Why are free agency contracts so much lower this offseason?

[basement zombie]

From Reiss' ESPN Pats blog:

7. Not sure enough attention has been paid to how dramatically the market has been lowered for player contracts this year. When a top cornerback like Cortland Finnegan signs a deal averaging $10 million per season as a free agent last year, and this year's top cornerbacks feel fortunate to get half that, it is stunning to watch unfold. Remind me again how this is good for the players? I am already hearing that 2014 is likely going to be more of the same.

Why exactly are free agent contracts so much lower this offseason?
I have a lot of guesses but no clear likely answer.

 

[Hammer of Thor]

From Reiss' ESPN Pats blog:


Why exactly are free agent contracts so much lower this offseason?
I have a lot of guesses but no clear likely answer.

Because the players got completely hosed during the last contract negotiations and they're finally seeing the effects of it. There's a reason why the owners were thrilled that this was a 10 year labor agreement -- which is unprecedented in major sports leagues.

 

[basement zombie]

Because the players got completely hosed during the last contract negotiations and they're finally seeing the effects of it. There's a reason why the owners were thrilled that this was a 10 year labor agreement -- which is unprecedented in major sports leagues.

What are some of the specific elements of the new contract that contribute to this?

 

[signbabybrady]

From Reiss' ESPN Pats blog:


Why exactly are free agent contracts so much lower this offseason?
I have a lot of guesses but no clear likely answer.

there still has been some silly money thrown around mainly the Wallace and Harvin deals but cleary its down.

i would point to three things.

the obvious part being the cap didnt go up and wont go up much next year either.

also i think it cant be ignored how many solid DBs were on the market it clearly cooled an area that usually has high salaries. You think Talib wouldnt have been offered more if 5 or 6 DB spots werent filled before he signed?

i will throw one more thougt out there. the NFL sanctioned 2 of the leagues biggest spenders in Dallas and Washington leaving them real tight to the cap.

 

[Nehalem]

I think its more a result of there being a large number of contracts that were written under the old CBA(or failing to understand the new rules), and with the shrinking of the pot for players new contracts now have to come in lower to counteract the bigger contracts from before.

Basically this is the first year with contracts written under a flat-cap doctrine and they have to be lower than they should be to counteract the years of contracts written assuming a growing-cap.

 

[Hammer of Thor]

What are some of the specific elements of the new contract that contribute to this?

Well, I don't have the exact specifics (although I'm sure a google search could find stuff quickly if I weren't lazy today....) but essentially the players went from receiving 59% of the revenues to closer to 52%. That simplifies it -- they actually agreed to a different tiered revenue structure, but at the moment that's how it's netting out.

The reason why I say they screwed themselves is that they agreed to these cuts at a time when NFL revenues were never higher and growing at an extremely fast pace. The owners weren't in dire financial straights. Of course, the players didn't have public opinion on their side this time, with the non-NFL economy being poor, so that didn't help their cause.

 

[DaBruinz]

Well, I don't have the exact specifics (although I'm sure a google search could find stuff quickly if I weren't lazy today....) but essentially the players went from receiving 59% of the revenues to closer to 52%. That simplifies it -- they actually agreed to a different tiered revenue structure, but at the moment that's how it's netting out.

The reason why I say they screwed themselves is that they agreed to these cuts at a time when NFL revenues were never higher and growing at an extremely fast pace. The owners weren't in dire financial straights. Of course, the players didn't have public opinion on their side this time, with the non-NFL economy being poor, so that didn't help their cause.

The 59% had many many more deductions for the owners than the current structure. So it wasn't a true 59%.

Actually, NFL revenues weren't growing at an extremely fast pace. If anything, they were starting to slow down at the time and finally catch up with the NON-NFL Economy.

The other thing is that they got increased benefits out of this deal. So, to say they are only getting 52% of the revenue isn't entirely true either.

I think that contracts are down because of the number of high priced players whose play dropped off so dramatically after they signed the ridiculous contracts. I mean, Asomougha, Hall, Robinson and Ross all got cut. That was huge contracts that will actually cause next year's franchise number for CBs to drop slightly.

Plus I think that we're finally seeing the payscale adjustment happen for the new CBA. The Cap has been, essentially, flat for the last 3 years and it will be so again next year before jumping in 2015. And that 2015 jump is thanks to the new TV contracts. What's going to be interesting is to see whether or not some company other than DirecTV steps up on Sunday Ticket or if the NFL is going to take control and do it ala carte, making it available to all Cable and TV providers..

 

[resdubwhite]

has to be the over spending in previous years hoping the cap was going to go through the roof. Teams like the Jets, Ravens and Steelers were tight up against it as a result.

probably led to a more convservative approach this year. once a lot of these contracts are nullified expect a mini incrrease coming up.

 

[eom]

From Reiss' ESPN Pats blog:


Why exactly are free agent contracts so much lower this offseason?
I have a lot of guesses but no clear likely answer.

I think you're kind of asking 2 questions --- the more general question, plus the specific cb market.

this is the yearly cap from wiki:
2013 $123 million
2012 $120.6 million
2011 $120 million
2010 Uncapped
2009 $123 million
2008 $116 million
2007 $109 million
2006 $102 million
2005 $85.5 million
2004 $80.582 million

under the last 5 years of the old cba the cap grew ~50%, and contracts were written with the expectation of inflation.
if you look at the more recent few years, you'll see that there's been no growth, so the teams can't fit these backloaded deals under a cap that's the same as it was when many of them were signed ---- players get cut.
even if some guy isn't a victim of this, specifically, he might be a victim of the team shoehorning his teammate under the cap, and let's bear in mind, the last few years players have been negotiating based off figures from previous inflationary years.

also, as a poster mentioned, dallas and washington have been capped out this year, and al davis died, which nerfs 3 of the crazy money bidders.

in particular, there's been a glut of cornerbacks on the market this year, making it a buyer's market and depressing the prices at the position.

 

[convertedpatsfan]

This is a pretty good explanation of the flat cap that we should see over the next few seasons:

NFL - Soaring revenues won't coincide with salary-cap growth - ESPN

Note the date of the article: March 28, 2012. This probably wasn't even the first article written about the topic. Kraft was one of the first (if not the first) owner to openly talk about a flat cap last spring, and the team has been preparing for this for a while now.

I believe it is a big reason why they didn't get a deal done with Wes last summer, as the franchise tag would only affect them for one year and not impact their spending ability during the flat cap period. They weren't willing to compromise their flexibility during this time with a longer-term deal unless it was for the right number.

This is more or less what the FO has been expecting. Yes, we lost Wes, but it's not as if our offer wasn't right in the ballpark. We gambled on Talib and he didn't find the offer he was looking for. Vollmer is still out there but the market is starting to dry up. And the real deals are going to start coming in the next week when players start getting desperate just to have a job.

 

[DropKickFlutie]

This is a really great point and very important to note.

Last year receivers and corners were getting contracts much higher than free agents are getting this year. The market is down. The cap didn't go up a ton, and the effects of the new crap labor deal for the players is now happening.

This is completely relevant for the Welker discussion. People say Welker was greedy and that look at how the Pats correctly judged Welker's market value. I think the Pats got lucky in that this year was a down market for all players. Welker wasn't greedy, he remembered what the market was like last year and thought he should have been paid that during these contract negotiations. The mistake was him and his agent not realizing it was a totally different market this off-season.

 

[Miguel]

One more possible reason is that while the 2003 cap is the same as the 2009 cap the minimum salaries for players have gone up.

Examples - the minimum salary for a rookie in 2009 was $310K. It is now $405K

the minimum salary for a 3 year vet was $535K. It is now $630

 

[patsfan-1982]

defensive contracts are down because its a new pass happy NFL big play WR's and QB's are still geting top dollor

 

[mgteich]

I agree.

Teams made poor bets that the cap would go up at a high percentage rate. These estimates were made over the last 3 years, as these team ASSUMED that the caps would increase significantly under a new CBA. Even when the CBA was signed, many teams could do the analysis.

For those who don't understand, let me repeat a fact from another post. This year's cap is the same as 2009. I would note that next year's is now expected by almost all to be close to the same as this year.

CONCLUSIONS

A) Teams are reluctant to bet on a huge rise in the cap in the next four years.

B) The players did get hosed. The owners got their new TV and player deals. The players got NO INCREASE in cap over the last four years.

has to be the over spending in previous years hoping the cap was going to go through the roof. Teams like the Jets, Ravens and Steelers were tight up against it as a result.

probably led to a more convservative approach this year. once a lot of these contracts are nullified expect a mini incrrease coming up.

 

[eom]

I agree.

Teams made poor bets that the cap would go up at a high percentage rate. These estimates were made over the last 3 years, as these team ASSUMED that the caps would increase significantly under a new CBA. Even when the CBA was signed, many teams could do the analysis.

I think that's kind of unlikely -- sounds more like players and agents were willing to accept the cap steadily increasing.
teams got these guys under contract, had a few years to draft cheaper, younger replacements, then when the bloated last year of the deal rolls around the teams cut the guy, or ask him to take a pay cut.

the smarter players/agents probably got their money up front.

 

[goheels22002]

A major factor is that the Patriots have been winning for more than a decade and they have done so with extraordinary discipline financially that is now not so extraordinary. Other teams are assigning specific financial values to position groups as the Patriots have since 2000.

When teams gorge in free agency they do long term damage and everybody gets fired. The Redskins, Eagles, Cowboys, Jets, Bears, etc, etc have tried and failed.

Big salaries in free agency have not returned on the investment. That goes for cornerbacks and receivers more than most positions.

 

[ausbacker]

Sooner or later markets make corrections.