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NFL enters an era of no salary cap
Thursday, February 25, 2010
Column by RICK GOSSELIN / The Dallas Morning News | rgosselin@dallasnews.com
INDIANAPOLIS – The late Gene Upshaw cautioned the NFL owners that if they ever fumbled away the salary cap, they would never get it back.
DeMaurice Smith, who replaced Upshaw as head of the NFL Players Association (NFLPA), repeated that warning this winter.
Starting today – for the first time since 1994 – there is no salary cap. The NFL owners and the NFLPA have failed to negotiate an extension of their collective bargaining agreement (CBA). So the deal heads into its final season in 2010, and there will be no salary cap as the free-agency signing period opens next Friday.
That means NFL teams can spend as much as they want on players. Last year, there was a salary cap of $123 million. Without a cap, there's nothing to prevent the high-revenue teams such as the New England Patriots and Washington Redskins from spending $200 million if they so choose – like the New York Yankees do in baseball.
But in addition to no ceiling, there is no floor. Last season NFL teams were required to spend a minimum of $107 million on players. Now there's nothing to prevent a financially ailing team such as the Jacksonville Jaguars from spending $70 million if it so chooses.
The Yankees spent twice as much money on their payroll in 2009 as did the Seattle Mariners and more than three times as much as the Washington Nationals. The Yankees won the World Series, the Mariners failed to qualify for the playoffs and the Nationals won a baseball-low 59 games.
But the owners and players have already taken steps to prevent such a competitive imbalance in football in an uncapped season.
In the salary cap era, players became eligible for free agency after four seasons. In the uncapped year, players must accrue six seasons before they can be eligible for free agency.
That takes more than 200 players from the draft classes of 2005-06 out of the marketplace this winter. Instead of unrestricted free agents, they become restricted, which means it could cost potential suitors draft picks as compensation for any signings. Pro Bowl wide receiver Miles Austin of the Cowboys is one of those players affected by the new landscape.
Also, the rich won't necessarily get richer thanks to a Final Eight Plan. That restricts the activity of the eight teams that advanced to the conference semifinal round. That group includes the Cowboys.
The four teams that played in the conference championship games – Indianapolis, Minnesota, New Orleans and the New York Jets – can sign a player only to replace one lost in free agency. And the size of the contracts must be comparable.
The four conference semifinalists – Arizona, Baltimore, San Diego and the Cowboys – are allowed to sign players to replace those they lose in free agency. In addition, they are allowed to sign one more free agent with a first-year salary of $5.5 million or more. But they also can sign any number of free agents for less than $3.7 million apiece.
The uncapped year will impact the players in other negative ways. The clubs will not bankroll health care, pension, 401k or severance for the players in 2010. Also, there will no longer be any performance-based pay.
Negotiations will continue between the two sides for an extension of the CBA. The players received almost 60 percent of the total revenues in 2009. With the increased stadium debt – there have been 21 new stadiums built since the original CBA was negotiated in 1993 – the owners want a more equitable split of that revenue.
If the two sides cannot reach an agreement, a lockout looms in 2011.
This will be an interesting off-season.