The Scheme in Team Salary

The Scheme in Team Salary

July 31, 2008

By Slavica Milosevska for Football Reporters Online

Since Walter Camp in 1867 established a simple game of football to just play for fun, nothing about it has been the same. Point rules, regulations, salaries and politics have grown into what is now the NFL. William Pudge Heffelfinger was the first man to be paid to play the game for $500 in 1892, then in 1893, the Pittsburgh Athletic Club signed Grant Dibert to the first known contract. Nearly thirty years later in 1920, the first APFA trade was Arkon's Bob Nash to Buffalo for $300 and 5% of all gate receipts. These first timers helped set a precedent for the intricate scheme of revenues and team salaries.
The NFL Players Association (NFLPA) was founded in 1956 when players demanded a minimum league-wide salary and fair benefits. Owners ignored these requests, leading to an antitrust lawsuit in the United States Supreme Court forcing owners to oblige but they still managed to deviate from a CBA, leaving players unsatisfied. The 1982 strike finally led to the ratification of the CBA that lasted until 1987. The NFL and the NFLPA officially signed another seven year CBA in 1993 that has been extended and amended for over two decades. The 2010 season will be uncapped and free agency restrictions are applied because it will be the Final League Year (FLY) of the CBA. Would we see a similar antitrust suit and strike in 2011?
The upcoming FLY was supposed to be in 2012. Owners shortened the 2006 six-year CBA extension to after the 2010 season. To cut costs, owners could attempt locking out players in 2011 to eliminate free agency with its payouts. Clubs would not be required to monetarily support different benefit programs. NFLPA's Executive Director Gene Upshaw predicts that when there is an uncapped season, the salary cap would never come back. A football hierarchy could approach when wealthier teams obtain better athletes and make higher revenues than the less fortunate teams. However, the threat of a lawsuit or strike could rectify something amenable to players.
For the last two years, the salary cap has risen $7 million annually making the 2008 season's hard cap $116,729,000 million. The 2009 cap is already set at $123 million. The cap is just under 60% of all 32 team's total revenue during a League Year including earnings from ticket and merchandise sales, TV contracts, naming rights and local advertising. Coaches, assistants, trainers or associates do not fall under team salary. We all know that players are paid more than handsomely for the love of playing football. In a recent interview, Chicago Bears DT Tommie Harris spoke about players being undeserving because as he put it, “we play a kids game and we get paid a king's ransom.”
An NFL game alone has the most turn out rate of 67,000 attendees in comparison to other American professional sports leagues. Since football has fewer games per season compared to other sports, the total revenue for NFL games in only 20% of baseball, which has a much longer season but less of an average per game crowd. If there were a lockout or strike, teams would lose much more money for missed games because the NFL is so profitable.
Teams still exceed the cap due to rising salaries, but clubs have means of outwitting the system. For instance, signing bonuses do not count toward the cap, so giving a new player a grand signing bonus really enables more cap room for the rest of the team. A signing bonus is given the first year, however it is prorated in the salary cap over the contract length. Team owners can spend more in the cap this way for other players.
One problem for the owners is that if a player is cut or traded the bonus cash is no longer prorated and must be paid in full that year which will count under the cap. Salary is back-ended meaning a player gradually receives more money each year and the most loot in the last year or two of their contract. In the latter, this is when owners will drop players to save money and spend a ridiculous amount of money to sign a rookie with no pro league experience.

Players deserve more compensation year after year for ongoing injuries and risks they impose on their bodies, not to get kicked to the curb. The NFL teams won't stop milking that cap for whatever its worth and not sharing with vets who were their backbone. NFL owners like to say the cap allots teams to sustain their best veterans, but these days, we see rookies with higher pay. Where else have you seen a new employee acquire more compensation than his established co-worker with a job akin?

The Indianapolis Colts owners are the most generous to its veterans according to their positions. In 2007, DE Dwight Freeney signed a $72 million contract with $30 million guaranteed after his rookie contract expired. Freeney played in the pros for five years to deserve this amount when rookie QB Matt Ryan stumbles onto the Atlanta Falcons with guarantees of $34.75 million and also a $72 million deal.

You may say that QBs are generally paid more than DEs.
Well then, look at fellow Falcon teammate QB Joey Harrington's deal. This will be his seventh year in the NFL. He originally signed a two year $6 million deal in 2007, however they cut his salary to adjust the cap for the draft. Harrington was to receive $2.5 million in his second and final season, but the salary cut left him $1 million, a $700,000 base and $300,000 bonus. Here are some other contracts to look at. LT Jake Long was the first draft pick signing on with the Miami Dolphins for $57.75 million and $30 guaranteed. Fourth pick RB Darren McFadden has $26 million in guarantees and a $60 million deal with the Oakland Raiders.

It seems easier for owners to hand over $30 million in guarantees to rookies. Promising veterans are being dropped to stay under the cap. Upshaw doesn't believe in having a salary cap on rookies. Players negotiate their salaries based on a cap within a cap. Under the Rookie Pool this year, the entire league's available cap money is $140 million or 2% of total revenues. The first round pick is paid the highest amount unlike later round draft picks because they are working under a limited budget. Rookie salary also depends on contract length, so the first 16 picks of first-round draft obtain a six-year contract in contrast to second half of first round picks that get a maximum of 5 years. All others sign for a maximum of 4 years. Rookies can negotiate performance incentives to escalate salary as well. The CBA has guidelines for this not to be deducted from the overall Rookie Pool.

The guidelines do not apply with the CBA out of the picture. When 2011 rolls around, many issues would arise for everyone involved in the NLF. More than 60% of total revenues could go to players. Owners could stock up on players and would be free to spend without restrictions. Rookie contracts would go up even though that has been constant. Revenue sharing would no longer disperse equally throughout all 32 teams, so clubs with the most leverage could have better players and be more profitable. Since football is such a large part of the American culture and the NFL is a jackpot and with the greed in the business associates, a strike is unlikely.