Several weeks ago, a variety of remarks emerged from influential NFL owners, like Pats owner Robert Kraft, regarding the future of the salary cap under the new CBA. And it painted a not-so-pretty picture for players who are under the impression that it will continue to increase — and that it will spike significantly when the new TV deals kick in.
The talk culminated in NFLPA president Domonique Foxworth vowing to “crunch all the numbers.” All the numbers apparently have been crunched.
The NFLPA has taken the message directly to the players via a two-page document entitled “The Economic Truth About The New NFL CBA.”
The first page begins with an all-caps message that “contrary to recent statements by some NFL owners, the claim that player salaries are flat or are going to remain flat under the CBA are wrong.”
Following that are four bullet points, although the fourth one is an exact duplicate of the third:
1. “The amount of cash spent on players in salaries an benefits under the new CBA has gone up to nearly 55 percent of All Revenue in 2011. This is a higher percentage of All Revenue spent on players in cash than in any year under the 2006 CBA.”
2. “Players were paid more than $160 million per team in cash and benefits in 2011, which is well above the $142.2 million in cap plus benefits in 2011, i.e., a lot of cash over cap.”
3. “Equally significant, because of the increase in signing bonuses in rookie guarantees, the amount of player salaries guaranteed in 2011 increased from about 50% in 2010 to about 57% in 2011. This is the highest percentage of guaranteed compensation the NFL players have ever had.”
The second page contains two paragraphs: “The reason for this large increase in cash spending on players is that the new CBA emphasizes and requires cash spending by teams, as opposed to just salary cap dollars. It also removes the mechanism in the old CBA to lower the salary cap when teams spend too much cash above the salary cap. The result is that the new CBA delivers a higher percentage of revenues to players in cash than the old CBA and salaries have gone up — not remained flat — under the new CBA.”
And: “The 47% player share referred to by the owners and others is in cap dollars — which is an accounting mechanism. In real cash dollars, which go into the players’ pockets, the new CBA has so far provided a higher percentage of revenue, a greater percentage of guaranteed money, and more actual dollars, than in any year of the 2006 CBA.”
Here’s our objective assessment of the two-page document:
1. Ultimately, there’s no difference between salary cap dollars and real dollars. Every dollar paid to a player eventually hits the salary cap. The fact that, collectively, the teams spent over the cap by more than 10 percent per club in 2011 means that, eventually, that excess will be reflected by decreased spending, since fewer cap dollars will be available as the cash-over-cap hits the cap.
2. The two-page document says nothing about future cap growth. And therefore it does nothing to refute the contention by multiple owners, like Robert Kraft, that the salary cap will grow only slowly over the next several years.
3. The increased use of guaranteed salaries is significant, but in many cases the salaries being guaranteed are salaries that were going to be paid anyway. For example, when a player receives an eight-figure signing bonus and fully-guaranteed first-year base salary, there’s no reason to guarantee the first-year salary because it’s going to be paid with or without a guarantee. And for the first-rounders who now receive three or four years of fully-guaranteed compensation — under a much more limited compensation formula — the chances of any of those players being cut within the first three or four seasons already were slim, to say the least.
4. The best news for players, which isn’t mentioned in the document, is that as of 2013 each team must spend in cash 89 percent of the unadjusted salary cap. This means, of course, that there was and is no spending minimum per team in 2011 and 2012.
5. The document also omits reference to or explanation of the union’s decision to agree to remove $46 million in total cap dollars from two teams that like to spend money (the Cowboys and Redskins) and redistribute it to teams that may or may not spend it.
Here’s the bottom line as to, well, the bottom line. Both sides should feel good about getting a deal done that creates an atmosphere (at least financially) or a true partnership. And the NFL should refrain from saying or doing anything to suggest that the deal isn’t as good as the players think it is. The league should want the players to be happy with the deal, and the players should want the league to be happy with the deal. That’s how a true partnership is supposed to work, and that attitude will help avoid having the NFL slip into lockout or strike status come 2021.