Cap Space in NFL

[Dave Lap]

I heard Dick Cass say on radio this morning that teams do not have to spend up to their ceiling right away. There's a considerable ramp up period. 3 years before teams have to use all their money.

The effect should be that teams will not be as desperate as previously thought to go out and spend heavily. At least not right away.

That should keep the demand for FA's down and with demand lessened the salaries should not go as high as thought.

Maybe this is old news to some but it's new to me, and welcome news at that.

[GOTA]

My understanding is that they have to get to $108 million this year which is 90% of the cap ceiling. That's not an issue for the Ravens but some teams like the Bucs are over $30 million under that number.

[Ravenswintitle]

It's not a 3 year window - the cap floor was raised this year and the combined league must spend 99% though 2012. I think it is 93% for each individual team.

[Beau Petard]

GOTA--
I have to wonder about the way that 90% floor impacts teams that have seemingly gone on the cheap, like TB or Cincy. They may be "forced" to spend more under the new agreement, but will they end up paying more to their current roster guys (perhaps to keep the peace), will they go out and sign "name" guys for big $$$ (maybe pissng off current roster guys), will they actually get better by spending on quality talent, etc.

Also, do I understand correctly that some teams - ones that are "losing" money - will get a subsidy of sorts from the more profitable teams, or am I misunderstanding?

Thanks...

[GOTA]

GOTA--
I have to wonder about the way that 90% floor impacts teams that have seemingly gone on the cheap, like TB or Cincy. They may be "forced" to spend more under the new agreement, but will they end up paying more to their current roster guys (perhaps to keep the peace), will they go out and sign "name" guys for big $$$ (maybe pissng off current roster guys), will they actually get better by spending on quality talent, etc.

Also, do I understand correctly that some teams - ones that are "losing" money - will get a subsidy of sorts from the more profitable teams, or am I misunderstanding?

Thanks...

Peter King was saying that the Chiefs who are one of those cheap teams is right now looking at early extensions for Flowers and Carr for the exact reasons that you describe.

The Packers were notorious for extending key guys early to get to the cap floor in the past. 2 years ago when they extended Rodgers at the last minute really bothered a lot of players who called them out for it. That move got them exactly at the floor.

The last thing you are referring to is a version of the MLB luxury tax. It's has nothing to do with teams who are losing money. It's a shifting of a small percent of money from a high revenue team like the Cowboys to a low revenue team like the Bills. It's possible that the Cowboys with enormous debt payments for their stadium actually lose money while the Bills who don't have those type of payments make money. This was what the high revenue owners had to do to convince the low revenue teams to spend more. In theory it should lessen the blow of the higher salary floor.

[Shas]

Here is what Cass said on the radio. He said that reports are wrong that teams like Tampa and Cincy are obliged to spend a bunch of money this year in order to get above a salary floor. In fact, there are no floor restrictions for the next two years. This was done out of fairness, so teams aren't throwing money around willy nilly when their rosters were already nearly set.

There will be a floor issue that comes into play starting in year three of the new CBA. That will stipulate that teams must spend at least 89% of the cap ON AVERAGE across years 3-6, and then again 89% of the total cap on average across years 7-10.

This is on a cash basis. It means that some years teams can be below the floor, and other years they can be above the ceiling, as long as the four-year average is adhered to. The distinction about cash basis is due to signing bonuses. There will be years when a team gives out big signing bonuses. From a cap perspective that gets spread out over the life of the contract, but from a cash basis, it doesn't. So the four-year average assures that teams are being honest with their spending but have flexibility to extend cash bonuses.

Cass says it's a non issue for him -- he will never think about the rule because they always spend to the cap.

The league-wide mandated average of spending to 99% of the cap during these two four-year cycles is correct.

The upshot of all this is that the Ravens should be in a better position this year and next to compete for an expensive free agent like Nmadi or Joseph, if they want, without fear that a team like Tampa has money they have to burn, or that Cincy has an artificial motive to retain Joseph.

[Shas]

While we're discussing cap, anyone aware of this claim, which I read on an NFL-related blog?

For the teams that are big spenders and are already over the cap going into this year, they will have some flexibility in meeting their cap number. Teams will be allowed to use $3.5 million toward veteran salaries that would otherwise be earmarked for performance-based pay. In addition, teams will be allowed to borrow $3 million from a future year’s salary cap. These two provisions will allow teams to stretch the 2011 salary cap from $120.375 million to $126.875 million.

I had never heard that one. Perhaps it's a provision that recognizes that rosters were set based on bigger cap numbers two years ago. The assumption would be that teams can't turn on a dime to get under the cap just like they can't turn quickly to get above a floor.

So I wonder if it's accurate? Everything I had read put the Ravens about $2MM above the $120MM cap before they cut the four veterans. If it's true, they didn't actually have to clear space (though I'm not sure about the $4MM they need for rookie signings.)

Which is more evidence they may be clearling space for a big signing.

All I know is that I'm hearing a lot of inaccurate or conflicting reports.

Here's another new CBA rule that has been misstated by the media in many cases: the rookie wage scale. I've heard claims that the new wage scale will abolish rookie hold outs because it's predetermined what you'll earn based on where you were drafted. Not true. There is not a wage scale. There is a rookie wage pool. Teams are given a maximum dollar amount they can spend on rookie signings. But there is nothing stopping an agent for asking for the moon for a first round player, assuming later round players will get less. That's how the rookie wage deal was explained to me at least.

[B-more Ravor]

While we're discussing cap, anyone aware of this claim, which I read on an NFL-related blog?

It's not entirely accurate.

Teams can borrow $3M ($1M each for 3 players) from future caps and those amounts are deducted from the Cap in 2014-2016. This can only be used to offset salaries of veterans with 5 or more years of accrued service. Teams will have $1.5M to borrow in 2012.

The $3.5M, as I understand it, has already been calculated into the $120.375M Cap and is not in addition to it.

The final version of the "Transition Rules" includes no reference to that amount.

So I wonder if it's accurate? Everything I had read put the Ravens about $2MM above the $120MM cap before they cut the four veterans. If it's true, they didn't actually have to clear space (though I'm not sure about the $4MM they need for rookie signings.)

The $1.8M over number did not include the RFA tenders, so once those are added in, they would be waaay over the Cap. These moves were necessary to be able to re-sign Yanda and anyone else they want.

IMO, unless they get Ngata extended, they have no ability for a big splash (that is, unless they release or restructure others).

[Shas]

.

IMO, unless they get Ngata extended, they have no ability for a big splash (that is, unless they release or restructure others).

Thanks for the clarification. I've heard media types locally suggest that with Ngata redone, and with the cuts, they could have $20 million in cap space to go out and throw their weight around. Never sounded right.

Besides, throwing big money at Nmadi is not Ozzie's style. I could see him looking at Joseph as right player right price, at half the dollars. But even that is a stretch.

[Ravskins]

B-More, what's our current (after Yanda's contract) position with the Cap or is there not enough information yet to determine?

[Beau Petard]

shas--
B-ravor beat me to the punch with an explanation for the "extra" CAP money, but I thought I recalled a thread that mentioned this before - check this one.

B-ravor--
What's the smart money saying about how Ozzie will deal with Ngata's contract? Many posters have speculated and offered scenarios which I'm afraid are more wishful thinking. Is it possible that the Ravens will go with Ngata's contract "as is"? That seems a little risky to me, given the overall experience level with the team as well as several areas that seem to be begging for resolution --
=Gaither's status/quality OT support
=blocking FB
=Kindle - will he play or not
=LB transition - Lewis can't play forever (can he??? ), and I don't see any indication of where the D goes if he's injured this year, or doesn't play next year
=OC - is Birk viewed as being here for several more years?

I'm sure there are other areas that need addressing, but I'm trying to get my brain around this whole deal. Thanks...