NFL has little leverage to secure salary givebacks

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Sometimes it pays, literally, to have an in-house media conglomerate.

The NFL used its NFL-owned media outlet to float a trial balloon on Tuesday regarding the possibility that players could give back some salary in 2020, in order to “save some jobs” both this season and next.

It’s a simple argument, one which has been mentioned here previously. With the salary cap set for 2020 and with losses possible if not likely in the form of games played without fans, teams will be more tempted to slash high-priced veteran players (or to squeeze them to take pay cuts under the threat of being released), hoarding cash in anticipation of the reduced revenue. For 2021, if/when the salary cap falls, that same dynamic would play out, with higher-priced veterans in greater danger of being whacked in order to keep a given team under the lower spending limit next year that would be driven by lower revenue this year.

Beyond the huffing and puffing that teams will risk blowing their own houses down by cutting players whose services will be even more valuable in a year with no offseason program to get younger, cheaper players ready, the NFL has no leverage to force the NFL Players Association to do anything by way of taking less money to, basically, share the pain of an unexpected reduction in revenue after the salary cap for a given year was set.

The players’ salaries are set. The salary cap is set. Even if the league decides to pass revenue losses through to veteran players by cutting them (or by pinching them individually to take less), the Collective Bargaining Agreement has clear spending requirements. For the most part, money not spent now will have to be spent later.

The only argument that the NFL has to not pay players arises from language in the Standard Player Contract implying that, if there’s no season, the obligation to pay base salaries never arises. If there’s only a partial season, the players arguably get their money — with the revenue losses from canceled games triggering a mutual obligation to negotiate next year on the impact on the salary cap. It’s an odd requirement in the Collective Bargaining Agreement, given that the league and the union set the salary cap based on negotiations every single year.

Plenty of teams won’t want a reduced cap. Plenty of teams want to win, and so they want to spend. Someone like Cowboys owner Jerry Jones would welcome the possibility that others will harm their own competitive interests by voluntarily tightening their belts and deliberately spending less, especially if that includes dumping veteran players who would help the team be as good as it can be.

While the two sides are free to negotiate, or try to negotiate, anything they want, the league isn’t holding many cards on this one. Frankly, the mere fact that the possibility of seeking givebacks has been floated by the league to league-owned media puts the union on notice to watch carefully for any evidence of collusive activity moving forward, with the league office potentially advising teams on how to go about getting givebacks without giving anything up to get them.

There’s precedent for this kind of behavior. Remember the uncapped year of 2010? Dallas and Washington eventually were whacked by the powers-that-be in the form of dramatically reduced cap space for violating the wink-nod rules that the league put in place to prevent teams from treating the uncapped year as, you know, uncapped.

This time around, the league may want teams to treat a year with a set cap as having a lower cap. And if teams suddenly and spontaneously starting slashing salaries and coincidentally reducing their 2020 salary budgets by similar percentages, it will make plenty of sense for the union to look under every rock for evidence of coordination i.e. collusion.

26 responses to “NFL has little leverage to secure salary givebacks

  1. Plenty of teams won’t want a reduced cap.

    That would be a viable alternative, and a better one than asking players to take a pay cut this year. Carry that loss over to next year in the form of a salary cap that reflects the issues from this year. It would solve the money problem and force teams to pay smartly instead of wasting $150M on guys like Dak. The players don’t like the idea of a paycut this year but they may not get a choice next year if the cap gets drastically reduced.

    Then what will happen is some of the highest paid guys in the league will get cut and replaced with cheaper options. You can either pay now or pay later. You can’t have it both ways.

  2. I want the last 40 seconds of my life back after making the mistake of reading this.

  3. In 2018-19, the Green Bay Packers disclosed their revenue from the national TV contracts at 274 million. The cap is 198 million. Something tells me the owners will be just fine

  4. Hence why you You dont want to over pay Dak right now. Your like $12 mil under the cap now, then next year you will have Fredricks cap of 11 mil off the books as well as having Daks 32 mil off the books. Thats already like a $55 mil savings off the books just right there for next season. Then let the cap determine what we offer Dak and if he doesnt like it then let him see if any other team has the funds to over pay him. Im thinking not, he played his average hand.

  5. Fine with me. Bring on the salary cap cut.

    I want to see chaos, boys. Panic in the front office, panic in the locker room, panic in the NFLPA..

  6. I bet a few owners have no problem playing this season without fans just to prove a point. They’ll get the lost 2020 revenue back, it might take a few years but we the fan will end up paying for it in the form of higher ticket, concession, apparel, parking and whatever else happens to have the shield on it…

  7. Would have been interesting if the players listened to Richard Sherman and voted down the new CBA nad had to start renegotiate as covid hit. To do a new contract with covid involved the players would have been really screwed, if no games/reduced games/no fans happens, triggers were built in to the the contract. It seems the only option for the NFL is no season to save money, which they would be stupid to do but it is the NFL.

    Sometimes it is better to take what is on the table (……Dak) then trying to eke out every last cent listening to self-righteous players, with little to lose.

  8. For the past 25 years or so it has been virtually impossible to lose money owning an NFL team. Record profits virtually every year, team valuations going through the roof, most every team plays in a publicly-finances stadium. But one SINGLE bad year has the owners wanting money given back to them?

  9. We either see a massive COVID spike that crushes the healthcare system in the next 4 to 7 days, or the we crashed our economy for nothing.

    So truths are about to be revealed, and the NFL will either play a season with full stadiums or it’s Mad Max time.

  10. MNGoon says:

    June 2, 2020 at 6:39 pm

    We either see a massive COVID spike that crushes the healthcare system in the next 4 to 7 days, or the we crashed our economy for nothing.

    So truths are about to be revealed, and the NFL will either play a season with full stadiums or it’s Mad Max time.
    __________________________________________________________

    2nd spike of Covid-19 won’t be until fall. Maybe stadiums will fill for the first games but I bet things get locked down again… 🙁

  11. The NFL does have the ultimate trump card though: if the season is projected to be unprofitable, they can cancel it altogether. And the players will fear that for the same reason they can’t sustain a strike: between the bubble players whose career expectancy is nil, and the knuckleheads who make millions but don’t save a dime, there’s too many players that just can’t afford to miss game checks.

  12. I’m not on the owners side on this one. No guaranteed contracts and you want to slash pay?

  13. Every year revenues increase, and the cap increases accordingly. If revenues go down in one year, shouldn’t the cap go down as well? Isn’t that is what has been negotiated by both parties?
    Work around it capologists. Reduce salaries, increase signing bonuses. Extend contracts with voidable options.
    But I like the idea of spreading the burn of 2020 over 2-3 years better.

  14. Thank You. This sentence in the story tells me all I need to know. “hoarding cash in anticipation of the reduced revenue.” Reduced revenue? That means the owners are willing to take any profit loss out on the players? Sucks to be them. Maybe you better have someone who knows what they are doing write up you contact with the NFLPA. Sucks to be them. If they start culling vets after games are played to SAVE PROFITS…. I’m done with them.

  15. Reduced revenue can affect you now or affect you later. If owners have to fund loss this year, they get “windfall” in theory the next year when cap is reduced and revenue goes back up (who knows what the long-term effect might be, might be multi years just to get back to 2019 levels as disposable income in this country obviously way down). It is primarily a timing issue. As a large percentage of the league (15-20% of guys) will be out of the league next year, they will have zero inclination to want to take cut now (leave that for the next guy). Might also mean a few more college free agents make it to keep down costs (have to spend to 90% of cap)?
    Yes, people who have billion dollar paper values do actually need cash to operate their businesses. Value on paper (which has clearly declined substantially along with most other assets) doesn’t cash checks.

  16. No way players should give back a dime, they permanently damage themselves for life for pennies on the dollar compared to what ownership makes. Time for those obscenely rich corporate overlords to take a marginal hit to their billions of dollars and honor the contracts that they gave to their players

  17. They had their chance if they had not announced a season schedule. If they had not announced a schedule there would not have been games to cancel. Once the geniuses announced the schedule, the horse was out the barn.

  18. the NFL has no leverage to force the NFL Players Association to do anything by way of taking less money to, basically, share the pain of an unexpected reduction in revenue after the salary cap for a given year was set.
    _________________________

    OH YES THEY DO! Since they are “game checks” they could shorten the season or if they think they’re going to lose money anyhow just not play any games at all and the players couldn’t do a damn thing about it! That would shift a lot of pain onto the players, most would cave in after 3-4wks, begging to come back to work.

  19. I’m with psubeerman21 and mogogo1 on this one.
    the cap was there in the first place to keep a certain amount of balance and keep certain owners from overpaying compared to small market teams (imagine Kroenke oder Jerry Jones WITHOUT cap limits…)- this wasn’t imposed to keep teams alive, but to keep a reasonable amount of balance in the league.
    if you don’t want to pay up, don’t hand out these kind of contracts in the first place. Simple as that… I’m pretty sure no team will fold over one or even two seasons of empty stadiums… (looking at you, chargers and jags… *coughcough*)

  20. Capitalism and greed at it’s finest. I’m going to sit here with my popcorn and watch this madness and laugh. Billionaires complaining their not going to make more money than they did last year. Bet most small business owners in America could go to their employees and ask them to refund some of the salaries they pay out, or future checks. I’ll admit when a game is on I can’t turn away from the TV, or free agency, or the draft. But I’m really beginning to hate the NFL as a business.

  21. Next CBA will have such a provision – if the owners are going to get bitten on this situation, they will future proof it next time.

  22. “Someone like Cowboys owner Jerry Jones would welcome the possibility that others will harm their own competitive interests by voluntarily tightening their belts and deliberately spending less, especially if that includes dumping veteran players who would help the team be as good as it can be.”

    The only way the Cowboys will be competitive enough to win a SB is if 10-12 other teams are force to simply not play due to a quarantine

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