"Money itself isn't lost or made; it's simply transferred from one perception to another."
--Gordon Gekko in Wall Street
The big story from the NFL owner's meeting is the grievance the Redskins and the Cowboys filed against the NFL over the cap penalty levied against these respective teams. I want to take more technical look at this story and analyze the cases that will likely be argued by both sides to the arbitrator.
The Cowboys and Redskins Case: The We Did You All a Favor Argument
A popular opinion is that the Cowboys and Redskins should argue that the other teams wanted to engage in collusion and use an unwritten agreement among owners to suppress player salaries in the uncapped year; the Redskins and Cowboys wouldn’t play ball and engage in the collusion, and are now being punished. The problem I see with this approach is that during the uncapped year, when the league was not governed by the CBA, the players brought claims of collusion against the NFL. As part of the Brady vs. NFL settlement, the NFLPA signed a global settlement against all past claims of collusion. There is the possibility that newly revealed evidence leaked from the Cowboys and Redskins could reopen the collusion claims, but I don’t think Jones and Snyder want to unravel the CBA and torpedo the entire NFL over these fines. But who knows, they might be just that mad over the penalties.
In my opinion, the Cowboys and Skins strongest case lies in the argument that teams restructure contracts all the time in order to manage or create cap space, and that the contracts in question were approved by the league. They can argue that the contracts that were restructured in 2010 were no different than the contract restructuring that occurs all the time around the league in any given year. Additionally, the Cowboys and Redskins can argue that they simply took advantage of a very technical rule known as the “voidable clause” that allows signing bonuses to be accelerated and converted into an “option bonus” in any given year. They just used the rules to the best of their ability.
Furthermore, the Cowboys and Redskins could argue that by restructuring the contracts in question, they were setting an example for other owners by demonstrating good faith to the NFLPA by making more money available to spend on players in future years. After all, the NFLPA had no problem with the Cowboys and Redskins, two of the biggest spending teams in the league. The NFLPA’s problem was with the miserly owners of the league who wouldn’t spend money. Jones and Snyder can argue that what they did was strategically in the interest of the owners by demonstrating to the NFLPA that there would be plenty of money to go around in the future, and if anything those deals contributed to the spirit of the agreement for an uncapped year and encouraged the NFLPA to work towards a new CBA, which was ultimately to the advantage of all the owners.
The NFL Management Council’s Case:
There is a common misconception that the league is accusing the Redskins and Cowboys of violating the salary cap in 2010, a year when we all know there was no salary cap. You see this question posted over and over. How can Dallas be punished for salaries in an uncapped year?
The NFL owners’ problem with Dallas and Washington had nothing to do with the amount of money they spent in 2010. Everyone understands the most basic part of this fiasco, 2010 was an uncapped year. The aspect of this problem that seems lost on everyone commenting about the cap penalty is the fact that Jerry Jones and Daniel Snyder manipulated contracts to create additional cap space in future years.
The owners' position is that the Cowboys and Redskins rigged contracts that were already on the books prior to the uncapped year in such a way as to avoid cap hits in future years, thus magically creating future cap space out of thin air. Dallas and Washington did not front-load newly negotiated contracts into the uncapped year. They renegotiated existing contracts that were already on the books to dump future years’ proration into the uncapped year. There is a big difference between the two.
“While the fact that 2010 was uncapped has given the impression that there were no rules regarding how teams approached their cap situations that year, league sources said Sunday that it wasn’t a matter of how the Redskins and Cowboys spent money that season that violated the spirit of the cap. It was their decision to dump big cap hits into 2010 that amounted to an unlevel playing field for Dallas and Washington in 2011 and beyond.”
In short, the issue wasn’t with the 2010 year per se. The problem was how those 2010 contracts affected the cap in future years, years that would be governed by a new CBA and when there would be a salary cap.
“It’s the going forward aspect, not what happened in the past, in regards to their spending in 2010,’’ said the league source…by them dumping salaries that year into 2010, it’s how it affects the competitive balance in the future. You’re missing the point if you look back at any effect it might have had that year. It’s the effect of not having those cap charges on the books now, and the cap acceleration that they avoided.’’
Why Did the League Approve the Contracts if The Contracts Violated Any Rule?
The league did not know what the future CBA would look like, so the league did not feel comfortable denying the restructured contracts of Albert Haynesworth, DeAngelo Hall, and Miles Austin, at the time they were submitted.
One person familiar with the situation said the NFL had no way of knowing what impact the contracts would have down the road because the league and union still were negotiating a new collective bargaining agreement. Consequently, the Management Council felt it would be wrong to disapprove the deals.
The fact that the league didn’t feel it should disapprove the contracts, however, does not mean the owners did not disapprove of what the Cowboys and Redskins were attempting to do. This is where the reported warnings came into play. The league warned the Redskins and Cowboys that even though they would not disapprove the contracts, there was a strong chance that once the new CBA was approved, if it was obvious that the contracts in question created cap relief in future years, the league reserved the right to penalize the offending teams to realign competitive balance.
Let the Battle Begin:
Who knows how this is going to play out. My disdain for Jerry Jones is no secret in these parts, and I am on record with my opinion that regardless of whether or not Jerry in fact violated any official or unofficial league rules, Jerry was warned that the other owners were upset with his creative cap management and that they might attempt to exact revenge or punishment in the future. Jerry gambled and for now the fans are the losers in this mess; that extra 5 million would have a gone a long way towards adding critical roster depth or another top tier free agent in addition to Brandon Carr.