OK, this is for any lawyer types out there.
This is taken from
http://www.nflpa.org/cba/cba_pdf/Ar...lary,_Salary_Cap,_and_Minimum_Team_Salary.pdf
I'm not even going to begin to try and decipher....
I believe this says the following:
In addition to the salary cap, a new threshold is established equal to the league-wide salary cap plus 2% of league-wide gross revenues.
If the league as a whole exceeds this threshold, all the clubs which individually exceed their share of this threshold (1/32th) will have their future salary cap reduced.
If the league as a whole falls short of this threshold, all of the clubs which individually fell short will have their future salary cap increased.
Let me use a concrete example to illustrate.
Suppose at the end of the year, 24 clubs exceed the threshold by a total of $100M, while 8 clubs fall below the threshold by a total of $25M.
In total, the league exceeded the threshold by $75M. Clubs which spent less than the threshold will have no adjustment. Clubs which spent above the threshold will have their future salary cap reduced by 75% of the amount by which they exceeded the threshold ($75M is 75% of $100M). This reduction will be spread out evenly over each remaining capped years (i.e. 15% of the excess in each year from 2007 through 2011).
In future years additional accounting mechanisms will kick in to allow past league and club shortfalls to offset future league and club excesses.
For the Patriots, Suppose that BB believes that both the league and the Patriots will be over the threshold, and that the 75% ratio mentioned above is a reasonable estimate. Then each additional dollar spent this year will result in a 15 cent penalty in each of the subsequent five years. Tricks that the Patriots have traditionally used to move salary cap into future years, such as unlikely to be earned incentives, will be counted towards this year's penalty calculation.
With the Patriots reported to have a bit more than $3M in cap room, and at least two million of that set to be eaten by Unlikely to be earned incentives, I have a hard time begrudging BB that last million. Especially if a large percentage of it (75% was just a random guestimate) would have turned into a penalty applied in future years.