The Warpath presents: Salary Cap 101

[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.

[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.

[Schneed10]

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.

So far, nope. Not even in a down economy. The cap limit exceeded expectations, coming in at 127 million. 4.0 million more than the projected 123.

This is reflective of the consistently strong demand for games on TV and tickets. Revenue is actually coming in higher than forecasts, even in down years.

[That Guy]

Originally Posted by Schneed10

So far, nope. Not even in a down economy. The cap limit exceeded expectations, coming in at 127 million. 4.0 million more than the projected 123.

This is reflective of the consistently strong demand for games on TV and tickets. Revenue is actually coming in higher than forecasts, even in down years.

at some point :P i didn't say i saw it coming, but that's the only real risk... it'd involve a new contract with lower or equal money from TV, which is possible, but i don't see happening soon (thanks inflation!).

[T.O.Killa]

Originally Posted by Schneed10

So far, nope. Not even in a down economy. The cap limit exceeded expectations, coming in at 127 million. 4.0 million more than the projected 123.

This is reflective of the consistently strong demand for games on TV and tickets. Revenue is actually coming in higher than forecasts, even in down years.

From what I heard on ESPN, the cap was higher than normal because teams were not using enough of thier cap space and the players have some sort of provision for that that increases it so that teams like the skins can spend more.

[Schneed10]

Originally Posted by T.O.Killa

From what I heard on ESPN, the cap was higher than normal because teams were not using enough of thier cap space and the players have some sort of provision for that that increases it so that teams like the skins can spend more.

Cool, so essentially we're already migrating to a capless world in a lot of ways.