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“Cash over cap” is a short-sighted way to justify spending sprees

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With more and more teams dealing with real cap issues, agents who are eyeballing major paydays for their clients are trying to shrug their shoulders when it comes to the struggles of teams to fit their players under the annual spending limit.

Last year, the favorite argument of agents trying to score major paydays in free agency was that the cap eventually will spike.  This year, more and more agents and teams are accepting the reality that the cap won’t spike, but smooth.

Indeed, the NFLPA doesn’t want the cap to ever spike, since a spike would be unfair to the players who did long-term deals under a lower cap in the prior year.  The union instead prefers a “smoothing” of the cap, with steady, gradual, predictable growth.

This year, agents are trying to get teams (and the media) to ignore the realities of a hard year-by-year cap by arguing that teams routinely spend cash over the cap.  And some in the media (including those who may or may not be represented by one of the biggest player agencies) are pushing the idea that, even in a capped environment, teams can spend whatever they want to spend.

That’s true.  With a major caveat.  Every dollar spent now eventually must be accounted for under the salary cap.  And if the cap will only be growing by, for example, 1.9 percent in 2013, pushing too many cap dollars into the future will eventually force teams to make tough decisions.

For example, the Saints went “cash over cap” last year by paying quarterback Drew Brees a total of $40 million, even though his cap number was nearly one fourth of that, at $10.4 million.  But the remaining $29.6 million will hit the cap later.

For Brees, the piper will be paid in 2015, when the Saints will carry a $26.4 million cap number for a 36-year-old quarterback.  The next year, the cap number will be $27.4 million.  Even if there’s a “restructuring,” those dollars will still hit the cap, eventually (unless Brees agrees to reduce his salary in either year).
At some point, Brees’ naturally declining skills and his artificially increasing cap number (thanks to “cash over cap” paid in 2012) will intersect, and the team will decide that Brees’ talent no longer justifies the investment.  In those situations, the extra cap space tied to cash paid over the cap in past years will make it harder to justify keeping the player around.

Absent a renegotiation of Tom Brady’s contract in 2015 or beyond, the Patriots won’t face that issue, since his cap number will be $13 million, $14 million, and $15 million, respectively, in the final three years of his current deal.  Which is likely one of the main reasons why, at least for now, Brady agreed to a deal that dropped his cap number from $21.8 million down to $13.8 million.

In response to Brady’s new contract, which ultimately reflects the realities of the cap in a “smoothing” environment, get ready to hear more arguments about “cash over cap” in the coming days, as agents try to hypnotize teams into thinking that money spent over the cap now disappears into the black hole of future cap increases.

The simple truth is that each and every dollar spent by a team on a player compensation hits the cap, whether in the current year or in a future year.  When the cap was jumping by 10 percent or more per year, that didn’t matter much.  Now that the cap is creeping, it becomes a bigger problem for cap-strapped teams.

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24 Responses to ““Cash over cap” is a short-sighted way to justify spending sprees”
  1. ridingwithnohandlebars says: Feb 27, 2013 8:59 AM

    Isn’t that the same Drew Brees contract that you were saying a few days ago that the Ravens should model Flacco’s deal after? I want an explanation!

  2. iamapatsfan says: Feb 27, 2013 9:00 AM

    Obviously it’s short-sighted, but the agents don’t care, they are trying to get paid, or rather, get their players paid now.

    One would hope that most NFL GMs would be wise to this, hopefully, and not crush his team’s future on the now. At the very least, it’s selfish, since if they screw the future, they are going to get fired in that future when they can no longer manage the cap.

  3. eagleswin says: Feb 27, 2013 9:06 AM

    Tom Brady is making more actual dollars today by lowering his cap hit in the future. $30 mill signing bonus. If he actually plays out the extension without it being renegotiated then I will admit he took a discount but to date, despite all the positive press Brady get’s, he has yet to give the Patriots a discount even once. They just keep extending his cap hit and let the media fall over themselves talking about how great Tom Brady is.

  4. jagsfan1 says: Feb 27, 2013 9:09 AM

    Are they capping Roger’s salary?

    No?

    I didn’t think so.

  5. bigredgoog says: Feb 27, 2013 9:17 AM

    “some in the media (including those who may or may not be represented by one of the biggest player agencies)”

    You learn something every day. Have never heard this before. You would think a reporter might mention the appearance of conflict.

  6. mullman76 says: Feb 27, 2013 9:25 AM

    Just the pats sticking it to the other 31 teams, one way or the other.

  7. irisht53 says: Feb 27, 2013 9:27 AM

    @ rigingwithnohandlebars

    The difference between the Brees deal and the Flacco deal is the age of the QB. In 2015, Flacco will be 30/31, in the middle of his prime. If a team believes he’s an elite QB, there should be no problem paying him that amount. So the structure for Brees’ deal make sense for the Ravens for Flacco’s deal.

  8. boogerhut says: Feb 27, 2013 9:29 AM

    Weeeeeeeeee… Sorry, that was my ears ringing. All I heard/read was Agents..weeeeeee.Agents…weeeeeee. Agents…weeeeeee. What other parasite exists solely to extract 10% of the life from it’s host? Mosquitoes? Nope they take a few drops. Leeches? Same. Both can bleed you out if numbers are sufficient but AGENTS? It take one. How’s this: Sir I will pay you “this much to play for this long”. YOU keep that extra 10-15%, I honor the agreement and boom. No more leeches.

  9. classyjacklambert says: Feb 27, 2013 9:31 AM

    The way players are let go of or injured today… cash-in-hand is always the better option it seems.

  10. tcostant says: Feb 27, 2013 9:42 AM

    Easy fix – 18 regular season games. More games / more TV $$$ / more cap space.

  11. pixelito says: Feb 27, 2013 9:50 AM

    Or if you’re little Danny Snyder, try to cheat the cap.

  12. uwsptke says: Feb 27, 2013 10:11 AM

    The hard reality that Saints fans will have to face is that their window with Brees has two seasons left, maybe three if the “restructure” 2015 and push off the inevitable one more year. They definitely need to start looking for that developmental QB soon.

  13. larryboodry says: Feb 27, 2013 10:15 AM

    First of all, they shouldn’t call it a ‘salary cap,’ since salaries are still obscenely high for elite players…What we have is a ‘team spending cap’ which inherently hurts teams fortunate enough to have a surplus of good players.

    A true salary cap would involve placing a limit on how much any player could earn in a single season, say $10 million, with most players earning less…There would still be a team spending cap as well, which would operate much like it does now.

    So for instance, Joe Superstar gets signed to a 4-year, $40 mil contract…$10 mil a year, period. And each team, even if they still can only spend, say, $120 mil total, gets to stay competitive from one year to the next.

    And of course the NFLPA would never in a zillion years agree to this, even though it would benefit the players in the long run, since all teams would be more able to bid on free agents…The way it is now, the good team a player really wants to play for may not be able to afford him, while a lousy team with spending room will scoop him up.

    I know I rambled here, and probably missed some key points, but the current system, to me, is skewed too much in favor of owners who are just as happy at 5-11 as 11-5, so long as enough fans show up on Sundays.

  14. getyourownname says: Feb 27, 2013 10:34 AM

    “Are they capping Roger’s salary? No? I didn’t think so”

    Apples and oranges. Owners are allowed to pay Roger whatever they want. They do not have such freedom for players under the NFLPA agreement cap. $30MM for Roger is less than $1MM per team, or slightly more than the 10-year vet minimum.

    Not exactly shocking agents are trying to get clubs to spend as much upfront as possible. When has this NOT been the case? Besides, if their guy gets a huge paper contract but is cut next year, the agent probably isn’t hurt, he can rep another player. Former players, not so much.

    Unfortunately, management of some teams never seem to learn. They know they are judged by 2 or maybe 3 year results anyway.

  15. wikidpissah says: Feb 27, 2013 10:40 AM

    eagleswin says: Feb 27, 2013 9:06 AM

    If he actually plays out the extension without it being renegotiated then I will admit he took a discount but to date, despite all the positive press Brady get’s, he has yet to give the Patriots a discount even once.
    ———————————————

    Not true. Besides the discount in years 3-5 of this contract, in 2005 Brady signed a 6 year $10M per year deal, $4M under P Manning’s rate. He was very clear that he took less to enable the patriots to spend more on others.

    By the way, Giselle wasn’t in the picture in 2005, so it wasn’t because she brought in millions.

  16. maestro1899 says: Feb 27, 2013 10:40 AM

    This is nothing new. This is ALWAYS how it’s been.

    Why is Florio trying to make this sound like a new dilemma? Teams have always been using this trick. Yes, it eventually catches up with them one day, but there are ways to minimize the impact.

    Look at the Colts last year. They had been using this trick for years with Peyton Manning (using future cap space to field a better team). They were so far over the cap last year that they decided to take their lumps (or at least they thought that), and they took a massive cap hit last year.

    Now?

    They are back to $30M or so UNDER the cap.

    If I have a championship-contending team and only have a window of 2 or 3 years, I’d do the same.

  17. ytownjoe says: Feb 27, 2013 10:46 AM

    Parity, parity, parity. Teams have to decide how to spread the money around.
    Teams with good management are on top. The others? Well, ask Lions, Browns and Bills fans.

  18. musicman495 says: Feb 27, 2013 10:52 AM

    One more thing – the Redskins and Cowboys never went over the cap in signing their players. They simply wrote off the remainder of some players salaries during the uncapped year – an action that was approved by the league office when they did it, by the way.

  19. harrisonhits2 says: Feb 27, 2013 11:43 AM

    Of course the agents will use any argument they can to try and drive the price for their players up.

    The one and only thing agents are concerned with is the size of their commission. Anything else is meaningless to them.

  20. jessethegreat says: Feb 27, 2013 11:54 AM

    Larry boodry; I understand the point you are trying to make but is that not the exact opposite of free market capitalism?

    In your little dream scenario, how would you feel if you were in Brees, Brady’s, or the manning boys territory? The big name guys bring in the most revenue. Let them market their skills and be compensated for them.

  21. beardinals says: Feb 27, 2013 12:08 PM

    How about shrinking the cap? Maybe then fans can get to a game for under $250 a piece.

    Attendance is already off, so that’s a good start.

  22. jdhein22 says: Feb 27, 2013 12:14 PM

    Now explain this concept to Congress and the President.

  23. bigbadal21 says: Feb 27, 2013 12:39 PM

    Feb 27, 2013 10:52 AM

    One more thing – the Redskins and Cowboys never went over the cap in signing their players. They simply wrote off the remainder of some players salaries during the uncapped year – an action that was approved by the league office when they did it, by the way.

    This is not a true statement. It was stated by the NFL that the contracts of the players who were redone to dump future cap money into the current noncapped year would still be approved if they were deemed to be free of legal defects which would nullify a contract. It was explained to the teams that because a contract was approved it did not mean that they would not be held liable for violating the uncapped year. The rules for an uncapped year was that you could spend as much money as you wanted but you could not redo a players contract, who was currently under contract, solely to reduce future cap amounts for that player. Keep in mind that the NFL determines its rules and the meanings of terms used in their rules. The NFL clearly defined what an “uncapped year” meant. It is no different than what the NFL considers “holding,pass interference,offsides”, or any other term it uses in its course of business .

  24. jmac71 says: Mar 1, 2013 1:42 AM

    Larryboodry- what if ‘they’ capped your occupation? And if your employer was the wealthiest industry of its kind? And then others, not in your industry, but consumers of it, advocated an arbitrary cap on what you could make, because they found it ridiculous (while still consuming the product)? C’mon man. You/we allow these salaries by our consumption of the product.

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