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The Future Of The Salary Cap

With the yet-to-be-arbitrated $10 million cap penalty hanging over their heads, the Dallas Cowboys are very interested in what is going to happen to the NFL salary cap in the future. This is a topic that affects all the teams in the league, and coming up with a satisfactory solution for this was supposed to be one of the main accomplishments of the new CBA. The Cowboys managed to do quite well in free agency despite the retroactively imposed penalty, but Jerry and Stephen Jones could certainly use a little more cap room to work with as they continue to try and bring the glory days back to Dallas.

Related: Cowboys 2012 Free Agency: ESPN Gives Out Grades

But as more information emerges about the actual numbers involved, the widely expected sharp increases seem to be melting away like an ice cube on a Texas sidewalk in August. I have written previously on the apparent difference of opinion on what the salary cap is going to do in the next few seasons. New England Patriots owner Bob Kraft flatly stated that the cap was likely to be flat for the next few years, which flew in the face of everything I had seen before that. Now Houston Texans owner Bob McNair has entered the discussion, and he backs up what Kraft says - and goes a little further.

"It is staying pretty flat for several years," McNair told Daniel Kaplan of SportsBusiness Journal while departing last week's league meetings. McNair added that, after 2014, the cap will "gradually" increase.

Kaplan's report also confirms that the union borrowed against future years in order to pump the cap in 2012 from as low as $113 million per team to $120.6 million per team, not much more than the $120.375 million per team in 2011. The same thing will happen in 2013, which means that gains to be realized in 2014 and beyond will have already been, to a certain extent, consumed by the players in order to drive up the numbers in 2012 and 2013.

This just is not good.

I'll get into why after the jump.

There are several things I find disturbing about all this. The first is the simple, selfish reason that I am a Cowboys fan, and this is a trend that runs exactly the opposite of what would be best for my team. The best thing about Jerry Jones is that he is fully prepared to spend as much money as the league will allow him in order to build the best team he can. If the NFL salary cap were to disappear, the Cowboys would become the Yankees of the NFL: The best team that money could buy.

For all the negative things that you may feel about Jerry, there is one area in which he is not only very good, he is head and shoulders above the rest of the league. He is unequaled in his ability to build the Dallas Cowboys as an international brand. He has done such a good job that the team has stayed the premier draw in the NFL despite a lengthening Super Bowl drought. And Jerry realizes that the longer this teams wanders in the desert of no bling, the harder it is to keep that cachet. He wants, and wants badly, to get that sixth Lombardi (or, with a nod to football mensa, the first Jerry), and he will do everything in his power to get there.

This is a tad threatening to most of the other NFL owners, who are more likely to be staid, bottom-line-watching businessmen than title-hungry risk takers like Jerry. While he is not alone, he is the most successful at that brand building, which is why he owns what is considered to be the most valuable sports franchise in America (and given the recent sale of the Los Angeles Dodgers, it may have to be reevaluated as the top franchise in the world). They are afraid of him getting more power and influence than he already has - power and influence that may allow him and the other financially successful owners to change the rules on revenue sharing that force them to carry the weak sisters in the league.

That is the secret fear lurking in the league. There are a few franchises like Dallas and the Washington Redskins (the other team hit with cap penalties) that bring in huge revenues and drive television ratings, and then there are several small market teams that depend on the revenue sharing aspects of the NFL to stay afloat financially. And by "stay afloat", I mean make a profit for their owners.

The arguments get complicated and convoluted at this point. The low revenue teams would prefer to see the salary cap and floor kept low to avoid having to spend so much money that otherwise would be in each owner's bank account. The big market teams would rather be able to spend more freely to build a more successful team. The small markets fight to limit the spending of the other teams so they can have some hope of being competitive, which is their only hope for keeping the audience they currently have. But the big market teams are the cash cows that support everyone, and they get resentful of being held down in the name of competitive balance while having to foot everyone's' bills.

There is a third side in this whole issue, and that of course is the players, represented by the NFLPA. They want to see both the salary floor and cap go up. As the article I quoted above states, the NFLPA is telling its players that the good times are coming soon. But they have already started borrowing against the future to just keep the salary cap where it was last year, and that extra $7 million or so they got this year will be taken out in the future.

The new CBA was touted as guaranteeing labor peace for a decade. But the more I read from people like Kraft and McNair, who should be pretty knowledgeable on this stuff, the more I realize that the players are going to have to face the fact that their income is going to be held down for several years, and may never see the increases they were promised by the NFLPA.

In a way, this is looking like the owners have pretty much stuck it to the players. The article I quoted above references the deal the NFLPA walked away from before the lockout last year. Picking up right after the last quote:

The end result, per Kaplan, will be a total of $142.4 million per team in salary and benefits for each of the first three years of the new CBA, with modest annual increases thereafter.

Kaplan points out that, last March, the players walked away from a proposal that would have guaranteed $146 million per team in 2012, $150 million per team in 2013, and $161 million per team in 2014.

The players are now stuck with a deal that, at least in the short-term, is not going to see any real increases in player salaries. Given the brevity of most NFL careers, that means a lot of players are likely to feel like somebody has done them wrong. There is some indication that DeMaurice Smith, head of the NFLPA, may have gotten snookered. It will be interesting to see who the players blame if things don't work out so well for them.

Running through all this is an undercurrent of miserliness. It becomes harder to argue that the majority of team owners are not focused on keeping as much of the revenue stream for themselves and minimizing the amount they share with the players. They seem to see no relationship between the quality of play and the size of the payrolls. They want the game to be bigger, faster, and more exciting, while paying less and less of the total revenues to those bigger, faster, more exciting players. It has created the odd triangle of interests, where the NFLPA and owners like Jerry Jones and Dan Snyder should be working together. Jones and Snyder at least appear to realize that you have to pay for talent. The owners who took such umbrage at how Dallas and Washington behaved as if the term "uncapped year" meant something ridiculous and unimaginable like "a year with no salary cap" now look more and more as if they just want to use every maneuver to keep the payroll as low as they can. Everyone talks about the cap, but that salary floor is more of a concern to many than the cap, since it dictates the minimum they can get away with paying. Far too many teams worry more about staying as close to that floor as they can than having enough room under the ceiling to attract better players. I wonder if there is not going to be a long term problem over this as the reality of this all becomes apparent to those players.

Or maybe it's just me that gets a bad taste in my mouth the more I look at this. Perhaps I am identifying too much with my team, which is certainly getting the short end of the stick so far. But I just cannot shake the feeling that this is going to blow up, sooner or later, and it is most likely going to create more problems for the NFL than it has solved.


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