Schefter reveals the framework of the new deal

[Miguel]

Clayton has his take on 5 winners and losers in the potential new formula. I'd take this with a grain of salt though because we don't really yet know what the formula will be or just how it will work and at least as far as cash spending the league proposed a 3 year window of calculating cash % and not a year by year one...not to mention he didn't indicate the # of players already under contract or tender which puts current payroll in reasonable context vs. needed spending.

We are not on either list.

NFL: Teams most hurt, helped by salary-cap proposal - ESPN

This supports my main point that going from using a cap floor to a cash floor will increase cash spending on the players.

 

[Miguel]

Clayton has his take on 5 winners and losers in the potential new formula. I'd take this with a grain of salt though because we don't really yet know what the formula will be or just how it will work and at least as far as cash spending the league proposed a 3 year window of calculating cash % and not a year by year one...not to mention he didn't indicate the # of players already under contract or tender which puts current payroll in reasonable context vs. needed spending.

We are not on either list.

NFL: Teams most hurt, helped by salary-cap proposal - ESPN

For AndyJohnson, "A few teams created phony incentives that they never planned to pay just to get over the payroll floor and then pocketed the unspent money."

what is your take on the above sentence?

 

[DaBruinz]

Miguel -
If the reported change is true, do you see it as being easier or harder for teams to create cap space for themselves? And, do you think this will have a positive or negative effect on team rosters?

 

[Ring 6]

My argument is that when you are contending something about the CBA that I think that none of us have heard before - teams have to be above the floor before the regular season starts and are presenting it as fact. One should be able to back up that fact or say I think that it is my opinion but I am not sure if it is true.

Perhaps, however I felt it was widely recognized that if you must be under the cap by the start of the season you must be over the floor.
Is this, in fact, incorrect, or are you just not accepting it if I can not show you where it states this?
What does the CBA say about when the team must be above the floor.
I defer to you as the expert on the CBA and cap, so if I am incorrect, by all means direct me to the proof.
If I stated teams must be under the cap by the start of the season, you wouldn't expect me to say "I think" even though I am not conversant enough with the cap to find the language.

 

[TruthSeeker]

Tens of millions easily.

In 2008, the Tampa Bay Bucs gave running back Noah Herron and defensive end Patrick Chukwurah combined $25 million in salary and bonuses all of which counted vs. the cap to get them above the cap floor. Each player would get their bonuses if they blocked 6 punts during the 2008 season (special team related bonuses are considered LTBE bonuses no matter how ridiculous they are and even if the player has no chance of playing special teams). Obviously, neither reached their bonus and Herron was paid $157k and Chukwurah was paid $71k. So the Bucs used $25 million in cap money and paid out about $225k in real money.

Yes, the Bucs' 2009 cap was adjusted to reflect this, but the Bucs went into the 2009 season $30 million under the cap so the $25 million passed forward was never spent by the Bucs. So the Bucs got $25 million cap dollars by spending $225k real dollars.
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Interesting. So was the salary cap floor also correspondingly raised in 2009 since they didn't meet it in 2008? Or do the rules allow them to get around the floor (and not push it into another year)?

 

[Ring 6]

For AndyJohnson, "A few teams created phony incentives that they never planned to pay just to get over the payroll floor and then pocketed the unspent money."

what is your take on the above sentence?

If it is an accurate statement, then my statement is incorrect. I do find the phrasing curious, and truly would prefer direct examples to a John Clayton anecdotal opinion comment.

 

[MoLewisrocks]

I think that the cap floor was raised across the board because it was based on league wide spending. It was scheduled to rise to 90% of cap in 2011 and the cap itself was then further adjusted upward by CAM calculations that added money to the standard cap formula based on prior spending. In 2009 it added $4M to an already escalating cap. Normally that money would have been spread over the remaining seasons in the CBA so it went largely unnoticed. Only with an expiring CBA it all went into the last capped season. I think players prefer the current method under discussion because we don't know all the particulars yet or whether there will be a workaround or two either built in or uncovered (just as agents like Condon eventually uncovered and encouraged the manipulation of workarounds regarding the cap). It sounds impressive that teams will have to spend a cash minimum... If it is calculated based on league spending they may not have any trouble reaching that limit whereas if it is calculated on a team by team basis, even over 3 year windows, it may in the end eventually restrict spending if it doesn't add to cap room...

Historically the only team I can recall who actually underspent the cap by design with the intention of pocketing the difference was the Vikings under their former owner Red McCombs. He did however set Ziggy Wilf up with cap space to spend and he has. KC was a team transitioning top to bottom and simultaneously paying a large portion of renovation costs for comparatively ancient Arrowhead. Pioli has the courage of his convictions and grasp of situations so he was very conservative his first two seasons in KC knowing you have to walk before you run and knowing the revenue stream was taxed pending completion of the renovation. Now he is in a position to worthwhile spend and he likely will. Tampa is a weird situation because the Glazer's used to spend but seemed to tire of it at a time that coincided with the end of Gruden's increasingly disappointing tenure and their involvement with premier league soccer. They'd have been well positioned to draft or sign a franchise QB about now, only it seems they have stumbled onto one inexpensively. As well as a HC and possibly the foundation of a winner. How much they decide to overspend at the risk of upsetting the applecart may become an issue for them now... Then of course there are the Bengals...but what they need to spend cash on is infrastructure like scouting.

The teams on Clayton's list aren't the teams you'd expect so that leads me to believe we don't yet have a clear understanding of whom or what this new formula will impact. Crazy Uncle Al has been spending like a fool of late, to no avail, even selling off shares of his team to raise capital. But he's just made a mess either way apparently heading into a new CBA... Meanwhile Buffalo and Cleveland aren't on the list. Maybe because all they were after was a pay as you go formula providing it gave them enough to... The JETS on the other hand have played fast and loose with the cap and cash and they appear to be caught in the middle of a squeeze...

Gene spent most of his 20 something year career as head of the NFLPA growing the % split to the players. He likely died uttering something about the number 6 or the number 5. He will roll over at a 4, so there must be something in it for ownership... Brandt says every % point represents roughly $100M. So in excess of $300M more for owners amounts to $10M more per team. Add to that a cap set at around $120M vs. the $140M or more it would have been by 2011 under the old CBA and you have a $30M swing. I know there won't be a billion off the top anymore, but that didn't get distributed to teams equally. It was funneled through the league and went to those who had stadium expenses like debt service on builds or renovations to account for. Many of the lower revenue teams don't have those... And there will still be some expensing of stadium costs according to reports only they will be handled on a case by case basis as opposed to via $$ off the top.

We just aren't going to know how it all works until we get a CBA done and implemented for a couple of seasons... But suffice it to say the win win spinning is already underway because perception matters so much to all parties in this deal... This can't be too good a deal for owners or two bad a deal for players - or visa versa - at first glance or it won't ever get done...

 

[SanAngeloState]

I guess I'm excited that they'll only miss a few games, if any.

I was kind of hoping for a union crushing all season long lockout, but it wasn't meant to be.

Now the pats better win the SB. No excuses. No more choking. 5 years in a row is enough.

 

[Rob0729]

Okay. So you are talking about teams moving large amounts of money around between years. That can certainly be done.

I incorrectly assumed that by "cheating on the salary cap" you meant spending more money overall than other teams are allowed to spend, not just moving salary cap space from one year to another year.

Can we agree that over a period of years the cash spent and the salary cap figures converge? Or are you saying that over a period of years the Tampa Bay Bucs spent less than they were required to, and they got away with it?

We seem to have a different perspective on the salary cap. I think of the salary cap as a device to prevent the sort of runaway spending that exists in baseball. Teams with more money will always have an advantage, and in my view, the major function of the salary cap is to restrict the degree to which they can use that advantage. As has been said, the salary cap protects the owners from themselves.

Flexibility in the salary cap, what you call loopholes, does not bother me. I see the cap as designed to prevent major abuse, not to put the clubs in financial straitjackets.

You seem to emphasize the "level playing field" aspect of it, and that does explain why you think that it is a "soft" cap, and some other things that you have said. I certainly pay less attention to the "salary floor" as a device to promote competitiveness than to the "salary cap." I had never thought about "cheating on the floor."

I used the Bucs' example because it is the most pronounced example of cap dollars and real dollars not syncing up. It is far easier to cheat the cap by cheating the cap floor than the cap ceiling. Part of the reason why I think the players were fighting the wrong fight, the owners were always offering the potential for more money just a smaller percentage. The 90% rule will put more money in the players pockets (as a whole) than if they kept the same percentage they had under the last CBA with no requirements on a minimum level of real dollars spent each year. Teams would have abused the cap floor more and more.

But you can cheat the cap in perpetude if you like under the old system. Like the national debt, you can just keep pushing money into the future and never pay it off. That is why Daniel Snyder could spend like a drunken sailor year after year without going into cap hell. In theory, it will always catch up to you, but in practice teams continually get more money by pushing money out.

 

[Rob0729]

Interesting. So was the salary cap floor also correspondingly raised in 2009 since they didn't meet it in 2008? Or do the rules allow them to get around the floor (and not push it into another year)?

I don't think the cap floor rises or falls with the adjusted cap, but that is more of question for Miguel or another person more familiar with the cap.

 

[Jackson 2]

I guess I'm excited that they'll only miss a few games, if any.

I was kind of hoping for a union crushing all season long lockout, but it wasn't meant to be.

Now the pats better win the SB. No excuses. No more choking. 5 years in a row is enough.

I'm not sure I've ever heard this team, or for that matter most of its fans, use excuses. And, I'm also not sure that choking is the term to describe recent play-off losses. How about the other teams we lost to were better that day? Is that so hard to accept?

 

[townes]

I'm not sure I've ever heard this team, or for that matter most of its fans, use excuses. And, I'm also not sure that choking is the term to describe recent play-off losses. How about the other teams we lost to were better that day? Is that so hard to accept?

Not to worry, he's not a football fan, just a hater.

 

[SanAngeloState]

I'm not sure I've ever heard this team, or for that matter most of its fans, use excuses. And, I'm also not sure that choking is the term to describe recent play-off losses. How about the other teams we lost to were better that day? Is that so hard to accept?

Well the jets weren't better than the pats...the ravens...well they weren't head and shoulders better like the game indicated. The giants? Colts? no and no. So that's 4 games blown, including one SB and one would be SB (we would have played the lowly bears). Very, very painful. Sickening.

 

[TruthSeeker]

I'm not sure I've ever heard this team, or for that matter most of its fans, use excuses. And, I'm also not sure that choking is the term to describe recent play-off losses. How about the other teams we lost to were better that day? Is that so hard to accept?

Well the jets weren't better than the pats...the ravens...well they weren't head and shoulders better like the game indicated. The giants? Colts? no and no. So that's 4 games blown, including one SB and one would be SB (we would have played the lowly bears). Very, very painful. Sickening.

Evidently the answer is yes, that is too hard to accept.

 

[Frick]

Spanky: If I give you 3 apples and I take back 1, how many apples do you have?

Stymie: I'll have 3 apples cause I don't give my apples to noooooobody.

(Little Rascals)

 

[plk]

But you can cheat the cap in perpetude if you like under the old system. Like the national debt, you can just keep pushing money into the future and never pay it off. That is why Daniel Snyder could spend like a drunken sailor year after year without going into cap hell. In theory, it will always catch up to you, but in practice teams continually get more money by pushing money out.

You are going to have to explain in detail what you are talking about before I am going to believe you. Saying that someone spent like a "drunken sailor" without getting into trouble does not explain anything. What was he doing?

Frankly, I don't believe you. I don't believe there is substantial cheating against the cap, but I would certainly be fascinated if you could convince me.

I can tell you that there is not cheating in the amortization of signing bonuses in case that is what you are thinking of.

The NFL, unlike MLB and NBA, does not, in general, have guaranteed contracts. Instead, they have signing bonuses, and those bonuses are the guaranteed part of the contract. On substantial contracts, players are essentially paid in advance, and the amortization assigns the money for salary cap purposes to future years as if it were a guaranteed contract. That is all that is happening.

Every dollar of a signing bonus comes off the cap space available to the team in one year of the contract or another. A team can keep giving signing bonuses, but each of them will reduce the cap space available to the team in the future. There is no magical creation of cap space. At the end of the contract, or when the player is released, it all adds up.

Say Team A signs player "a" for a signing bonus of 25 million for a five-year contract plus some yearly salary.

Team B signs player "b" to a contract in which the player is guaranteed, come hell or high water, a $5 million payment each year for five years, and the same yearly salary as player "a."

Let us say Team A and Team B do this year in and year out. Are you by any chance saying that Team A is cheating against the cap and "continually get[ting] more money by pushing money out?"

Surely you would not say that of Team B, but what they are doing comes to exactly the same thing.

As I said, I would be fascinated if you can demonstrate that teams are cheating in a substantial way against the cap. But you are going to have to explain to me how it works before I believe that you have anything.

 

[Joker]

I would be fascinated if you can demonstrate that teams are cheating in a substantial way against the cap.

as of right now, there is no cap...it doesn't exist...unless you insist , in your arrogant, condescending snotty punk way,that the previous agreement IS the soon to be signed new agreement.

Absent an agreement, one can only apply past indications or historical instances of cap cheating, in which case I suggest you read up on the SF 49ers ,Eddie DeBartolo and Carmen Policy.

 

[lamafist]

But you can cheat the cap in perpetude if you like under the old system. Like the national debt, you can just keep pushing money into the future and never pay it off. That is why Daniel Snyder could spend like a drunken sailor year after year without going into cap hell. In theory, it will always catch up to you, but in practice teams continually get more money by pushing money out.

Redskins did end up in cap hell a few times during Snyder's tenure, though.

Out of curiosity, I added up the Redskins total payroll during the ten seasons from 2000 to 2009 and compared it to the sum of the salary caps from that span. Turns out, the Redskins spent $885 million which came out to be slightly under the total cap number of $892 million.

And if the Redskins didn't spend over the collected cap during the '00's, it's unlikely any team did, I'd think.

I believe, though I'm not sure, that the rules policing the salary cap are harder to perpetually fudge than those at the bottom. For example, I'm pretty sure that any unlikely-to-be-earned incentives that do end up being triggered are counted against the following year's cap, whereas I'm not sure that LTBE incentives that aren't met are treated the same way.

 

[Shelterdog]

Redskins did end up in cap hell a few times during Snyder's tenure, though.

That's exactly right.

When a team is in salary cap hell it's not like they don't field a team; indeed they often add good players. It's just that they end up having bad teams and letting good players go, having no quality depth on the lines, having crap at special teams, and the like because Jeff George and Trotter and Archuleta and Deion are taking up a ton of cap space.

EDIT: What you can do is spend way above the cap for a short period of time by pushing cap problems to the future. You can generally sign a very good player for a low cap value in year one, but you're going to have to pay them sometime.

 

[MoLewisrocks]

That's exactly right.

When a team is in salary cap hell it's not like they don't field a team; indeed they often add good players. It's just that they end up having bad teams and letting good players go, having no quality depth on the lines, having crap at special teams, and the like because Jeff George and Trotter and Archuleta and Deion are taking up a ton of cap space.

EDIT: What you can do is spend way above the cap for a short period of time by pushing cap problems to the future. You can generally sign a very good player for a low cap value in year one, but you're going to have to pay them sometime.

A good example of that would be what Polian and Condon did with Manning's 2004 deal. He got $34.5M in signing bonus amortized over the first 6 years of a 9 year deal. He got minimum salaries in the first couple of seasons and and then double digit roster bonuses that were converted to signing bonus and spread over the remainder of the deal. His cap hits for the first 3-4 years of that deal were in the single digits (on a deal that averaged $14M per). The deal was voidable after 7 years but Polian was able to continue to dump money into those last two years because deals don't void until they officially void. Manning actually has several million in dead cap sitting in 2011 and 2012 that will count in addition to his tag or new deal as a result. His caps in the last 3 years of his deal were in the $19-21M range... The 2006 cap going up $16M and the cap going up $40M as a result of that deal between 2006-2009 really saved Polian's behind. Not to mention had they not gotten a deal done in 2006 and the rules of an expiring CBA gone into effect Polian would not have been able to convert Manning's (or Harrison's) remaining roster bonuses and those would have killed Indy's cap. At one point Polian threatened to sue the whole damn league if that happened. Then he got Manning and Harrison to agree to restructure their deals in the event no new CBA was achieved.

It's a lot like when simple folk run up credit card debt because they believe eventually they will get a much better job or win the lottery and take care of it. The dramatic increase in the cap from 2005-2009 was like a lottery windfall that saved several NFL credit card abusers from cap hell.

That is why I won't be surprised to see Manning signed to another 6-7 year deal. It's not that they expect him to play THAT much longer, it's that Polian long ago resigned himself to the fact he'd face a couple of seasons of dead cap when Peyton hang's 'em up. The team will tank then anyway so he doesn't care. Hanging on through a 15 year prolific QB's run was always the goal.

But that's not cheating the cap, it's just manipulating it. Cheating it is what Denver did to win those Superbowls - paid Elway deferred money under the table and off the cap...so they could afford to keep his surrounding cast in tact.