15, by the Team having such shortfall, directly to the players who were on such a Team's roster at any time during the applicable seasons, pursuant to the reasonable allocation instructions of the NFLPA.

 

[ctpatsfan77]

You have a good memory.

Thanks.

[It did come up a few weeks ago on this board or another one I frequent, though. ]

 

[ThatllMoveTheChains!!!]

I'm guessing the flat cap over the past 4 years is playing a role as well. The cap is crap game was hugely dependent on a constantly inflating cap.

 

[ralmat55]

There are a few teams that appear to have quite a bit of money available to spend, though in some cases (e.g., Miami Dolphins) that is a mirage due to the number of roster spots open due to expiring contracts and soon to be free agents that they will need to either re-sign or replace.

» Over the Cap- NFL Salary Cap Space 2013

Top other NFL teams and their cap space, in millions of dollars.

$55 -- Bengals
$45 -- Browns
$44 -- Colts
$43 -- Dolphins
$31 -- Bucs
$23 -- Jaguars

The Bengals are similar to the Dolphins in that they have numerous free agents of their own as well.

 

[BradyBranch39]

I'm not as knowledgable about this as I was before the new CBA, but my gut is that you're missing a key detail or two.

The rolling average is one of them. The others, I can't think of at the moment.

 

[PatsFaninAZ]

Some teams seem to be hedging by carrying forward pretty large cap carry-forwards from last year to keep flexibility to underspend.

Several teams carried forward over $10 million last year. The Bengals and Bills actually have enough space that if they wanted to, they could continue to carry over pretty large amounts each year even meeting the 89 percent spend. I'm actually a bit surprised by the carry forwards of some teams. Some teams, like the Broncos and Seahawks, carried forward a lot, but it was already partly spent. The Eagles, though, gave themselves a pretty big stockpile by carrying forward a whopping $23 million. Same with the Browns.

How does Indy have so much cap space? They carried forward hardly anything. Do they have lots of free agents or something?

 

[patsinthesnow]

How does Indy have so much cap space? They carried forward hardly anything. Do they have lots of free agents or something?

They essentially had a college offense. QB, RB, TE1, TE2, WR2, WR4 were all rookies. The defense had alot of cheap scrubs too.

 

[PatsFaninAZ]

They essentially had a college offense. QB, RB, TE1, TE2, WR2, WR4 were all rookies. The defense had alot of cheap scrubs too.

11-5 and $45 million under the cap -- that's pretty good. Clearly not a dominant schedule, but, still, they are in pretty good shape.

 

[jason423]

The cash floors really mean very little. Some teams might pay a little attention but the fact that there are no fines or anything it really gives the cheap owners the ability to keep money, gain interest and then payback the shortage. The league killed the union in the CBA.

Minimum Cash Spending: Does It Mean Anything? - Over the Cap

 

[ralmat55]

The cash floors really mean very little. Some teams might pay a little attention but the fact that there are no fines or anything it really gives the cheap owners the ability to keep money, gain interest and then payback the shortage. The league killed the union in the CBA.

Minimum Cash Spending: Does It Mean Anything? - Over the Cap

While I defer to your knowledge and appreciate your work, I respectfully disagree with your assessment of the cash floor and your analysis of the last cba agreement.

The rolling averages will help teams deal with year to year variances in cash payout, but it still will be hard for teams to burn off excess unamortized bonuses quickly and still comply with the cash floor. Yes, it can be done, but it will be harder than it was without the floor, and it will be easier to back yourself into a corner by throwing too much money forward to make cap space today.

The cash floor is not toothless. As I understand it, teams not in compliance will have to pay the balance to those players who played for the team during the period of time they were not in compliance. While I haven't read the CBA, my thought is this money paid would have to count against their current cap. What team in their right mind would want to put themselves in a situation where they have to expend money to past players while reducing what they can pay present and future players?

As for the CBA, the players association made some concessions for sure, but they made considerable progress towards their goal of getting NFL contracts guaranteed. Whether it was intentional or not, who knows. But, you are already seeing it when it comes to rookie contracts, and you'll see more of it with veterans as teams will use additional guarantees as an enticement to attract players in this flat cap period.

It's too early to judge who won the 2011 negotiations, but, if players' contracts more and more become guaranteed because of the landscape the cba made, then, to me, the players will have won it.

 

[DaBruinz]

I've been looking at Article 12, Section 9 of the CBA.

It is not a rolling average as some have said. A rolling average means it changes each year. It doesn't. It's the same for years 2013 through 2016 and then 2017 through 2020.

EDIT: I re-read the particular article after reading Jason's take and realized that the "cap floor" was a way for the player to receive money they probably should have gotten in the first place.

The fact is that the "Cap Floor" is not an enforcement tool. It's more of an accounting tool.

 

[DaBruinz]

The cash floors really mean very little. Some teams might pay a little attention but the fact that there are no fines or anything it really gives the cheap owners the ability to keep money, gain interest and then payback the shortage. The league killed the union in the CBA.

Minimum Cash Spending: Does It Mean Anything? - Over the Cap

Jason - I have only one problem with your article.

You assume that 107.7 million is the cap floor for 2013. That's incorrect since the Cap Floor would be 89% of the Average Unadjusted Salary Cap from 2013 through 2016. And we won't know what that is until just before the start of the 2016 season when they announce what the 2016 Salary Cap will be.

It actually just dawned on me that the Minimum Team Cash Spending is not a true Cash Floor, but more of an accounting adjustment to give players on teams money they should have gotten to begin with.