With news that the NFL Players Association and the league have begun talks on a new Collective Bargaining Agreement, it's important to note that while the current CBA does not end for another two seasons, there will be no salary cap in 2010 under the current deal. There will still be football in 2010, but next off-season could look mighty different. Here's what you need to know about the changes to the structure with a little help from SI.com's Peter King:
• A 30% increase rule restricts salary increases from 2009 to 2010. For example: a player with a $1,000,000 Salary in 2009 would be limited to annual salary increases of $300,000 per year beginning in 2010. Teams and players have not been allowed to sign contracts that exceeded the 30% rule past the current off-season.
• In capped seasons (2008 and 2009), a player whose contract has expired becomes an unrestricted free agent if he has four or more accrued seasons. In the uncapped year (2010), a player whose contract has expired becomes an unrestricted free agent only if he has six or more accrued seasons. What happens for those two other years, then? In the first, you are an Exclusive Right Free Agent and the team only has to offer you the veteran minimum and you can't sign with another team. The second year, you will be a Restricted Free Agent and the team can tender you at a specific rate. If another team exceeds it, the current team has a right to match any offer. Let's look at an example near and dear to our hearts - Trent Edwards. Trent has two years left on his rookie deal, paying $460K and $550K. Right now, Trent is set to become an unrestricted free agent after the 2010 season. If the league goes to an uncapped system, Trent's big payday for hitting UFA status doesn't occur following 2010, because he will only have four accrued NFL seasons. In 2011 he is a ERFA for Buffalo and they can offer him the veteran minimum - just like they did with Fred Jackson this year - and he is required to stay with the Bills. The year after that, he would be a restricted free agent and the Bills could tender him a contract offer, like they did with Keith Ellisonthis year. If another team signs Edwards to an offer, they are required to compensate Buffalo based on a few factors - the level of the tender and Edwards' draft status - and Buffalo still has the right to match that offer and keep Edwards. Edwards wouldn't necessarily hit true UFA status until he was 29 years old - instead of 27 - and even then, he could be tagged as a Franchise or Transition player and remain on the team indefinitely. Which brings me to...
• In capped years (2008 and 2009), a club may designate a Franchise Player or a Transition Player. In the uncapped year (2010), a club may designate one additional Transition Player. A Transition Player must be offered a minimum of the average of the Top 10 salaries of the prior season at the player’s position or 120 percent of the player’s previous year’s salary, whichever is greater. A Transition Player designation gives the club a first-refusal right to match an offer sheet given a player by another club within seven days. If the club matches, it retains the player. If it does not match, it receives no compensation.
• During the uncapped year, the eight clubs that make the divisional playoffs in the previous season have additional restrictions that limit their ability to sign Unrestricted Free Agents from other clubs. The limit is determined by the number of their own free agents signing with other clubs. For the four clubs that lose in the Divisional playoffs, they may only have the ability to sign the same number of free agents that they lose to other clubs. The other early language, which has not been finalized, says that in order to sign a player to a five year, $20M contract in free agency, a team that made the Divisional playoffs would have to lose a total of $20M worth of free agents.
• Last thing about an uncapped year. With the salary cap, there also exists a salary floor or an amount teams are required to spend. In 2009, that number is $111M. The salary cap and floor are designed to keep teams on even levels and create more competitive games. With the elimination of the salary cap, the salary floor goes away as well. Teams could conceivably cut their entire squad and sign 53 guys (or less) for the veteran minimum resulting in less than $50M in player expenses. This would keep the bottom line down, though I doubt it would generate much money. Teams are not spending to the salary cap right now, and with the elimination of the floor, some teams might spend even less. As of May 11, only five teams were within $5M of the salary cap (and they'll spend their remaining money up to the cap on their rookies). Seven teams had over $20M to spend.
Several people have said they see the uncapped year as a huge opportunity for the Daniel Snyders of the world to spend, spend, spend and become the Yankees of the NFL. What people don't realize is that while some great, great players will get huge contracts, the lower-tier players will be making less because of the lack of roster mobility. Those players are the majority in the union and should step up now to prevent the uncapped year from happening. The ten owners who will be using a lot of money to sign players will be more than offset by the 22 owners who will cut player spending. As Mike Florio wisely pointed out last week:
With no salary cap, there will be no salary floor. And with far more teams currently well below the 2009 salary cap, what’s more likely to happen next year: (1) a spending spree that drives multiple franchises toward bankruptcy; or (2) a reeling in of player expenses as the teams gird for a work stoppage in 2011?