With NFL free agency looming, teams are going to be looking to fill holes on their rosters. The Dallas Cowboys prefer to use free agent acquisitions to fill needs to allow them to focus more on finding the best players they can in the draft. In recent years, they have limited going after top-level, high-cost free agents to one or two a year. The remainder of their needs are addressed with players signed after the first rush of expensive contracts. But according to a persuasive article at ESPN, the price of all free agents is going to go up this year.
Here's the bottom line: Give or take, there will be $1 billion in salary-cap space available when the market opens on March 9. That's a massive and unprecedented number, enough to pay the rosters of six full teams and an amount that will gift market-blowing contracts to the second- and third-tier players typically available.
It all comes down to basic economics, something that so many, from the average person trying to make a living to people who are vying for high elective office, often seem so woefully unaware of.
Don't worry, this is not going to be a math-intensive explanation. It is really quite simple. NFL free agency is a very limited marketplace. There are simply not enough players with sufficient talent for all 32 teams to field an effective starting lineup, which accounts for 25 to 30 spots on the roster, counting specialists and role players like slot receivers and nickel corners. And teams still have over 20 other roster spots to fill. The demand is constant and the supply is also fairly constant from year to year. When you throw in more money for all teams to spend, that results in one thing: Inflation. The price for each free agent goes up.
How much? The site Over The Cap did a detailed analysis of the extra money available and the various other factors influencing salaries, such as mandatory increases in minimum salaries dictated by the CBA, and came up with this bottom line for what all agents should be seeking for their clients.
Teams have somewhere in the ballpark of 20% more dollars to spend on free agents. This should be the real rate of inflation sought by agents. If you represent a player whose comp list earns around $11 million per season you should be seeking around $13 million. If you have a $7 million player the real price this year should be $8.5 million per year.
Most of the talk of late has been about how much money there is to spend on free agents, but the unavoidable consequences of economics mean that the money will not go as far as the prices increase. And as OTC points out, the smart move for agents and the players they represent is to not sign early, but to wait and hit the open market to get as much money as they can.
It is one way the CBA has worked out for the players who make it to free agency. With the mandatory increases in the cap, that money gets spread around each year, and the players are reaping some benefits. The teams will want to lock up players as early as they can to avoid the inflationary pressures (right now, the deal the Cowboys worked out with Tyron Smith is looking absolutely brilliant for the team). But players should resist that, waiting as long as possible to get in on the growing salary cap pie.
For this year, it means that the first wave of free agent contracts will just continue to skyrocket as teams give in to the need to address their most glaring needs (in the case of the Cowboys, this has been exacerbated by the announced four game suspension of Randy Gregory, adding another concern for the pass rush.) It will also affect the second and third wave contracts that Dallas prefers to focus on, making all of them more costly. Considering that free agents are historically less likely to pay off on average than good draft picks, it just makes finding solutions for all the needs that the Cowboys have this year more complicated. And there is more bad news for Dallas. The author of the OTC article, Jason Fitzgerald, sees certain positions affected more than others by the inflationary pressure.
If I had to guess this year we'll see more jumps from safeties, pass rushers, and possibly cornerbacks and offensive tackles.
Three of those four are certainly positions of need for the Cowboys, especially pass rushers.
All teams will be in the same boat here. While Dallas will be able to trigger contract restructures and use other moves to have almost $50 million in cap space to use this year, that is not going to go as far as you might think. The likely outcome is that the team will have to target one or two key free agents and pay more than they would want for them, and then have to sift carefully through the players still available after the first wave or two of signings run their course to hopefully find serviceable players to fill out the roster before the draft.
It just puts more pressure on the personnel departments throughout the league. The Cowboys will have money to spend, but the price tags are going to be bigger, and they may have to settle for less than they would have liked, just like everyone else in the NFL.