The Warpath presents: Salary Cap 101

[BrunellMVP?]

sorry, thanks to the CrazyCanuck as well

[That Guy]

i thought the cap was up to 62-64% of revenue, not 58%

it's a good read though. thorough.

[Hijinx]

Can anyone remember the league office granting cap relief for "special circumstances"? I thought this was possible, however I couldn't find a story where it happened. I mean if the Skins didn'tqualify for the loss of ST what does.

Another few questions even though the NFL has profit sharing there is quite a difference in earning between teams. There is usually more than $100 million difference between the top teams and the bottom teams. What makes for this difference, just merchandising and concession sales?

This really means that for some teams the 50% min(about $100 mill) is almost a hardship. For example the Skins's revenue is usually the highest at about $315 million that means the skins will spend between 31.7% and 36.8% of their revenue on players. However for a team like the Vikings, with a revenue of about $180 million, they will spend about 55.6% to 64.4% of their revenue on players. That seems like a huge difference.

Perhaps is is no surprise that the lowest revenue teams(Vikings,49ers, Jags, Raiders, Falcons) seem to be doing poorly.

[That Guy]

Originally Posted by Hijinx

Can anyone remember the league office granting cap relief for "special circumstances"? I thought this was possible, however I couldn't find a story where it happened. I mean if the Skins didn'tqualify for the loss of ST what does.

Another few questions even though the NFL has profit sharing there is quite a difference in earning between teams. There is usually more than $100 million difference between the top teams and the bottom teams. What makes for this difference, just merchandising and concession sales?

This really means that for some teams the 50% min(about $100 mill) is almost a hardship. For example the Skins's revenue is usually the highest at about $315 million that means the skins will spend between 31.7% and 36.8% of their revenue on players. However for a team like the Vikings, with a revenue of about $180 million, they will spend about 55.6% to 64.4% of their revenue on players. That seems like a huge difference.

Perhaps is is no surprise that the lowest revenue teams(Vikings,49ers, Jags, Raiders, Falcons) seem to be doing poorly.

it's like a cut, which is like a retirement. and it was a very very small amount of money. technically danny can sue the taylor family to get some of it back, but that'd be pretty low, and it'd net only 2mill or so if he won.

[CrazyCanuck]

Originally Posted by That Guy

i thought the cap was up to 62-64% of revenue, not 58%

From: Ask The Commish.com - Salary Cap FAQ

"Under the old DGR model, the CBA Percentages were as follows:
1998-2001 63%
2002 64%
2003 64.25%
2004 64.75%
2005 65.5%
2006 64.5%
2007 Uncapped Year

However, when the model was changed and the DGR expanded, the players and owners agreed to a smaller set percentage of the larger pot. The $102 M figure in 2006 was based on a 57% share of the 2006 projected Total Revenues as was the $109 M figure for 2007. In 2008, the percentage jumps to 57.5%, and the same percentage applies to 2009 as well. In 2010 and 2011 the percentage will be 58%."

[Hijinx]

I have a question that occurred to me today: Could the Cap number go down? The way the economy is heading I could potentially see the NFL having less revenue in the next few years. This would wreak havoc with team salaries. Is there a built in stop gap to prevent the cap from going the other way? Or is it just assumed that the NFL's revenue will grow?

[CrazyCanuck]

Originally Posted by Hijinx

I have a question that occurred to me today: Could the Cap number go down? The way the economy is heading I could potentially see the NFL having less revenue in the next few years. This would wreak havoc with team salaries. Is there a built in stop gap to prevent the cap from going the other way? Or is it just assumed that the NFL's revenue will grow?

From: Ask The Commish.com - Salary Cap FAQ

"Note: The actual dollar amount of the Salary Cap can not be less than the actual dollar amount of any Salary Cap for the preceding year. So, for example, if Total Revenues should decline from one year to the next, the players are protected against a smaller associated Salary Cap. However, the Projected Benefits, plus the amount of the Salary Cap multiplied by the number of Teams in the NFL, can not exceed 61.68% of Projected Total Revenues."

[FRPLG]

Originally Posted by Hijinx

I have a question that occurred to me today: Could the Cap number go down? The way the economy is heading I could potentially see the NFL having less revenue in the next few years. This would wreak havoc with team salaries. Is there a built in stop gap to prevent the cap from going the other way? Or is it just assumed that the NFL's revenue will grow?

As CC said it could technically happen but realistically the league has never had a negative growth season. It is very very unlikely to happen economically.

[Schneed10]

Originally Posted by FRPLG

As CC said it could technically happen but realistically the league has never had a negative growth season. It is very very unlikely to happen economically.

Agreed. NFL fans are passionate (if you're willing to pay thousands to attend 8 football games, you must be). When times get economically tough for them, season ticket holders are likely to pull back on other expenditures before giving up their season tickets. And for many teams like the Redskins, even if ticketholders give up their seats there will be plenty of people willing to take their place.

The NFL has little competition, few threats from competitors. I look at their revenue growth prospects being as safe as big oil's.

[That Guy]

Originally Posted by Schneed10

Agreed. NFL fans are passionate (if you're willing to pay thousands to attend 8 football games, you must be). When times get economically tough for them, season ticket holders are likely to pull back on other expenditures before giving up their season tickets. And for many teams like the Redskins, even if ticketholders give up their seats there will be plenty of people willing to take their place.

The NFL has little competition, few threats from competitors. I look at their revenue growth prospects being as safe as big oil's.

except the growth of football enthusiasm isn't nearly as safe and the growth in energy consumption, and at some point, there may actually be a level off point, which would TOTALLY screw LDS's cap structuring program.

[MrJL]

Is it still possible to restructure contracts?

[GTripp0012]

Originally Posted by That Guy

except the growth of football enthusiasm isn't nearly as safe and the growth in energy consumption, and at some point, there may actually be a level off point, which would TOTALLY screw LDS's cap structuring program.

Except that, if there is football after 2010, it's likely not going to be capped. Only because with the death of Upshaw, there's no chance in hell they get the CBA redone prior to the last capped year (2009).

All owners support a salary cap system, but the big boys like Snyder and Jones aren't just going to sit on their hands this offseason simply because they haven't yet extended the CBA.

And with the economic situation what it is, there's no way to set a cap low enough to make it fair for the Buffalo's and Cincinnati's of the world that any of the mid or upper level franchise owners would agree to. So if you're those teams, you'd probably have to support no cap, because with declining league revenues, any sort of cap to the shared revenue being received would hamper their ability to put a professional product on the field.

[GTripp0012]

The good news is that, unlike 2006, Snyder and Cerratto have a lot of flexibility if they are required to cut their salary.

Jerry Jones on the other hand, has no sort of flexibility to do so.

[GTripp0012]

Originally Posted by MrJL

Is it still possible to restructure contracts?

No, not in the traditional sense that we have been using, at least without an extension to the CBA.

Contracts can be extended, and the bonus money can still be prorated, but any unpaid (but earned, and not prorated) bonus money will have to be paid in the last capped year.

But we can't take 2009 salary, and just opt to prorate it as guaranteed money through the life of the deal.

[53Fan]

Originally Posted by Slingin Sammy 33

Excellent stuff. I recommend putting this up in the drop-down under Team also, either as it's own page or under the "Salary Cap Info". That way it's always there for quick reference

Good idea. Thanks guys! You just turned Chinese into English for me.