Cap To Hit $165 Million By 2011?

[JoeSixPat]

First of all, there's nothing really in this story that justifies why, even knowing that Total Football Revenue is part of the Salary Cap now, the cap would rise so much by 2011. The biggest part of the equation would still be the TV package and from what I know the NFL is still an advertising loss leader - i.e. networks want it to promote other shows... that the advertising alone doesn't cover their costs + what they pay the NFL.... so I don't see TV packages rising as much as this rumor would predict.

Also, I think there's still another shoe that's going to fall in terms of the halve and have nots in football - that is while the equations might make the cap rise significantly (even if its not as much as this) that doesn't mean that every owner has the ability, or will choose to spend up to such a high cap.

While these sort of predictions on the surface might suggest that one could backload contracts and still afford them, if the cap rises too fast it could wreak havoc with player team relations - i.e. - you think there are a lot of holdouts of guys under contract now? How many more would there be with this type of money available for guys who, relatively speaking, have outplayed their contract.

It could create a chaotic situation if the cap's not handled properly and made to grow a bit slower than this.

POSTED 8:07 a.m. EDT, August 3, 2006

CAP TO HIT $165 MILLION BY 2011?

There's talk in league circles that, within five seasons, the salary cap could rocket from $102 million to a whopping $165 million.

(It's a long way from the $34.6 million per-team spending limit that first was implemented in 1994.)

Others believe that the cap will land between $145 million and $150 million by 2010.

Either way, the increase in the money that each franchise can spend on its players is going to be even more staggering, and it's a direct result of the continued growth and prosperity of the greatest professional sports league in the known universe. It's also a product of the increase in the percentage of Total Football Revenue that will fund the cap, which gradually moves from 61.89 percent in 2006 to 62.95 percent in 2010.

As a practical matter, this means that younger players (especially rookies) need to get themselves in position to hit the market when the cap approaches and/or passes $150 million. Why? Because someone is gonna get a ton of money in those years, and if a player is already under contract at the time, the chances of joining in the feast decreases.

 

[VJCPatriot]

The cap is determined by a percentage of revenue generated in the past year. So it will grow as football grows.

Yeah holdouts could be a problem but teams deal with them.

There will always be some player wanting more money. No stopping that.

 

[MoLewisrocks]

Lots of people predicted there would be a $110M+ cap this season too. Just as many are now predicting 2009 will be an uncapped season because the CBA allows the sides to void the deal they just agreed to to avoid a work stoppage and play russian roulette with their cash cow as early as 2008 because the deal just won't work.

 

[Miguel]

First of all, there's nothing really in this story that justifies why, even knowing that Total Football Revenue is part of the Salary Cap now, the cap would rise so much by 2011. The biggest part of the equation would still be the TV package and from what I know the NFL is still an advertising loss leader - i.e. networks want it to promote other shows... that the advertising alone doesn't cover their costs + what they pay the NFL.... so I don't see TV packages rising as much as this rumor would predict.

The NFL just signed TV deals. As far as I know, those deals are backloaded.

While these sort of predictions on the surface might suggest that one could backload contracts and still afford them,

Something I have been saying on this board for months

if the cap rises too fast it could wreak havoc with player team relations - i.e. - you think there are a lot of holdouts of guys under contract now? How many more would there be with this type of money available for guys who, relatively speaking, have outplayed their contract.

It could create a chaotic situation if the cap's not handled properly and made to grow a bit slower than this.

I remember reading that the cap was made $102 million and not $104 million because both sides involved realized that it would be difficult for teams to spend all of the cap increase.

 

[JoeSixPat]

The cap is determined by a percentage of revenue generated in the past year. So it will grow as football grows.

Yeah holdouts could be a problem but teams deal with them.

There will always be some player wanting more money. No stopping that.

I did not know any of this. Thanks.

Seriously, Miguel's talked about the cap growing but I don't think this sort of growth was anything most envisioned.

If TV contracts are already signed through 2011 then THAT portion of the cap is known - and its the Total Football Revenue (i.e. stadium and team revenue) that's being projected as entering the equation and adding to the cap in this way.

Now as many here will remember during CBA discussions, just because that money is in the cap equation doesn't mean all teams actaully HAVE that money to spend, and even if they do, that doesn't mean they will actually spend it.

This is slightly concerning on a parity level, but I'd guess at some point the minimum team payroll would come into play or would have to rise (Miguel - any recollection of the minimum "cap" equation from the new CBA?)

Regardless, this type of growth - even if not fully to this level - creates a Wild West aspect to the NFL in the next 5 years, and as always, teams best able to adapt and use it to their advantage will do the best.

My main lament I guess is that BB and Kraft, in an age of parity and the need for fiscal responsibility, worked the system the best and created their dynasty.

Given a more chaotic system with a ton of money flooding the market, players and agents scrambling, other teams outrageously overpaying with little immediate consequence, dogs sleeping with cats, etc... seems to diminish what I've come to love about the in-season AND off-season strategy of the NFL.

 

[dryheat44]

The holdouts will become more common, as you suggest. Astute agents may have their clients time their contracts to expire going into 2011, but team capologists are also aware. So, to make an example, I believe Reggie Wayne is under contract through 2011. Let's say in 2009, the cap grows by 25% over today's figure. Someone like Chad Jackson, who has become a decent #2 receiver, hits free agency in 2009 and gets a four year contract worth 30 million in guaranteed money. Wayne, who is now the active leader in all WR categories, is being paid a total of 11 million for 2009-2011.

Most likely, Reggie Wayne isn't going to report. Most likely, Reggie Wayne's agent, seeing a big commission, isn't going to allow Wayne to report without a new contract. Yeah, there will be problems all over the NFL when second and third tier players vault over stars on the pay scale, by a large amount.

Most owners are in the NFL to make money. If the salary cap gets too high, there will be many teams that don't spend to the cap. Each owner is going to have his or her own cap, which will be at a level that maintains the franchise's profitability. I don't see the problem there. Dallas and Washington will spend to the cap, but it won't be a baseball situation like the disparity between the Yankees and Royals.

 

[flutie2phelan]

When i read that rumor in PFT, it immediately struck me as such an explosive wildcard
that justifies the solemn - if not worried - tone
that J6P, Miguel, and dryheat bring to the discussion.

These well may be the last of the NFL's "good old days".
This may be the first year that even our very own Mr. Fans-Owner doesn't spend substantially the full cap.

 

[JoeSixPat]

I knew the cap was going to rise more under this CBA than the old one, but not at this rate. Before we saw yearly cap increases of, what, $2 mil a year? I figured maybe we'd see triple that the new CBA - but $12 million a year????

I know Miguel mentioned that many owners didn't want the "problem" of spending an extra $2 million this year... if that was an issue how is a cap rise of $12 million a year on average going to be handled?

I suppose they'd just prefer to not spend the money whatsover, but wonder if allowing rosters to expand would be something worth considering. Bringing rosters up to 60 would provide needed depth and end some of the charades that go on with injuries and red shirting, and let practice squad guys truly focus on development.

I don't think it would water down the league at all - the only thing it would do is ensure that the added cap money doesn't all get spent on a few elite players.

Such a move might help prevent elite player salaries going into the stratosphere - which is usually the most challenging aspects of managing the cap - whiile allowing more players a chance to play in the NFL and collect a paycheck.