FNQB: NFL’s Projected $130 million Salary Floor is going to Render Recent SB Winner Roster Models Obsolete
Reports from the ongoing NFL CBA negotiations agree that the next NFL collective bargaining agreement is that the players will now receive 48% of total NFL revenues. If that sounds like a pay cut from the prior level of 60% of total NFL revenues, it is. But barely. The owners are apparently willing to agree to take that $1 billion league expense credit and throw it out, meaning that the 48% of total revenues for the players will actually be 48% of total revenues.
We can do some dirty math and calculate the expected NFL salary cap in 2011. $9 billion in total league revenues times .48 for the players’ share is $4.32 billion. Divide that share into 32 teams gives us a per-team cap of $135 million. That’s a good, accurate projection for the salary cap. It’s also roughly equal to the salary cap in 2009, which makes some sense. Revenues have increased, and the owners are saving something in this deal, so $135 million/team is a good salary cap figure that doesn’t put any strain on teams to cut salary after the uncapped year in 2010.
On the contrary, there will be a salary strain on plenty of organizations in 2011. And it’s not going to be the free-spenders who don’t always compete such as Washington and Minnesota. It’s likely to be the penny-pinching, player development focused franchises who are wildly successful, as well as the small-market, resource-limited teams that bargain hunt frequently. Because it also appears that the owners and players will be agreeing to an aggressive salary floor. This floor is expected to be set at 46.5% of total revenues. Doing the math precisely the same way as before, we find that the NFL salary floor in 2011 is expected to be set at $130.7 million dollars per club.
You think that’s going to change something? Understand now that as we currently stand, practically zero teams are in compliance with that salary floor in the uncapped year. Does that make any sense? The NFL had a year where the spending of teams was not limited (though player movement was). The Cowboys and the Redskins exceeded $165 million in salary. No other team got close to them. PFT has the list of salaries last year. 11 teams, one-third of the league, exceeded the SALARY FLOOR set by the NFL this year. 21 teams would not have been in compliance with such an agreement in 2010.
Redskins: $178.2 million.
Cowboys: $166.5 million.
Saints: $145.0 million.
Vikings: $143.4 million.
Seahawks: $138.8 million.
Jets: $135.7 million.
Packers: $135.3 million.
Raiders: $135.2 million.
Colts: $133.1 million.
Bears: $131.9 million.
Eagles: $131.0 million.
So 2/3rds of the league must change their behavior starting this belated offseason, and spend a higher percentage of revenues on players. And a number of the complying franchises are playoff teams. For most of the current playoff contenders, complying with the salary floor essentially means making a big free agent signing who fits the scheme, and rolling over the budget year to year. There are a number of teams who aren’t all that close to any sort of salary floor (I think the last salary floor sat around $95 million in 2009), and it’s hard to envision the plan for building these teams to included dumping a ton of annual salary into any veteran that can be reasonably expected to make the team. Take a look:
Panthers: $110.9 million.
Rams: $109.1 million.
Chargers: $108.0 million.
Bills: $105.3 million.
Broncos: $102.9 million.
Bengals: $100.8 million.
Cardinals: $97.8 million.
Jaguars: $89.5 million.
Chiefs: $84.5 million.
Buccaneers: $80.8 million.
This is going to be tough for these teams. It cannot be assumed that any of these organizations are going to be serious competitors for the premier free agents, yet, they are all going to need to come up with a way to raise salary by up to $30 million in 2011. This isn’t baseball. It is difficult to spend that much money in general. To do it without hurting ones team almost requires a $70 million total value contract to a franchise cornerstone. If you’re the Bucs or Chiefs, well, okay. You can find someone to give those millions to. But if you’re the Bills, Jaguars, or Bengals? Being forced to go outside the organization to give the big bucks away is really dangerous because all the good teams will be after the players who can justify that type of money with their checkbooks. Obviously, this leads to the two main mistakes: overpaying for mediocre talent and creating an albatross contract, or bidding up the price on a number of mid-tier signings, obstructing draft picks.
Despite all the extra money that is going to be in the game for players, I’m not figuring that there are going to be a great number of players who are looking forward to accepting starter money and a backup role. Not the veterans who will be eligible to get such contracts. With extra money in the game, veterans will be able to hold their spots longer. This is good for NFLPA members, but it makes building from youth a lot more difficult for the clubs. Oh, and did you here they are capping rookie salaries? This is going to work out great.
When you think about how the recent super bowl winners have been built, the formula is typically a well-built, homegrown defense with a quarterback drafted in the first round, and an intelligently built offensive line that gets the job done. We’ve seen teams like the Jags and Chiefs — to make a much easier salary floor in 2009 — pay non-elite passers like elite quarterbacks. That’s the salary floor effect that we’re going to see in spades this year.
It’s not a big deal for the Bucs, who can just give Josh Freeman an $100 million dollar extension before the season to raise payroll: they know he’s their future anyway. What about the Jags, who even when they keep David Garrard for this season, still need to raise payroll? So they keep Garrard and start him. They keep Aaron Kampman as he rehabs from another knee injury, because he helps up their salary. They keep Derrick Harvey, their 2008 first rounder, even though they are no longer sold on him as a starter. They can go out on the free agent market and finally buy some much needed secondary help. They extend MLB Kirk Morrison. The Jaguars become big spenders. And they only have $15 million to go in order to make the NFL salary floor! It’s okay: payroll is a marathon, not a sprint. Teams just have to tough it out.
You can’t blame the players any for wanting a high salary floor to ensure that money pumps through the game, even if teams can no longer build optimally. My hope is that this results in longer, bigger contracts for young players with plenty of upside, and that teams will now stop giving up on their players so early, if only because they need to make the decision to commit to them earlier then ever. For the non-rookie players, there is no downside to a high salary floor. For teams, it’s going to be a problem. And I just can’t say I’m all that surprised that they don’t see it yet.