Some Talk On Opting Out Of The Cap

[WoodysGirl]

Thats why I asked if there were a lot of teams who bumped up againt the minimum.

As for Tampa, I think Adam has speculated before that the 85% minimum applies to the pre-adjusted cap for each team.

Gotcha, I misread. Tho I can't think of a single team where that would be an issue, not even the Cards.

 

[AdamJT13]

Thats interesting that you think that would be the case as it would clear up my confusion over the deal. But why do you think that is the case?

A lot of owners think the players are getting too much money -- that's the reason they want out of the CBA. Are those owners going to spend the same percentage of their revenues if they don't have to?

Look at the Major League Baseball payrolls for last season --

1 New York Yankees $195,229,045
2 Boston Red Sox $143,123,714
3 New York Mets $116,115,819
4 Chicago White Sox $109,290,167
5 Los Angeles Angels of Anaheim $109,251,333
6 Los Angeles Dodgers $108,704,524
7 Seattle Mariners $106,516,833
8 Chicago Cubs $99,936,999
9 Detroit Tigers $95,180,369
10 Baltimore Orioles $95,107,808
11 San Francisco Giants $90,469,056
12 St. Louis Cardinals $90,286,823
13 Atlanta Braves $89,492,685
14 Philadelphia Phillies $89,368,213
15 Houston Astros $87,759,500
16 Oakland Athletics $79,938,369
17 Toronto Blue Jays $79,925,600
18 Milwaukee Brewers $77,986,500
19 Minnesota Twins $71,439,500
20 Cincinnati Reds $69,654,980
21 Texas Rangers $68,818,675
22 Kansas City Royals $67,366,500
23 Cleveland Indians $61,289,667
24 San Diego Padres $58,235,567
25 Colorado Rockies $54,424,000
26 Arizona Diamondbacks $52,067,546
27 Pittsburgh Pirates $38,604,500
28 Washington Nationals $37,347,500
29 Florida Marlins $30,507,000
30 Tampa Bay Devil Rays $24,124,200

With no cap in the NFL, you'd end up with a similar disparity, if the system was in place for a few years (so that many of the current contracts would expire). The cheap teams wouldn't be forced to spend to a minimum. They could spend half as much (or less) and rake in the TV money, and they know they'd still be able to compete against most of the rest of the league (all of the other cheap teams, in particular). And with fewer teams willing to bid on players, the cost of signing most free agents would go down. The cost of superstar free agents might go up, but for the most part, only the wealthy teams would be bidding on them.

In the end, you'd end up with a great disparity in the money spent by teams and the money made by players. But the net result would be that the players would get a smaller share of the revenue pie than they do now, just like the baseball players do without a cap (or floor).

 

[sonnyboy]

I've always been one to think of the league first. As big a Cowboy fan as I am, I understand we need competitive balance. I hate MLB's system.

However, I'm starting to think an uncapped system in the NFL could work.
I know for a fact it would work a lot better than it does in Baseball.

Contrary to popular opinion teams like the Yankees and Sox dont spend more than they take in. Thier payrolls are 2-4 times greater because they are taking in that much more in revenue.

Profootball teams for the most part wont run thier businesses at a loss. You may have a team on occassion go over or close to revs in a given year, but it will be the exception, not the rule.
Long term teams will keep salaries as a fraction of revs much like the cap does today.
The difference will be in the teams revs and thats the key.

The difference in the top and bottom teams in the NFL is not even close to that of baseball.
The most significant revenue stream, TV, is shared equally.

This is what you'd probably see in profootball in 2010.

You'll have top revenue teams like Dal, NYG, Was, Pat, Chi, NYJ, SF, Hou.
These teams would have revs from 180-200 mil.
The rest of the league might break out like this.......
8 teams 160-180
8 teams 140-160
8 teams 120-140

This is all hypothetical, but probably not too far off reality.

Point is you wont have teams like the Cowboys and Commanders dominating the league with payrolls 2-3 times greater than the Bengals and Titans.

Teams like the Cowboys will have an advantage, it just wont be overwhelming. I can live with that

 

[Skinsmaniac]

A lot of owners think the players are getting too much money -- that's the reason they want out of the CBA. Are those owners going to spend the same percentage of their revenues if they don't have to?

I think it's even worse than that. A team like Jacksonville might be willing to spend the minimum because they have a shot of winning. But if there's no cap, and the Jags know they can't compete, then they would have no reason to spend as much money as they do now.

However, I'm starting to think an uncapped system in the NFL could work.
I know for a fact it would work a lot better than it does in Baseball.
...
The difference in the top and bottom teams in the NFL is not even close to that of baseball.
The most significant revenue stream, TV, is shared equally.

You are assuming that teams will continue to share TV revenue. If a team thinks it should keep all of the money it makes from its fans buying seats, jerseys, whatever, there is no reason to think that team will be happy sharing TV revenue.

This is just depressing. Really depressing.

 

[skinsscalper]

I think it's even worse than that. A team like Jacksonville might be willing to spend the minimum because they have a shot of winning. But if there's no cap, and the Jags know they can't compete, then they would have no reason to spend as much money as they do now.



You are assuming that teams will continue to share TV revenue. If a team thinks it should keep all of the money it makes from its fans buying seats, jerseys, whatever, there is no reason to think that team will be happy sharing TV revenue.

This is just depressing. Really depressing.

I disagree with the notion that the TV revenues won't be shared. You won't get enough teams in the league to agree to a structure that doesn't evenly disperse league wide national TV revenue.

The gripe that guys like Jones and Snyder have is that they do a tremendous job of generating LOCAL revenue for their teams that are distributed to teams that do virtually no local marketing yet reap the rewards of Jones', and Snyder's, and Kraft's, and Bowlen's hard work. Jerry made a gamble a few years ago with he NFL agreeing to pay his share of the revenue to the league if he could keep the profits from his own jersey and paraphenelia sales. The gamble was huge because first of all the Cowboys weren't that good, and second of all, if the Cowboys merchandise sales tanked, Jones would still be liable to the league for his share of the revenue whether he actually reached those sales revenues or not. That's when you stopped seeing Cowboys gear in places like Wal-Mart or JCPenney unless you lived in Texas or close by. I used to live in Wyoming and you would find Cowboys gear everywhere. Not after Jones made his gamble. You couldn't find it anywhere but online. In the end it paid off for Jones. He actually made a profit and more importantly a point. The point being that even a bad Cowboys football team was worth more revenue than a good Baltimore or St. Louis team. This, I believe, is the true fire starter for Jones.

We all Jones history and his class action suits against the league in his early days, but this gamble and the pay off only solidified Jones' stance and now he's ready to capitalize.

 

[Skinsmaniac]

I disagree with the notion that the TV revenues won't be shared. You won't get enough teams in the league to agree to a structure that doesn't evenly disperse league wide national TV revenue.

I'm not sure what kind of vote the owners would need to change the TV revenue structure. But I don't think it's too crazy to think that the Cowboys and Commanders would want to work out an agreement with local TV stations or create their own network like the Yankees did with YES.

 

[skinsscalper]

I'm not sure what kind of vote the owners would need to change the TV revenue structure. But I don't think it's too crazy to think that the Cowboys and Commanders would want to work out an agreement with local TV stations or create their own network like the Yankees did with YES.

Actually Jones already tried to create his own network and was shot down by the league because a developing new channel. You might have heard of it..................the NFL Network. In fact the league asked Jones to help spearhead the entire network along with some other owners. The NFL is all too familiar with Jones' marketing prowess and innovations when it comes to generating both money and interest. They wasted no time in tapping into Jerry Jones and his business savvy. In fact to this day the league uses Jones as a mouthpiece during the ongoing cable war with the NFL Network.

You're right, Jones or Snyder may wish to capitalize on local markets, but considering the fact that the games are shown on national networks, there's not a lot of wiggle room for any team to do much locally. Local ad revenues are reaped by the local affiliates so, I'm not sure what they could do as far as TV revenue. I'm sure that they would come up with something, but I don't know that it would be as lucrative as other ventures that don't involve sharing their money with the rest of the league because it fell into the "TV revenue" sharing category.

I think it's in the best interest of the league overall to share TV revenues. I don't even think that's the issue with Jones, Snyder or any of the rest. It's the fact that they can't keep all of the local revenue that they generate, or team specific revenue that they generate (i.e. Jersey, hats, etc.). They have a point to a certain extent. Why should they have to share a billion dollars in sales with a Jacksonville team that does little to promote their team rather than to show up on Sunday and play ball, yet generates, say maybe, 200 million in total sales? I'll guarantee you that the Cowboys, Commanders, Broncos, and Patriots put a huge deal more into local promotions and advertising than most of the rest of the league combined. They SHOULD take a bigger piece of the pie.

This notion that smaller market teams couldn't compete is without a cap total BS. The Bills went to 4 Super Bowls in a row. How many years out of those four were in the salary cap era? The Broncos went to 3 SBs in the 80s. At that time Denver's population was about 2 million. If the size of the market dictated team success, you'd never see a horrible Detroit team, or the Jets, or Los Angeles team. Yet perennially, those teams sucked in the pre-salary cap era. The formula for success hasn't changed in the NFL in decades. The teams that draft well and are coached well are the winners. No cap will ever change that. That's why you saw teams like the Packers, Chiefs, Vikings, Colts, Dolphins, Cowboys, Steelers, etc. win. they didn't outspend everyone. They out developed, and out coached, and out played everyone. Now, I know that it was a different era and FA wasn't even around, but take a look at the big players in FA this year. Actually, even better, let's look at the non-players in FA this year. The Colts, Cowboys, Chargers, Patriots, Giants, Packers, and Skins. Every team on that list was in the playoffs last year. There's a good chance that everyone of them will be back. Is it because they out spent their colleagues. No. They drafted better and held on to their own players (except the Skins. The same formula that's been producing winners for decades on end.

 

[CaptainAmerica]

Whoever the guy on the radio was, I don't think he knows too much about the cap. First of all, the teams he mentioned HAVE NOT been structuring contracts to dump a lot of money into "an uncapped 2010." In fact, a lot of the contracts they've given out have a lower cap hit in 2010 than in 2009 or 2011. If you compare those contracts to any contracts signed in any other season, they're structured exactly the same way. He probably just looked at the base salaries and notices that, for a lot of them, 2010 is higher than in 2008 or 2009. But that's only because they're getting a huge bonus this season and another roster bonus or option bonus in 2009. Let's use Calvin Pace as an example. The Jets signed him to a six-year deal worth $42 million. His base salaries are $750,000 in each of the first two years, then $3.75 million in 2010. The guy on the radio must think they're planning on an uncapped 2010, right? Well, no. He got an $11 million signing bonus this year, and he has a $9 million roster bonus due in 2009. That's why his base salaries are so low in the first two years. And in 2010, he doesn't get any such bonus.

Secondly, he talks about teams needing cap room to sign high draft picks, which is ridiculous. Jamarcus Russell's cap number last season was less than $3 million. The Raiders used more of their cap on guys such as Barry Sims, Terdell Sands and Warren Sapp than they did on Russell last year. You don't need cap room, you need CASH -- and confidence in your scouting department to draft the right player before you commit to him long-term.

And lastly, he might be surprised to find out that NFL players get a larger percentage of revenues than any other sport. If the cap goes away and the owners let the market dictate what players get paid, some teams might spend more, but on a league-wide basis, the players certainly will end up getting LESS money overall than they're getting right now.

Adam,

No one is going to argue the Cap with you, so certainly we trust your numbers, but is isn't the guy basically saying what Jerry indicated the other day that it's his belief there is a very strong possibility that the the cap will be gone in 2010?

 

[theogt]

A lot of owners think the players are getting too much money -- that's the reason they want out of the CBA. Are those owners going to spend the same percentage of their revenues if they don't have to?

Well, if they're spending over the minimum now, I don't see why they'd spend less in the future, unless the loss of revenue sharing would result in those teams having less money to spend. Obviously it would mean some teams have less money to spend, but then the question becomes, would the decrease outweigh the increased spending by other teams. I really have no way of knowing, as I really don't know the extent of revenue sharing that goes on and the effect it has on teams' financial capabilities.

 

[AdamJT13]

Adam,

No one is going to argue the Cap with you, so certainly we trust your numbers, but is isn't the guy basically saying what Jerry indicated the other day that it's his belief there is a very strong possibility that the the cap will be gone in 2010?

He doesn't have to say that -- Jerry already did. And so did a lot of other people. But a lot of everything else he said is misguided or just plain wrong.

 

[CaptainAmerica]

He doesn't have to say that -- Jerry already did. And so did a lot of other people. But a lot of everything else he said is misguided or just plain wrong.

Gotcha.

 

[Skinsmaniac]

Actually Jones already tried to create his own network and was shot down by the league because a developing new channel. You might have heard of it..................the NFL Network.
...
This notion that smaller market teams couldn't compete is without a cap total BS. The Bills went to 4 Super Bowls in a row. ... Now, I know that it was a different era and FA wasn't even around, but take a look at the big players in FA this year. Actually, even better, let's look at the non-players in FA this year. The Colts, Cowboys, Chargers, Patriots, Giants, Packers, and Skins. Every team on that list was in the playoffs last year. There's a good chance that everyone of them will be back. Is it because they out spent their colleagues. No. They drafted better and held on to their own players (except the Skins. The same formula that's been producing winners for decades on end.

There's no need for teams to negotiate with local TV stations. If the large market teams wanted to they could simply negotiate with the networks as a league, and then divide the revenue among teams with respect to Nielsen ratings, or some other measurement. So if Giants games were watched by 10% of people, the Giants would get 10% of the pie.

The large amount of unused cap space this year is an aberration. Agents will notice it and realize that they are taking too little money by re-signing before free agency begins and that they should tell their clients to wait for the summer so they can get Berrian-type deals. So there will be fewer re-signings and more good free agents - at least that is the economically rational result. Free agency changed the game and will prevent teams like the Bills or Packers from competing in an uncapped world.

Well, if they're spending over the minimum now, I don't see why they'd spend less in the future, unless the loss of revenue sharing would result in those teams having less money to spend. Obviously it would mean some teams have less money to spend, but then the question becomes, would the decrease outweigh the increased spending by other teams. I really have no way of knowing, as I really don't know the extent of revenue sharing that goes on and the effect it has on teams' financial capabilities.

As you mentioned, if there is no profit sharing the Jags would have less money to spend. They also must decide if paying 100 million is worth it if they can never win a division dominated by the Texans who would pay $200 million in salaries. The Jags might just decide if they're going to lose, they might as well cut costs.

 

[speedkilz88]

If they do away with the cap, players also have to play six seasons before becoming a free agent instead of four. I'm not sure if there is a restricted free agency in that situation or not.

Didn't the league(I think Tags' fault) screw up when they allowed signing bonuses to be spread over the length of the contract? Because if a team had to count all the bonus in the first year it looks like they would have less under the cap and it would be more like one year contracts that would allow them to cut mistakes easily.

 

[theogt]

As you mentioned, if there is no profit sharing the Jags would have less money to spend. They also must decide if paying 100 million is worth it if they can never win a division dominated by the Texans who would pay $200 million in salaries. The Jags might just decide if they're going to lose, they might as well cut costs.

Maybe. I don't know the numbers to know whether any of this is the case. Neither do you, I suspect.

 

[Skinsmaniac]

Maybe. I don't know the numbers to know whether any of this is the case. Neither do you, I suspect.

Well I obviously made those numbers up. But the idea is that if teams can't compete salary-wise they won't be able to compete talent-wise. And if that happens, winning no longer becomes a concern - making money does, so they will try to maximize profits by cutting costs.