An Update on the New Salary Cap

Things are starting to clear up based on a document that ESPN obtained, which can be viewed here. To try to keep everyone up to date on the salary cap here is what we know as of right now:

1. The Base Salary Cap will be $120,375,000 in 2011.  However this is not a firm figure.  A team may designate up to 3 million dollars in cap relief to veteran players, which are those with more than 5 years of service, who make more than $1 million in salary.  The way the mechanism seems to work is that you will be borrowing money from a future league year and applying it to 2011.  So if the Jets chose to reduce the cap charges for Calvin Pace, LaDainian Tomlinson, and Bryan Thomas they would have their cap adjusted by $3 million in a future league year, which I’m guessing in 2013.  This is also available in 2012, but the limit is $1.5 million. I’m also assuming that if you use this credit the player must remain on the roster for the full year.  So in all likelihood the Jets cap will be $123,375,000.

2. There is no performance based pay system in 2011, stating that it will be devoted to cap room.  I don’t have enough details to know what that means, but if I had to guess it means the pool of PBP will be allocated equally to every NFL team to offset a veterans salary.  This might be the rumored $3.5 million exemption some have talked about on Twitter.  If that is the case the adjusted cap can be as high as $126,875,000.

3. Roster bonuses will be due on the 2nd day of the NFL League Year.  This does not really apply to any Jets, as Sione Pouha is the only player with a larger roster bonus, but if they want to renegotiate those deals they will occur ASAP.

4. Option bonuses will also be due on the second day of the NFL League Year.  Though I can not imagine the Jets renegotiating a contract with Revis, that means the window closes on day 2, so its not going to happen.  This will also apply to Nick Mangold and D’Brickashaw Ferguson, but I don’t believe anyone ever suggesting reworking their deals.

5. The union wants the players to have an opportunity to earn their workout bonus money, which I assume the NFL will cave in on. All workout bonus money will count against the salary cap in 2011 provided the player arrives to camp.

6. There is a new rookie salary cap in place that works very similar to a model I created last year.  For the Jets first round draft pick this year he will receive a 5 year contract, in which the 5th year is an option year.  The agent will have to negotiate the contractual guarantee, but it seems as if the salary is slotted by draft spot and position. The team will be required to pick up the option in year 3 at which point it becomes guaranteed for injury.  The amount of that guarantee will be based on the average salary of players 3 thru 25 at the position. All the other draft choices will receive contracts essentially identical to what the Jets have given every year.  There is an open issue as to the value of the 4th year, which will be earned by seeing minimum levels of playing time, but the value, that of the right of first refusal tag, is what almost every NFL team used since the last CBA was signed.

7.  There looks to be harsh across the board forfeiture provisions for holding out of training camp. Early indications look to be 15% of their prorated bonus, up to 25% depending on the length of holdout.

8. This forfeiture also applies to the regular season, with 25% being given up in week 1 and 1/17th of the bonus thereafter.  This applies to option bonus money and all other paid offseason bonuses.  These clauses look to be put in to overrule prior court rulings that allowed players to keep option bonus money even when they failed to play for the team and forced a trade or release.

9. As earlier discussed by us at TJB, the cash salary guarantees were wildly overblown by the media.  On a leaguewide basis cash salary must total 99% of the cap the next two years.  That does not mean per team.  In other words, if the Jets spend 140 million in cash and the Bills spend 100 million the league is in compliance.  Starting in 2013, each team will have to spend 89% of the salary cap in cash, over a 4 year period.  That means that if a team is filled with dead money they don’t have to overspend in cash that year to reach the minimum.  They have 4 years to spend it, so if the salary cap was $120 million from 2013-2017 each team has to spend around $427 million to be in compliance with the CBA.



10. Still no details on dead money.  The Jets have $8.6 million or so in potential dead money on the books in 2011.

11.  The Franchise Tag does exist in the new CBA.  Details are not known, but the union is looking to limit the amount of times a player can be franchised to just one.

12. The salary cap will be computed based on certain percentages of the revenue streams.  55% of on the TV broadcast rights, 45% of things like the NFL Network, Red Zone, and Sunday Ticket, and 40% of local club revenue goes into the cap calculation.  The only money taken out of the cap seems to be a small credit for new stadiums.  The league guarantees 47% and no more than 48.5% of the total revenue to the players.  I would anticipate to maximize revenues the NFL will be pushing more and more programming into the NFL Network.  The lower local club revenue is probably a nod to the small market owner who hates the idea of the Cowboys making a killing at Jerryworld and seeing it cost them more money.