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Franchise Tag primarily benefits non-Franchise players, not owners

Discussion in 'PatsFans.com - Patriots Fan Forum' started by solman, Apr 8, 2007.

  1. solman

    solman Rookie

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    Its worth remembering that most of the benefit from having a Franchise tag goes to other players, not to the owners. Every salary cap dollar not spent on Franchise players is available to be spent on other players.

    Even if some teams don't spend to the cap, the new CBA includes a provision that increases future salary caps to compensate for this. (Last year the owners spent about $20M less than 59% of total revenues on players, so the cap for 2007-2011 [but not 2012 Miguel] went up by $134K).

    This isn't the only example of the union favoring a majority of its players over a minority. The Entering player pool (AKA rookie salary cap) transparently benefits veterans at the expense of rookies. The CBA even has a provision that allows owners to end the entering player pool... but only if they compensate the veteran players who earn less as a consequence.
  2. BelichickFan

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    #24 Jersey

    I'll start paying attention when it's over. It seems like one of the big complaints is he can be Franchised again next year. Well if that horrible scenario plays out he'll have pocketed $17M over 2 years and be a UFA at age 28. Wah.

    He could get hurt ? He can get insurance on that.

    He's a little whiny *****. Like the rest of them. Turning his nose up at $17M over 2 years.
  3. Miguel

    Miguel Patriots Salary Cap Guru PatsFans.com Supporter

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    If the franchise tag did not have any benefit to the owners, why did they decide to have it in the CBA and keep it at every extension??
  4. Miguel

    Miguel Patriots Salary Cap Guru PatsFans.com Supporter

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    Do you think benefiting veterans over rookies is a bad thing???For the record, I do not.
  5. PatsFanInVa

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    I thought that you spend more on a franchised player, for that one year, than you would if he signed. Therefore, less is available for "the majority" of players.

    You just don't get the multi-year deal if you get tagged. In Asante's case, for instance, you have to face the uncertainty of playing for $7.9M for one year, instead of some larger amount of guaranteed money, covering more years of play. That money would be prorated, however, so more money from the cap would be available "for other players" were the Patriots to sign on the dotted line today.

    PFnV
  6. skaIownsIyou

    skaIownsIyou Rookie

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    point is that samuel's numbers were almost identical to champ bailey's and bailey was a dpoy candidate...espn has samuel ranked as #1 tied with bailey, so he feels that he deserves a long contract, yeah you can make the point that he's making 7.9-8 million this year, but what about next year? or the year after that?

    instead of being tagged for 2-3 years, he'd rather have a locked up deal

    and to be tagged for 2-3 years, he'll have to have career seasons every year

    not to mention that he was the #1 rated CB due for FA this offseason, and the 2nd best cb got an 8 year 80 million deal...with guaranteed money

    he'd rather cash in on his career season because you never know what'll happen next year

    he's had an amazing season this year, all under the radar imo....but i guess you can kinda understand where the pats admin are coming from, if i was the gm, i'd want to see another very productive year before handing out 20 million in guarantees, then i'd know that his great season in 06 wasnt just 'luck'
  7. PatsFanInVa

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    Are you saying somebody got a $10M average per year contract, 100% guaranteed? Or are you saying "with guaranteed money," as a sort of side dish, like, he got fries with that contract?

    Franchise tag is $7.9M, guaranteed. As in, you sign it, you get the checks.

    Who are you talking about who got an $80M, 8 year contract? How much is guaranteed? Because that is the money that matters, the part you actually get paid, no ifs ands or buts.

    More likely he has guarantees for <$7.9M a year, but for more years. And that, my friend, is the point, at least of this thread: Not whether Samuel is right, but whether "the majority of players" are "benefitting" from "more money being available," when you franchise a guy.

    My impression is there is actually less money available.

    PS, I do agree it does not benefit owners per se to franchise a player. It is a tool they have to put together the best possible team. A good owner spends to the cap most years anyway.

    PFnV
  8. Jimke

    Jimke Rookie

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    The franchise tag on Asante Samuel has already benefited the Pats.

    Had they not had the tag available, he would already be on another team

    with a 2008 3rd round compensatory pick in return. As a worst case scenario

    the Pats should get more than a 3rd round pick in a trade. Best case is

    that they have more than 3 months to work out a long term deal.
  9. PatsFanInVa

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    Just read the other thread about Asante wanting a deal which guarantees him 30M in 3 years... Clements apparently got that (according to Reiss, and my bad, I didn't follow the Clements deal...) but as part of an 8 year deal. Which probably means, he can take his 10M a year to the bank for 3 years, and pray to God his play remains worth that money in the out years.

    Edited in: By the way, you still might have a scenario where he has a 6 year deal, 30M guaranteed, pro-rated, which puts you at 5M/yr guaranteed, 3 years of which is dead money, and then out the door with your greedy buttocks. So you still end up with about 3M more a year for those three years, to spend on other players, then 5M/yr to try to write off the books for the next 3 years in dead money. Not a very Pats way of doing things, but the point is the money isn't necessarily coming out of other players' pockets even in this scenario.

    But yeah, if that article is to be believed, the best corner out there will get
    2M more. The last time a CB attempted to get $10M APY (of course, in a different era [already],) it was Ty Law. You remember Ty Law....

    So in terms of this thread, I'll just amend my comment. IN MOST CASES, you're making the tradeoff of guaranteed money versus a one-year bonanza -- this does not benefit other players vying for those same dollars.

    One man in NE is considered worth 10M APY at present. The Reiss article saying that Asante wants 10M guaranteed over 3 years, makes me think, okay, that's just funny.

    Sit out a year if ya want, Asante. See what that does for your market value. Or, get real. The cap has certainly inflated... but I think you're pegged your self-assessment well north of where the Pats have you on their value chart.

    Or, in terms of the scatter-plots on yet another thread... we want a curve, not a hockey stick.

    PFnV
    Last edited: Apr 8, 2007
  10. solman

    solman Rookie

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    I doubt the owners like free agency, but curiously that is in the CBA, and has remained there at every extension. I think its safe to say that there are many things in the CBA that the owners did not want.

    I don't think that the Franchise tag is one of these. I'm simply pointing out that the owners are not the primary beneficiaries. The vast majority of the benefit from the Franchise tag goes to the 98% of players who will never be in danger of getting tagged.
  11. solman

    solman Rookie

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    I don't think this rule is bad for football.

    I do think it is wrong that a union can deliberately discriminate against a minority of its members, and that the minority is then required to accept this discrimination.

    But I don't think it hurts the NFL.
  12. solman

    solman Rookie

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    No.

    The 59% is based on how much money is PAID to players, not how much counts against the salary cap. If a player has a $1M salary and a $20M signing bonus on a 5 year deal, this counts as $21M, not $5M towards the 59%.

    That said, even if we were only considering the salary cap, its safe to say that Nate Clements did better than he would have done if he were tagged. I think the same can be said for Briggs had he NOT been tagged.

    Asante should be the exception (only a foolish team would pay him more than $7.8M per year on a long term deal) but I'm afraid he dosn't realize this.
  13. solman

    solman Rookie

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    Right. Using the tag on Asante benefits the Pats, but hurts other teams (who would have benefited from a more robust FA market if Asante were available).

    When other teams use the tag it benefits them, but hurts the Pats.

    Obviously when teams use the tag it benefits them. Otherwise, teams wouldn't use the tag.

    I'm talking about the benefit to the owners of having the tag in the CBA. I think there is a benefit to owners, but it is small. It certainly doesn't save the owners much money.

    The union may need the owners to be seen as pushing for the Franchise tag, because it allows the union to blame it on the owners.

    That's why I was surprised to see the language in the CBA clearly indicating that the Entering Players pool is something the union requested. If rookies are dissatisfied with the pool, they have nobody to blame but their own union.
  14. Pat_Nasty

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    I'm not sure where you get the idea that the franchise tag somehow frees up cap money to be spent on other players. In fact it is liable, if anything, to do the opposite. Unlike a signing bonus which the team can amortize over the course of the contract, and thus break down the cap hit into manageable proportions, the franchise tender is a multi-million immediate payout 100% of which counts against that years cap.

    An exceptionally cap-savvy team like the Pats can afford to franchise a player and still be active in free agency, but most will find the one-year cap hit of the franchise tender a burden on their liquidity. For example, you have teams like the Colts, who were forced to cut players in order to afford the large cap hit they're taking by franchising Freeney this year.

    In fact, the cap was supposed to be a burden on the cap -- this was supposed to provide the incentive for the franchise to reach a long-term agreement with the tagged player. Because teams have become better at managing the cap than anyone imagined they could in 1993, you have teams like us and the Bears who can happily go into the season with a franchised player accounting for almost $10 million dollars of that year's cap.

    Teams are therefore able to franchise players and not be hard-up to resign them. The result of this is that the franchise tag becomes that much more of a threat that teams can use to resign pending free agents. If a team finds itself with a healthy amount of free cap space going into a season, it can afford to franchise sub-elite players that the tag wasn't designed for. Thus, they can use the threat of the tag to coerce players to resign for less than they would if they were confident they'd reach FA at the end of the season.
  15. Pat_Nasty

    Pat_Nasty Rookie

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    The franchise tag came into existence during the 1993 CBA because the owners, having lost a key antitrust case which set a precedent that would enable players to bring an avalanche of successful suits against the NFL, were forced to accept a deal that allowed free agency for vested veterans. Their main conditions, in order to go along with free agency, were the salary cap and the franchise tag.

    The tag's purpose was to give teams a way of preventing the loss of star players in free agency, and adding leverage and incentive to get top players to resign with their original teams. The NFLPA accepted it because it was the only way to reach an agreement with the owners providing free agency for anyone.

    The reason why the union is unhappy with it now is because, almost 15 years into the free agency era, the union sees it as a concession they were forced to give up in return for a right that should have been theirs to begin with.
  16. solman

    solman Rookie

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    The salary cap is just an accounting mechanism. The real limit is the TOTAL amount of money spent on players. This is 59% of total revenue in 2006-2007; 59.5% in 2008-2009 and 60% in 2010-2011.

    SIGNING BONUS COUNTS IN THE YEAR THAT IT IS PAID, not when it counts against the salary cap.

    The salary cap is adjusted after each season to make sure that the spending targets are met. Last year owners underspent by over $21M, so each team's salary cap for 2007-2011 was increased by $134K to compensate (a total of $21.44M).

    All this ignores the fact that your basic assumption (that the Franchise tag doesn't increase cap space) is false. Nate Clements is going to count as something like $11M against the salary cap this year. Had he been Franchised, it would have been less than $7.8M.
  17. solman

    solman Rookie

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    The union is HAPPY with the tag.

    For political reasons they would like to blame it on the owners.

    But if the owners said tomorrow "We'll get rid of the tag if you want us to. If you decline, nobody will ever know that we made this offer." The union would say: NO THANKS.

    They would do this because most of their members are better off thanks to the Franchise tag.
  18. PatsFanInVa

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    Either everything I ever thought was true is not true, or we are talking past each other. You are talking league-wide, so I am going to have to catch up by going team-wide first.

    Using the Team/Cap paradigm, and a fictitious example:

    Right now, A.S. has a cap hit of 7.8M. Let's say that right now the Pats have a remaining $7M under the cap, for various uses (rookies, in-season replacements, any other FA moves, etc.) As I understand it, on 6/2 there will be another $2.5M available due to Dillon's dead money hit being reduced, but let's leave that out of the equation. So the Pats have $7M to spend, total, given A.S. being franchised.

    Let's make a fictitious offer to him and say he accepts it. It's a 6 year deal, with a signing bonus of $30M, prorated over 6 years. Let's say his salary for 2007 is $1M. That's 30/6 = 5, plus 1 for salary - or $6M to play in 2007. The Pats therefore have 1.8M more to spend. Let's say they give it to a combo of three backups, who excel in their chances to come through because of injury, during the season... each of whom have $600,000 more money in their pockets charged against the cap this year.

    It seems to me that other players have benefitted by the Pats' signing of a longer-term contract for Samuel, in the one-team, one-year scenario.

    Now, I understand you're saying that all teams, this year, added up, are responsible to spend 59% of revenue on players. The Salary Cap divides that responsibility equally among teams.

    So - 1.8 million additional dollars in our hypothetical case have gone to non franchise players, because the Pats did not use the more expensive Franchise Tag. Our portion of the 59% (that is, our cap,) has benefitted the non-franchise guys, because the would-be franchisee got the long term deal.

    I think the difference here, is that you are arguing that the Asante-level player not tagged gets the benefit of the Asante-tagging, because competition is removed from the marketplace. I am arguing that the middle class of players is rewarded by the availability of additional money. The accounting breaks down, as you describe it, between team and league. In the above example, we count 31M against the 59%... but how is that enforced? Every team could overpay by 31M against 59%, but is there a corrective mechanism in the CBA if the entirety of the league overspends? Given that there are teams that do not spend to the cap, I would think long-term deals like this would be evened out; however, even if that is not the case, is there in fact an adjustment to next year's 59.5%, reflecting overspending in 2007?

    In essence, the 31M count against 59% but so what? The actual money still remaining to spend -- by measureable standards -- increases in 2007, by not franchising, in the above scenario.

    (again, pending some adjustment mechanism that makes overspending against 59% mean that the teams can underspend in 2008 against the 59.5%. I really don't understand the CBA past the level of individual team's caps, but am happy to be ejumacated.)

    PFnV
    Last edited: Apr 8, 2007
  19. Miguel

    Miguel Patriots Salary Cap Guru PatsFans.com Supporter

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    Free agency has to be in the CBA. The owners lost a court case. IIRC, the court did not say that there had to be a franchise tag in the CBA.
  20. solman

    solman Rookie

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    Basically, there are two caps:

    1. The traditional salary cap, which is basically an accounting mechanism for assigning dollars from multi-year contracts to specific seasons.

    2. New in the current CBA is an actual spending target (59% going up to 60% of total league revenue). All spending on players counts against this target in the year when the spending occurs. (i.e. throw out bonus proration, veterans exclusions, LTBE, NLTBE, etc. Either a player received money during the league year, or he didn't).

    Both the league and union have made statements that indicate that this target is the real measure that they use to determine how revenues are allocated between the owners and the players. The salary cap is just an accounting measure used to enforce this distribution of revenues.

    The salary cap is automatically adjusted after each season to make sure that the spending target is reached. If the whole league spends less, then all teams receive an increased salary cap to make up for the difference. If the whole league spends more, then teams which spent more than their share (1/32nd) get salary cap penalties proportional to the amount by which they exceeded their share. The increases or penalties are prorated across all remaining capped years under the current CBA.

    The whole system attempts to make sure that spending comes as close as possible to the target. During the last capped year (likely 2011) this may break down, but the system should work well during 2006-2010. (Coming within $20M of a three or four billion dollar target was an extremely good start. I doubt that the system will always work so well.)

    I agree with your salary cap mechanics, but I disagree with your interpretation. The Patriots can move salary cap dollars between years with relative ease. If they need $1.8M extra to pay three mid-level players they can use restructuring (amongst other techniques) to move additional money into 2007. If the Patriots have $1.8M extra, they can move it into 2008 by giving a player a fake LTBE incentive (amongst other techniques).

    To say the same thing differently: The salary cap is just an accounting mechanism. Ultimately every dollar the Patriots spend (less veterans exclusions) will count against the salary cap in one year or another, and the Patriots have many techniques to move dollars between years. The total salary cap hit between 2007 and 2011 for a five year deal ($30M signing bonus and $1M annual salary) is $35M.

    It is difficult to compare a one year $7.8M hit with a five year $35M hit. In my opinion, given the risk of injury or diminished performance, the $35M over five is MUCH more expensive than $7.8M over one. But I can't fault anyone who takes the opposite position. The correct answer depends on what assumptions you make about Asante's future.

    In our hypothetical scenario, Asante gets $31M in 2007, while the three players get $1.8M. Under the tag, Asante gets $7.8M in 2007 (and I assert that the three players would still get their $1.8M thanks to restructuring or other accounting procedures, so lets ignore them). That means that an extra $23.2M ($31M-$7.8M) is spent on players. This will decrease the total league-wide salary cap from 2008-2011 by more than $5.8M per year. If the entire league underspends, then all teams will partake equally ($181K/year for four years). If the entire league overspends, then only the overspending teams will be penalized. If an extra $23M is enough to go from underspending to overspending (as it would have been in 2006) then there would be a combination of both (all teams would lose the underspending adjustment plus overspenders would receive a penalty).

    Because of the high probability that the Patriots would receive a salary cap penalty as a consequence of this bonus, the Patriots would almost certainly feel compelled to break it up over several years. You can see this around the league where guaranteed money (which almost always used to take the form of signing bonuses) now often includes years of guaranteed salaries.

    Actually, I am saying that there is no "extra" money. An individual team's cap may go down for the year in question, but this comes at the cost of:

    1. Salary cap hits in future years
    2. Salary cap adjustments based on league wide spending

    Yes.

    If the league overspends, then the salary caps of those teams which over spent their share (1/32nd), will be reduced by an amount proportional to their share of the over spending. If 24 teams each underspend by $4M, and 8 teams each overspend by $16M, then league wide overspending is $32M ($128M-$96M). Each of the 8 overspenders will have their salary cap reduced by a total of $4M or $1M in each of 2008, 2009, 2010 and 2011.

    If the opposite happens (24 teams overspend by $4M, while 8 teams underspend by $16M) then all 32 teams will have their salary cap increased by $250K in each of 2008, 2009, 2010 and 2011.
    Last edited: Apr 9, 2007

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