With hope of having an extension to the NFL's collective bargaining agreement with its players seemingly no closer now than two days ago, there are many questions being asked by fans as to what the big problem seems to be. There are several, but here is a brief overview of the issues and ramifications of having no CBA between owners and players.
The first misconception that should be put to bed immediately is that a work stoppage is coming. March 5 is not a drop-dead date for the league and its union, but it is significant. The primary problem with no new CBA being finished before the first "official" day of the 2006 NFL business year is that it alters how contract language is reviewed. It is commonly agreed that if a new CBA was in place, each team would likely realize about $10 million in additional funds against the salary cap – which currently is set at $94.5 million. Without a new CBA, the problems begin to take shape.
When the current extension to the CBA was agreed on three years ago, it was known that 2007 would be an "uncapped" season – meaning there would be no salary cap and teams could spend as much or as little as they chose. In such a scenario, teams with deep pockets (and flamboyant owners willing to spend for a championship) like the Redskins and Cowboys could go after any and every top-end free agent they chose without ramifications to the salary cap. When instituted, the plan was the uncapped year to serve as a deterrent from letting a long-term deal get too near to see the window of opportunity close. As of today, it would seem we have gone past that point.
The second major point of contention is how revenue is shared among the 32 NFL teams. For owners like Jerry Jones and Daniel Snyder, not having revenue sharing in totality could be a good thing. Each of them takes in or is going to take in about $200 million in stadium-related money and merchandise sales that smaller market teams without state-of-the-art stadiums or wildly popular merchandise sales don't have, like the Vikings and Jaguars. The ability to share revenue from TV contracts allows teams like the Vikings and Packers to compete with more lucrative franchises like the Giants, Cowboys, Bears and Redskins. For the "haves" of the NFL world, they aren't nearly as interested in getting a new deal done, because they could benefit more if the talks break down and an uncapped season becomes reality.
The biggest hurdle in revenue sharing is how much money and what money is allocated to the players by guarantee. The owners are currently offering a figure in the neighborhood of 53-54 percent. The players union, led by former NFL great Gene Upshaw, is asking to have that number closer to 60 percent – a position the NFL refuses to budge on. Until the two sides can compromise on this sticky issue, nothing else will seemingly matter.
From the current salary cap perspective, a couple of critical changes will take place if an 11th-hour deal isn't brokered by midnight Sunday. The most critical among them are contracts that include "likely-to-be-earned" contract bonuses. Under the current deal, those bonuses don't count in the year being played – those that are reached are attached to the following year's salary cap and those that aren't come off the cap and become available money for the team to use the following year. Under the terms of the current CBA, in the final year before the uncapped season, all performance bonuses under the likely-to-be-earned designation count against this year's salary cap – which is why many teams are scrambling to get under the cap and will likely result in numerous highly-paid veterans forcibly being cut in the next 24 hours.
A related problem deals with those players that will be released. Under the old system, if a player was released, teams could spread the cap hit of the unused portion of the signing bonus over two seasons or have the entire amount deferred to the following year in some cases. With an uncapped year looming, all of that money would count against this year's cap – making those releases even more painful for teams in trouble and trying to pull themselves out from under a burgeoning cap.
The players will feel the sting of this too, especially those hoping to break the bank in free agency. For the purpose of example, if a team signs a player to a standard seven-year deal – the most allowed under the current CBA – and pays him a $14 million signing bonus, his cap number becomes the total of his base salary for that season, plus $2 million pro-rated for that year's portion of the signing bonus. A player signing a seven-year deal with base salaries of $1 million, $2 million, $3 million and $4 million, would have a cap number of $4 million in 2006, $5 million in $2007, $6 million in 2008 and $7 million in 2009. Without a new CBA, the longest a player can have a signing bonus pushed out is four years. What that means is that an identical $14 million signing bonus would mean that same player's cap number would be $5.5 million in 2006, $6.5 million in 2007, $7.5 million in 2008 and $8.5 million in 2009.
With teams being leery of getting into long-term deals with players and not being certain of how the CBA issue will play out, many will be gambling that it goes one way or the other and teams that try to get too cute with clauses in contracts could get burned if the CBA deal doesn't fall the way they believe it will. The result for this year could actually be good news for the Vikings, since they're one of the few teams with money to spend. Many teams are struggling just to get under the cap and won't have a lot of money to spend, lessening the impact of many players who enter free agency looking for competitive bidding and may find a third or more of the teams unable to do more than "mid-level" purchasing.
A couple of final issues that the players union wants changed is the policy on franchising players and the cap on the pool of money teams are allowed to sign draft picks. These issues seem much less of a sticking point to a final solution, but could serve as potential stumbling blocks to getting a final agreement.
If today comes and goes without a new CBA, it's not the end of the world. But it isn't a positive sign either. The closer the league gets to an uncapped season, the more chance there will be of a stronger rift building between the two sides. In the end, the ultimate solution will have to be compromise. The owners and players will likely have to find a revenue sharing number for the players that isn't what either ideally wants – likely in the neighborhood of 56 percent in the first two or three years and 57 or 58 percent in subsequent years. The owners may win on the rookie pool, but it's likely that a new system of franchising – perhaps not allowing a player to be franchised two consecutive years, will be a concession to win that. But most importantly will be to keep a salary cap in place. The lack of cap has ruined baseball in the minds of many fans and football doesn't need to start going down that fraught-with-portent road.
Many of us that have followed the NFL for years believe a deal will get done before an uncapped year begins in 2007. For all the bravado and chest-pounding we've seen from both sides in recent days, that isn't unusual in contract negotiations. But typically, when everyone has something to lose and so much to gain with the current wave of popularity the NFL has with sports fans, it would seem insane to allow that goodwill to get lost due to what would likely be perceived as little more than greed. With so much to lose, this isn't a time to panic for either side. The pie is big enough for everyone to get a slice and leave the table happy and full.
* Capology 101 – As long as we're trying to shed some light on what are complicated money issues, some people wonder how the salary cap works and how teams can be so far over or under that cap. For example, let's use Bills offensive tackle Mike Williams to illustrate the point. Williams was taken on the first round of the 2002 draft (three picks ahead of OT Bryant McKinnie). Williams was released for cap reasons by the Bills. He was scheduled to have a cap number of $10.8 million. By releasing him, the Bills saved $4.9 million vs. the salary cap, but are still penalized $5.9 million for the pro-rated signing bonus Williams had remaining on his contract. However, after this season, that $5.9 million will go off the books and give the Bills that money added back to their salary cap if there is one in 2007. One of the reasons the Vikings have so much money to spend this year is because Randy Moss went off the books and players who had high first-year salaries like Fred Smoot and Darren Sharper, will have more team-friendly cap numbers in 2006.
* The nervousness over an uncapped year in 2007 was evident in the amount of players franchised this year. In 2005, there were 12 players franchised – John Abraham, Shaun Alexander, Drew Brees, Donovin Darius, Darren Howard, Edgerrin James, Rudi Johnson, Orlando Pace, Julian Peterson, Corey Simon, Adam Vinatieri and Charles Woodson. This year, there were just three – Abraham again, Detroit OT Jeff Backus and Bills CB Nate Clement.
* How franchise and transition numbers are determined can be a bizarre process. Daunte Culpepper is listed as No. 3 among QBs for salary in 2005 at $8.46 million. Shockingly, he was ahead of Peyton Manning and Tom Brady, but behind Joey Harrington ($8.49 million in 2005 salary money).
* Running backs and wide receivers also don't seem to match up when it comes to salary they received in 2005. LaDainian Tomlinson received the most with $8.07 million – more than $2.2 million ahead of any other running back. But the rest of the top 10 – in which transition salaries are based – include Ahman Green at No. 3 ($5.63 million), Curtis Martin at No. 4 ($5.6 million), Jamal Lewis at No. 5 ($5.34 million), Marshall Faulk at No. 8 ($4.03 million) and Kevan Barlow at No. 10 ($3.57 million). Of the top 10 RB salaries in 2005, six of them didn't finish in the top 20 among NFL rushers.
* At wide receiver, the situation is even worse. Isaac Bruce had the highest base salary among wideouts with $9.24 million. The other four that made up the franchise tag number were Amani Toomer, Rod Smith, Jimmy Smith and Eric Moulds. Also in the top 10 were Roy Williams, Keenan McCardell and, inexplicably, Dennis Northcutt of the Browns.
* Some Vikings factored into the numbers that determined franchise and transition tags. Culpepper was No. 3 among QBs as mentioned earlier, Jim Kleinsasser was sixth among tight ends at $2.35 million, Pat Williams was third among defensive tackles with $6.07 million, Fred Smoot led all cornerbacks with $9 million in total salary and Darren Sharper was second among safeties with $4.15 million.
* The Seahawks are trying some last-minute negotiations with Shaun Alexander to keep him from hitting the open market. Although the Vikings have shown no interest outwardly in Alexander, most observers see the Vikings and Cardinals as the most likely to bring him into the fold – even though Dennis Green has also indicated he doesn't have an interest in signing him.
* One player the Vikings might have had an interest in was Bears guard Terrence Metcalf, but the Bears took him off the market by signing him to a six-year, $12.5 million deal.
* Out of Ravens Country comes this: it seems the team has cooled on the idea of trading for Daunte Culpepper. They still cling to the fading belief that the Vikings will cut him and, if Kerry Collins – as expected – becomes available, he could be a less-expensive QB option. They're also said to be looking at DeAngelo Williams, a running back some have speculated would be a great fit for the Vikings new offense, as a potential choice with the 13th pick. If so, it would be a departure from the current Ravens offense, which has lent some to believe their primary RB object of affection in the draft would be USC's LenDale White.
* A Minneapolis judge sentenced Chiefs defensive tackle Saousaolii Siavii to 80 hours of community service for his role in an altercation outside a Twin Cities hotel. Siavii was charged with fifth-degree assault for an altercation with a doorman at the hotel, who is said to be suing Siavii in civil court for damages.
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