The NFL salary cap is becoming a bit of an irritant for the Dallas Cowboys. The team famously is being docked $10 million, split over 2012 and 2013, for having the temerity of not observing proper restraint, as defined after the fact by Roger Goodell and other NFL owners, during the supposedly uncapped 2010 season. But the team has forged ahead by restructuring contracts and planning for the 2014 season, when greatly increased television revenues will cause an expected jump of significant proportions.
Or maybe not. New England Patriots owner Robert Kraft has come out and stated that it ain't gonna happen.
"I don't really see that happening," Kraft said. "I don't think what happened in 2006 will happen in the future here, because if you understand the labor agreement and the long-term part of this, there will be a smooth growth."
This could create some major headaches for the Cowboys and a lot of other teams. Not to mention the players.
A deeper look at things after the jump.
The statement by Kraft seems to be contrary to logic and simple math. The new television contracts contain a lot more money in them. As originally reported in December, the three broadcast networks are going to pay the league much more annually:
That total of approximately $3 billion annually for the three deals is up from about $1.9 billion per year currently for the contracts with the three networks.
Now, a little subtraction says that the league will get $1.1 billion more each year from NBC, CBS and FOX. And that is in addition to the extra money from Disney, parent company of ESPN, and DirecTV, according to another report. But when I got to looking a little deeper into that article, I saw this.
Rights fees for all three networks will increase by about 6 percent or 7 percent a year, according to three people with knowledge of the talks who were granted anonymity because they weren't authorized to disclose the terms.
That seems to be confirmed in another account.
Monetary figures were not announced, but CBS Sports.com said it had learned the contract calls for a 7 percent increase annually and the final year of the deal will bring the league $3.1 billion.
So hold on. The assumption, at least around here, seemed to have been that there would be one big jump in 2014, but when you read these descriptions, then Kraft seems to be right. The cap would increase incrementally over the length of the current CBA, without the major, immediate hike in two years everyone has been talking about.
This would mean that teams are going to have to be a bit more cautious. Obviously teams cannot plan on tens of millions in additional salary cap money in 2014. They will see that smooth, steady growth Kraft talks about instead, and must plan accordingly.
It's that famous devil in the details. Yes, the NFL is going to see a huge increase in revenues - at the end of the contracts; in 2021 (for Disney and DirecTV) and 2022 (for the broadcast networks). But the figures are going up gradually, which actually makes a little more economic sense when you think about it.
And Bob Kraft is acknowledged to be an expert on these matters, even though the NFLPA seems to feel differently.
With Kraft's involvement in last year's collective bargaining negotiations, everyone around the NFL credits him for his knowledge of the situation. There's a prevalent belief that Kraft understands the ins and outs of the new CBA as well -- if not better -- as anyone.
But league sources told NESN.com the NFLPA has advised players and agents that the salary cap will see "significant growth" in 2014 "and beyond." So, there's a stark difference between Kraft's quote and the NFLPA's message.
Are we talking a difference in semantics here? Or is there going to be a massive sense of disappointment, and maybe even betrayal, in 2014 if the salary cap sees an increase in the 6% to 7% range? The NFLPA may be setting that up. If there is a major disconnect between expectations and reality in a couple of years, the supposed labor peace guaranteed by the new CBA may be a bit of an illusion. Or, given the fact that there is not a lot the players can do about it short of just not playing, and not getting paid, they may just take this out on NFLPA President Kevin Mawae and Executive Director DeMaurice Smith. In that case, the ire may largely dissipate, given the brevity of most NFL careers and the fact that the cap will have gotten much larger by the time the CBA is up for renegotiation.
But in reality, the increase in the cap will be less, because television revenue is only part of the total. When you factor out the money from ticket and suite sales and other income, the actual increase is more likely to be around 4% or 5%. So we may be talking a figure of around $5 or $6 million each year. Over the eight years of the new contract, that adds up, but slowly. Just like Kraft says.
One thing that does come out of the article is a bit of a miserly tone from Kraft. I am sure he did not intend for it to come out that way, but it does sound like he is clearly a part of the collective NFL ownership that was miffed at the Cowboys and the Washington Redskins for spending like an uncapped year was really an uncapped year. And you can see why the players might tend to be a bit distrustful of the owners who seem to want to keep more of the revenues for themselves by minimizing the amount they pay to the actual talent on the field.
Hopefully, this is a subject that Jerry and Stephen Jones have a good grasp of. The recent free agent contracts seem to be structured in such a way that the team can get out of them in a couple of years with a manageable cap hit. And frankly, I just don't see Jerry Jones getting sandbagged on something like this.
Perhaps the real issue is that the fans and the sports media just did not read the data correctly and a bad story was repeated again and again. The league did not seem to be overly concerned with being clear and open about the numbers, something that happens when people are looking at billions of dollars, a good chunk of which they hope to put in their own pockets.
Hopefully this will help you have a better idea of what is really going to happen.
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