Schefter reveals the framework of the new deal

[Ring 6]

How do you figure Brady's cap number as 20 million?

Poor in my head math. Still, the point would be the same

 

[Ring 6]

I think that it will be.
Dead money counted against a cap floor.
The use of the in-season LTBE incentive counted against a cap floor. Remember Vince Redd having $3 million plus cap number in 2008 because of a LTBE incentive or Kyle Eckel having a $6 million cap number in 2007 for the same reason.

It could be but there is a big difference between cash cost and cap floor.
By the way, the LTBEs were never, to my knowledge, used to hit a cap floor, they were used to open up money on next years cap, which actually helps the players to make more money. (The 3mill used up this years cap room so it could be pushed forward to next year, not to artificially hit a floor)
The dead money would be counted in either case, as under a cash cost calculation it wouldnt be dead, it would have been counted when paid.

In any event, my point was the cash cost approach isn't doing anything to guarantee 'cheap' teams spend more money on players than a cap floor did.

 

[Ring 6]

"Dead money" will still work the same way w/r/t to cap figures, but does not figure into calculations of cash figures.

I don't know what the exact salary floor was in 2009, but the cap was $127 million and the Chiefs were paying $82 million, or 64% of the cap, in actual payroll. 7 teams were paying less than 75% of cap value in actual payroll. All but two of those teams were in the bottom half in terms of cap number -- so it's not like their actual payroll was being constrained by 'cap hell.'

You cannot compare the 2 numbers, its apples to oranges. Look at it this way. The cap number is made up of this years salaries plus this years portions of the signing bonus amortization. This years payroll cost is this years salaries plus this years total signing bonusses.
For cap purposes a 40 mill bonus on a 5 year deal is 8 mill a year. For cash its 40mill then zero.
The payroll cost varies widely per team from year to year even if they are maxing out the cap. For every large bonus I pay this year, I am less able to pay one next year because of the cap, so my payroll cost goes down because it has to as I am capped partly based on what I previously paid in bonusses.
Also, dead money, while it is real money spent hits the cap all at once, but counts zero toward payroll expense.
There are just too many variables and factors to intermingle the numbers and find meaning in them

Even if the cap would have been dropped to $120 under the new rules, with a cash floor close to 100% of the cap, as reported, that's almost a quarter of the league that would need to increase actual payroll by $25-40 million.

But that would have to also result in not handing out big contracts. Its very possible that a team could not possibly hit the cash cost minimum without exceeding the salary cap, so I have a feeling the rumor of a cash cost floor at 90% of the cap is not a good one.

 

[Ring 6]

Using your example Brady's cap hit would be $16M ($10M year 1 salary + $6M in amortized signing bonus of $30M divided by 5).

The logical reason a cash cap minimum at say 95% could be less than a 90% cap minimum would be the tradeoff of a reduced cap as a result of the pie being split 52/48 vs. 49/51 or 40/60 after the expense deduction of whatever. And they did say there will still be some expense deduction related to stadium construction.

Yeah, bad quick math.

I dont mean less than previous years, I mean you could have payroll expense at or over the cap, and still be far, far under the cap.
This years payroll equals this years salaries plus bonusses paid out this year.
This years cap equals this years salaries plus this years amortized share of all bonusses paid in all years.

A payroll expense at 95% of the cap could give you a cap number of 120% or 60% of the cap, depending on the bonusses and when they were paid.

The argument was a cash floor would cost owners more than a cap floor did, and that is neither correct or incorrect, it could have either impact, at the same time for different teams.

 

[Miguel]

It could be but there is a big difference between cash cost and cap floor.

My point exactly.

By the way, the LTBEs were never, to my knowledge, used to hit a cap floor,

Teams are not going announce that. Heck, teams do not even announce the LTBE moves. Could the LTBE move have helped teams reached a cap floor? I say yes.

In any event, my point was the cash cost approach isn't doing anything to guarantee 'cheap' teams spend more money on players than a cap floor did.

Then why the change in approach?

 

[Miguel]

BTW, the owners did not meet the floors set in the previous CBA.

This is what happened in the past.
The cap is announced and then a couple of months later it is adjusted upwards because of the CAM mechanism.
Monday Money Matters | National Football Post

See Appendix P of the CBA for more information on the CAM mechanism.

Examples
NFL salary cap rising by $7 million for 2008 season - NFL - ESPN

The 2008 cap actually ended up being $116,729,000

The 2007 cap was announced to be $109 million - ended up being $109,134,000.

NFL salary cap rises $12 million to $128 million for 2009 - ESPN
The 2009 cap was close to $5 million higher than projected.
The adjustments were triggered after spending on players fell below 59.5 percent of the league's total revenue in 2008.

 

[PatsFanInVa]

This is fantastic news. If there weren't a 2011 season, Ryan Mallett would have twice as much competition for ROY next year

 

[Ring 6]

My point exactly.



Teams are not going announce that. Heck, teams do not even announce the LTBE moves. Could the LTBE move have helped teams reached a cap floor? I say yes.

Weren't the LTBE incentives used in season? Teams would have to be over the floor to start the season.
Are there really any cases of teams just barely making it over the floor.
You would know the facts better than me, but this seems like a hypothetical manipulation of the system that was never really used, sort of a conspiracy theory.

Then why the change in approach?

We don't know that. But to assume it is because it will force lower revenue teams to spend more money is a big stretch. It could turn out that way, but there is no certainty of that at this point.

 

[Ring 6]

BTW, the owners did not meet the floors set in the previous CBA.

This is what happened in the past.
The cap is announced and then a couple of months later it is adjusted upwards because of the CAM mechanism.
Monday Money Matters | National Football Post

See Appendix P of the CBA for more information on the CAM mechanism.

Examples
NFL salary cap rising by $7 million for 2008 season - NFL - ESPN

The 2008 cap actually ended up being $116,729,000

The 2007 cap was announced to be $109 million - ended up being $109,134,000.

NFL salary cap rises $12 million to $128 million for 2009 - ESPN
The 2009 cap was close to $5 million higher than projected.
The adjustments were triggered after spending on players fell below 59.5 percent of the league's total revenue in 2008.

Those issues don't mean teams were under the floor. They couldnt be by rule.
Again, you have forgotten more about this than I know, but those adjustments are made when actual results exceed projected. I find it very different to say revenue was higher than expected and the cap was raised than to say teams were below the floor.
Also, could you please clarify the relation between 59.5%, the cap, and the individual teams floor?

 

[ralmat55]

One thing I can see developing with a hard cash floor being in place is teams moving away from the bonus structured contracts now used to contracts structured around guaranteed money instead. The owners would have been smart if they had negotiated in some limits as the length and amounts of guarantees a contract can contain. Say, no contract could be guaranteed for more than 3 years at the average annual salary of the entire contract. Otherwise, I can see the NFL going the way of baseball & the NBA. De Smith and the players might have found a way to back-door guaranteed contracts into the NFL.

 

[Shelterdog]

Any word on what happens to dead money for guys like Bob Sanders and all the players the Jets cut?

 

[Ring 6]

Any word on what happens to dead money for guys like Bob Sanders and all the players the Jets cut?

That wont change.
The discussion here is that without changing the way the cap works at all, there is talk that instead of also having a floor to the cap (I think someone said it was around 87% of the max) there will be a minimum cash outlay for payroll.
That is a totally different calculation than the cap, and would do nothing to change the way cap numbers are calculated.

 

[Ring 6]

One thing I can see developing with a hard cash floor being in place is teams moving away from the bonus structured contracts now used to contracts structured around guaranteed money instead. The owners would have been smart if they had negotiated in some limits as the length and amounts of guarantees a contract can contain. Say, no contract could be guaranteed for more than 3 years at the average annual salary of the entire contract. Otherwise, I can see the NFL going the way of baseball & the NBA. De Smith and the players might have found a way to back-door guaranteed contracts into the NFL.

I don't know how that could be the case.

Basically, what we are talking about here is that there is a rumor that aside from the salary cap, there has always been a floor, that is while you can't go over the cap you also can't be under it by more than where the floor is set, and they may change the way they calculate the floor.
Some have speculated that means more money for the players. I don't think there is conclusive evidence that this would be the case if the such a change actually happens.

Again, this is still a rumor.

 

[Shelterdog]

That wont change.

Thanks. How do you know that?

 

[lamafist]

I don't know how that could be the case.

Basically, what we are talking about here is that there is a rumor that aside from the salary cap, there has always been a floor, that is while you can't go over the cap you also can't be under it by more than where the floor is set, and they may change the way they calculate the floor.
Some have speculated that means more money for the players. I don't think there is conclusive evidence that this would be the case if the such a change actually happens.

Again, this is still a rumor.

I don't believe anyone is suggesting this. The players, collectively, were allotted 51.3% of all revenue under the '06 CBA, and under the proposed CBA, they will be allotted 48%. That's less money for the players.

What people have been speculating is that the combination of establishing a cash floor and raising said floor to close to 100% of the cap could mean more money or negligent savings at best for the franchises that habitually had cap figures well under 90% of the cap, and actual payrolls between 60-70% of the cap.

Basically, dropping the salary cap gives is mostly a relief to the teams that were routinely up against it, whereas the teams that were more often skirting the minimum are going to be more affected by the raising of the floor.

 

[Ring 6]

I don't believe anyone is suggesting this. The players, collectively, were allotted 51.3% of all revenue under the '06 CBA, and under the proposed CBA, they will be allotted 48%. That's less money for the players.

What people have been speculating is that the combination of establishing a cash floor and raising said floor to close to 100% of the cap could mean more money or negligent savings at best for the franchises that habitually had cap figures well under 90% of the cap, and actual payrolls between 60-70% of the cap.

Basically, dropping the salary cap gives is mostly a relief to the teams that were routinely up against it, whereas the teams that were more often skirting the minimum are going to be more affected by the raising of the floor.

Poor wording for sake of brevity. I meant to say that some are suggesting this will cost low revenue teams more money.
How can they establish and raise at once?
I do not know of ANY franchises that habitually had cap figures well under 90% of the cap. Can you show me where you get that from?
The same with teams habitually spending 60-70 of cash to cap. Can you show me that? Since cash to cap varies so widely based upon signing bonusses please do not give single year examples but those that were continual.
They are specifically dropping the salary cap. They are reducing the percentage of revenues that must be paid to players. There is a difference.

 

[Ring 6]

Thanks. How do you know that?

Because there hasn't been any mention, suggestion or thought of not continuing the salary cap system.

 

[Shelterdog]

Because there hasn't been any mention, suggestion or thought of not continuing the salary cap system.

I agree they'll keep the concept of dead money, but whether teams get a fresh start or not is another question. The Jets and Colts cut a ton of guys in February after the 2010 season to try and accelerate their dead money from 2011 to 2010-wil it work? I haven't seen it addressed one way or the other.

 

[Ring 6]

I agree they'll keep the concept of dead money, but whether teams get a fresh start or not is another question. The Jets and Colts cut a ton of guys in February after the 2010 season to try and accelerate their dead money from 2011 to 2010-wil it work? I haven't seen it addressed one way or the other.

No one has even suggested a 'fresh start'. That would be kind of impossible anyway. If you don't count dead money then you cant count the amortization of signing bonusses either. The expenditures of the past and their cap ramifications have to continue into the future. If anything else were even whispered it would be the lead point in any discussion about the negotiations.

 

[MoLewisrocks]

One thing I can see developing with a hard cash floor being in place is teams moving away from the bonus structured contracts now used to contracts structured around guaranteed money instead. The owners would have been smart if they had negotiated in some limits as the length and amounts of guarantees a contract can contain. Say, no contract could be guaranteed for more than 3 years at the average annual salary of the entire contract. Otherwise, I can see the NFL going the way of baseball & the NBA. De Smith and the players might have found a way to back-door guaranteed contracts into the NFL.

Teams have actually been moving away from that structure for a couple of years now since the Lelie and Vick decisions limited recoverability of signing bonus. Although reportedly one of the things owners wanted in this CBA that most players don't object to (although the NFLPA tended to object in principle) is language allowing for recovery of a portion of bonus money paid to total screw ups. I think the league is also proposing that rookie deal signing bonus money be earned incrementally and not paid out entirely up front. But the cap and an ability to maneuver or manipulate it dictates it remain in play.

Once rookie contracts are limited, the elite veterans will be the ones getting the lions share of signing bonus and/or actual guaranteed money in extensions or as FA. They often see in excess of half of their money implicitly guaranteed in one way or another now as is. But they are a minority. I don't think you will see anyone ever get it all guaranteed. And the majority of players beneath that elite level will continue to see just a more realistic fraction of their deals guaranteed. Generally that's been in the 20-30% range on longer deals or the first couple of years of a shorter term deal. The nature of the beast dictates they can never go fully guaranteed (which would be against cap, skill or injury) due to roster size and the violent physical nature of the game in comparison to other leagues. Teams have upwards of 80 players under contract over the course of a season.

Andrew Brandt commented that he feels teams who pay as they go, which has always largely been the disciplined path of choice in NE under BB, will fare best under the new rules. Those who opt to play cap roulette or mortgage the future in an effort to take advantage of perceived windows won't. But for some time now that's been the case.

That's why I chuckle when I hear a clown like Felger who has ripped Kraft for being cheap waxing poetic yesterday about how he thinks Kraft is shifting from hawk to consiliator (which he's always been) over the course of the lockout and that signals the NEP will seize some opportunity all of a sudden to throw caution to the wind and spend for the Brady window... He doesn't get that we could always afford to overspend but have largely chosen not to for a reason...that's not how the value system works here nor is it how you win in this league consistently. Here it's about assembling a team like a mosaic that encompasses sufficient skill and football instincts as well as abundant character, drive, coachability etc...

And I have a feeling based on what Brandt said about CAM that the cash floor will now simply replace the cap floor and and shortfalls will be determined league wide at the end of ensuing seasons and result in adjustments to future cash spending minimums. If the league as a whole spends enough to satisfy the minimum, there will be no need for adjustment. Those adjustments didn't amount to much annually except for in 2009 apparently when there was no where left to spread them because of the expiring CBA and the uncapped 2010 season. Otherwise the increases were divided over the remaining period of the existing CBA. If this is a ten year CBA I don't think it will create a huge problem at least in the near term. And a lot can transpire in 10 years to change the have/not landscape.