Big Spenders Might Have to Change Their Ways... At Least Slightly

The Washington Redskins and some of the NFL's other free-spending teams might have to change the way they operate now that the sport's new labor deal is in effect.

One mostly overlooked aspect of the deal that was ratified in March by the league's franchise owners following negotiations with the players' union is that the revised salary cap system targets big spenders like the Redskins.

The deal assumes that, over the six-year duration of the agreement, the players will receive an average of 59.5 percent of league revenues as compensation. The salary cap guarantees the players 57 percent of the revenues in 2006 and 2007, 57.5 percent in 2008 and 2009 and 58 percent in 2010 and 2011. In addition, the deal assumes that the teams collectively will outspend the salary cap by 2 percent annually. That sets the deal's "trigger points" at 59 percent of revenues in 2006 and 2007, 59.5 percent in 2008 and 2009 and 60 percent in 2010 and 2011.

But there's more. If the teams' collective spending on players fails to reach the trigger point in a season, the salary cap is adjusted upward in the future. If the teams' collective spending on players exceeds the trigger point in a season, the salary cap is adjusted downward in subsequent seasons--but adjusted downward in such a way that those teams responsible for the over-spending are the ones that are hit. Those clubs have their own individual salary caps reduced.

Say, for instance, the entire league outspends the trigger point this season and the Redskins are $5 million over the trigger point. Since there will be five seasons left on the labor deal after this season, the Redskins' salary cap would be reduced by $1 million per season for each of those seasons. The mechanism was designed to keep free-spending teams from gaining too much of a competitive advantage by regularly outspending the salary cap for players.

"I think this deal, as negotiated and as agreed to, has got some important new elements that will be positive for both the owners and the players in terms of them meeting their expectations," outgoing NFL commissioner Paul Tagliabue said this week. "Obviously one of the problems with the last two extensions preceding this extension was that the Players Association's expectations of the level of spending were not met, at least in some years. There was a shortfall in terms of the actual cash spent. It was not a shortfall in terms of the cap, but there was a shortfall in the aggregate spending compared to what their expectations were.

"This new agreement has got provisions on it that were designed to avoid having such a shortfall. That's a major change, and a positive change for the players. There are parallel provisions that were designed to be important for the owners in terms of predictability of spending."

The Redskins always have excelled at getting the most possible out of their available salary cap space, and that usually has involved owner Daniel Snyder spending more cash to restructure existing players' contracts to create additional cap room. The Redskins probably will remain the most aggressive of teams in the free agent market. But the new labor deal has made it just a little bit tougher on them, and the setup might require them to curb their spending slightly.

By Mark Maske |  August 23, 2006; 11:56 AM ET  | Category:  Redskins
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This article does a very poor job of accomplishing the one goal it had, which was to describe how this one particular aspect of the new CBA could directly impact the Washington Redskins. What is the relationship between the revenue "trigger point" and the actual salary cap? For example the team's salary cap as frequently published is approximately $102 million. Since the team needs to be under the salary cap of $102 million, how can a team help reach the "trigger point" of the revenue? Or is the team actually operating above the $102 million therefore they will be penalized regardless? Are the Redskins getting more penalized for operating outside the cap? Is it possible to be over the "trigger point" without being over the 102 million dollar cap limit? Have they set the "trigger point" in a position where a team could be under the prescribed $102 million but they may still be penalized in future years? Is the salary cap now a floating target from one year to the next, which is not set in black and white before the season?

Posted by: Allan G. | August 23, 2006 1:54 PM

I agree, please explain what the trigger point is and how it is derived.

Posted by: Pike | August 23, 2006 2:05 PM

This article doesn't make any sense. Are the trigger points based on the amount of cap space used? Am I to understand that the salary cap is now flexible like MLB?

Also, when you refer to compensation are you talking about payroll or "cap dollars?" Teams often have payrolls that are greater than the cap because they prorate signing bonuses over the life of the contract. Is that changing?

Posted by: Joe in Raleigh | August 23, 2006 2:28 PM

It also does address what happends as the cap limit rises from year to year. In other words, though the percentage of League revenue to the players may be fixed, League revenues go up from year to year, raising the dollar amount of the cap. As this rises, shouldn't the "trigger point" rise as well, making it less likely that any such penalty would materialize. The article also says that on the whole, the League has been spending than the player's expectation - wouldn't that mean the League would raise the cap in some years giving the Skins and other free-spending teams an even greater advantage?

Posted by: Ajay Gupta (Potomac) | August 23, 2006 2:42 PM

I think this is how it works. The NFL gets its pile of dough from the TV, etc. and divides it equally among all teams. The salary cap is a percentage of that amount. If all the teams cheap out- you know, the Bidwell method, and pay their players way under the cap amount, except for four or five wild eyed big spenders- Danny, Jerry, etc., then it doesn't matter because the combined total of all teams spending is still under the target. But if lots of teams go over, so that the combined total is too high- the trigger point of 2 percent above the target- then the ones who overspent and caused the league as a whole to miss the target will be nicked in the future. That my story and I'm stickin' to it.

Posted by: kurosawaguy | August 23, 2006 2:53 PM

they've been saying he was going to get burned since he got here. Not saying Deon wasn't a bad idea... but my sense is with the number of owners ducking, Danny will be safe for a long time.

Posted by: still... | August 23, 2006 3:22 PM

It's all about money and keeping fannies in the seats in Tampa and Arizona and Cleveland and Cincinnati and Green Bay. Trying to avoid the Steinbrenner Syndrome.

Posted by: Anonymous | August 23, 2006 4:12 PM

I took along look at your article about this thing called, "Trigger Point"! What I got out of it, was, you have people who know how to make money, and others that just sit around on their "Thumbs". They stay far under the cap on purpose. So, lets penalize the go getters. I remember when these contracts talks began. They should have titled it " Lets get Danny & Jerry"!
"Go Skins"!

Posted by: John M. | August 23, 2006 4:31 PM

Here's my best attempt to clarify this.
The NFL salary cap is not, and has never been, a "hard" cap. A team can spend more money than the cap as long as it keeps the total of the salary cap figures for all its players (a player's salary cap figure is different than his income, but let's not go into that here) under the cap. That is known as "cash over cap."
The cap this year is 57 percent of revenues--that's $102 million per team. Yes, the cap goes up from year to year as revenues go up, but forget about that. That's making this even more complicated than it already is. The percentage also is going to go up as this labor deal goes along, but don't worry about that either.
The trigger point is 2 percent above the cap. So this year, the trigger point is 59 percent of revenues--or a little over $104 million per team. So if the entire league's cash expenditures on players exceeds the trigger point and the Redskins are one of those teams spending over the trigger point, their salary cap will be reduced in future seasons.
Hope that helps a little.

Posted by: Mark Maske | August 23, 2006 5:05 PM

Ding, ding, ding! The millionth article since the Snyder era about how screwed the Redskins will be salary-wise, next year.

In other news, the sky is falling!

Posted by: magoo | August 23, 2006 8:02 PM

That does clear some things up. Thanks.

Posted by: Pike | August 25, 2006 10:50 AM


Posted by: clodisg | August 29, 2006 10:03 PM

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