Note: The original version of this post was oversimplified, did not address some important features of the salary floor, and not up to the standards we try to maintain here at BTB. My sincere thanks to KD Drummond for catching my errors and providing a very concise explanation of the true nature of the floor.
Many of us who follow the Dallas Cowboys have developed some nice, thick callouses concerning the evergreen meme about how terrible Dallas is at managing the NFL salary cap. I was looking at the NFL Players Association public page on how much cap space each team has, and (as of noon on Saturday, March 15, 2014) I realized that it must be horrifying for six NFL teams to realize that they have LESS space than the Cowboys. Since, as we all know after being bombarded with some variation of the story for weeks, the pitiful, revoltingly bad way Dallas handles all things cap-wise is the surest and most inarguable measure of just how the Cowboys are the most terribly run franchise in the history of all professional sports, I'm sure the management of those teams will all be lining up to commit mass seppuku over the unbearable shame of it all.
OK, I think I have exercised my sarcasm muscles enough now. With the NFL teams as a group having already committed something over a billion dollars in free agent contract money (over the length of the contracts), it is not surprising to see a lot of teams getting pretty close to the cap. But what is a bit of a shock is how many teams are still way under the salary floor.
Yeah, that's right. Don't forget that there is a floor, and while it has some of the same funny money fake accounting features that the cap does, teams still have to find a way to get to 89% of the current salary cap, at least in the long run. To simplify matters, for 2014, based on the $133 million cap, the floor is $118.37 million. Looked at another way, that means teams should only carry a max of about $14.63 million in cap space into the new season.
Right now, there are 14 teams that are under the floor. Many are within a few million, and can get over it with one or two contracts, or even the rookie deals. But eight are over $10 million under. And three are ridiculously under. The Cleveland Browns have over $33.7 million in space. The Tampa Bay Buccaneers have almost $46.2 million. And the Oakland Raiders still have a staggering $59.3 million.
This is with the free agent market already drying up as the best players are largely signed already. The teams can't just bring in free agents and randomly overpay them, because you know the other teams would have some issues with that. It has already been established that John Mara of the New York Giants has full rights to meddle with the cap space of any other NFL team.
"Oh, not a problem," goes the argument. "You just pay the money out to the players you already have."
That would make a lot of sense. That's like going out and buying a car, and paying too much for it because you haven't used up your budget. It is not going to run any better or last any longer. You just are not going to have the extra money to spend on anything else.
The fact is that the three teams I listed are now looking at having to either pay too much to free agents they sign, or give out more money to those already on the team. Is it just a coincidence that those three teams were all 4-12 last season?
Now, the floor actually is not a one year deal. Here, in understandable form, is the explanation from KD Drummond of how it really works. (I have included the actual CBA language, also provided by KD, at the end of the article, just so you can see the effort it took him to put this in readable form.)
The salary cap floor is a pretty convoluted thing. It's not figured off of 89% of any years cap. It's 89% of the four-year average between 2013 and 2016, and it's based on total cash spending, not the club's salary cap total for that year. For instance, the 2013 and 2014 caps combined with projected caps of $140m and $150m in '15 and '16 would be $550m. Teams would have to use 89% of that in Cash Spending, or $489m.
The second key is the cash spending designation. This includes signing bonuses for the year that they are paid out, not prorated like what is calculated in each year's salary cap. So if in 2016, a team hands out a bunch of 5 year deals with $15m signing bonuses to get in compliance (cash spending well above and beyond), they could make it right.
The final key is that none of that would really be necessary. If a club falls under the 89% rule (less than $489m over the four years ending in 2016) then they simply make equal payments to each person that was on the team between 2013 and 2016. If they were short $40m they would back pay, dividing up the money, $10m for the 2013 roster, $10m for the 2014 roster so on and so forth.
In essence, teams that have a large unspent amount of the required amount are kicking that problem down the road, and in a way I find more egregious than restructuring contracts of players you still hope to have helping your team. At some point, the money has to go to the players. If they push the money into the current four year period using bonuses, as KD suggested, then they will have to push up their spending in the next. And if they just let it ride and go the route of making it up with "back pay" to the players, then that is a form of dead money that is more egregious than the normal kind we know. At least the regular dead money was based on an expectation of performance that didn't pan out. The back pay is an absolute and total waste, akin to going back and giving your car dealer more money for a vehicle you don't even own anymore.
This is a different face of salary mismanagement, and I think it is worse than anything Jerry and Stephen Jones have ever done with the Cowboys. Dallas may have to resort to bookkeeping gymnastics every season to get back under the cap, but they are doing so because of an earnest effort to field the best team they can and to reward deserving players. When I see teams that are tens of millions below the salary floor and see that they are also teams that are synonymous with "failure" in recent NFL seasons, then I see not only mistakes. I see neglect, even a suspicion in one or two cases of lowballing the players to line the owners' pockets.
That is the reason the floor was put into the CBA. It is meant to force cheapskate owners to pass on a reasonable share of the massive revenues generated by pro football to the men who actually get the hell beaten out of their bodies to bring in the revenue. The salary cap is to try and keep things competitive, but also to keep the pressure to spend an even larger share of revenues on player salaries down. Most of the owners are very concerned that, without the cap, certain other owners (cough) Jerry Jones (cough) would spend through the roof to build a dominant team that would be in the Super Bowl every other year, at least. This would increase the revenues for that team even more, which would give him even more money to work with, and eventually the other teams would have to either concede winning, force a much greater level of revenue sharing, or (horror of horrors) actually have to cut into their own profits to compete. Jerry, for all his faults, believes that you have to spend money on the team to make money as an owner, and his bank account seems to justify his stance. This money is going to get to players in some way, and not using it to field a better product is just blatant waste. The NFL is a business, its product is football games, and failure to spend the required money to improve some teams is just putting a poor product out there.
A rising salary cap is going to lift the floor (since the floor is set at 89% of the cap). And, trust me, not all owners are all that happy about the cap going up. This is a whole new set of problems. Teams that don't have $114 million worth of talent on their roster this are going to have to overpay what they do have, now or in the future. And that is not going to help their competitiveness on the field one teensy bit. It is essentially taking the extra money that the team has to add to payroll out into a parking lot and lighting it on fire, for all the benefit it brings the organization. Yeah, it makes some players better off (and I don't begrudge any NFL player a single cent he and his agent can wring out of the teams), but it does nothing to improve the product on the field, especially any back pay that comes out. That may satisfy the letter of the law, but it certainly circumvents the spirit, I think.
For all their faults, the Cowboys cannot be blamed for not trying to do exactly that. I think some teams can be faulted for avoiding it, because it costs money. I think the worst teams at managing the cap are not the ones who have to work to get under it. Teams that are scrambling to get over the floor are the ones that do a terrible job. And I think it shows in the way the organization performs overall. Those three franchises listed above are enough of an argument to convince me. So I'm going to continue to blithely ignore everyone having a cat about Dallas and the cap. At least they are sweating how to make the team better, not how to hang onto every possible dollar and running the risk of eventually throwing cap money away with no chance of benefit to the team and, ultimately, the fans.
Here's the section of the CBA that covers the salary floor, followed by the section that defines Cash Spending.
Section 9. Minimum Team Cash Spending:
(a) For each of the following four-League Year periods, 2013-2016 and 2017-2020, there shall be a guaranteed Minimum Team Cash Spending of 89% of the Salary Caps for such periods (e.g., if the Salary Caps for the 2013-16 and 2017-2020 are $100, 120, 130, and 150 million, respectively, each Club shall have a Minimum Team Cash Spending for that period of $445 million (89% of $500 million))
(b) Any shortfall in the Minimum Team Cash Spending at the end of a League Year in which it is applicable (i.e., the 2016 and 2020 League Years) shall be paid, on or before the next September 15, by the Team having such shortfall, directly to the players who were on such a Team's roster at any time during the applicable seasons, pursuant to the reasonable allocation instructions of the NFLPA.
(c) Cash Spending in a League Year shall consist of the sum of: (1) total Paragraph 5 Salary amounts earned or paid or committed to be paid to players; (2) signing bonus amounts earned or paid or committed to be paid to players (including amounts treated as signing bonus) without regard to proration and applying the valuation rules that apply to deferred Salary specified in Article 13, Subsections 6(a)(ii) and 6(d)(iii); and (3) any other non-Benefit amounts earned or paid or committed to be paid to players in that League Year (applying the valuation rules that apply to deferred Salary specified in Article 13, Subsections 6(a)(ii) and 6(d)(iv)) including, but not limited to, incentives, roster bonuses, reporting bonuses, offseason workout bonuses, weight bonuses, grievances settled, grievance awards, injury settlements or Paragraph 5 Salary advances. League-Wide Cash Spending shall consist of the aggregate of all Cash Spending in a League Year. Team Cash Spending, for each respective Club, shall consist of all Cash Spending by such Club.