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.
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