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The Cap - Seems it's a small market vs. big market thing


Solid84
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So I stumbled on this just now - almost a week after it's release - from the Pat Mcafee Show.

 

We've been talking about managing the cap here from time to time and here's a look at and explanation of how the Rams (and other big markets) are doing their thing.

 

https://twitter.com/PatMcAfeeShow/status/1534591994218938370?s=20&t=uZa5hDT5qPCDYZHlc4McPA

 

There's a longer version here from YouTube:

https://www.youtube.com/watch?v=Gqb1bTSIfHs&ab_channel=ThePatMcAfeeShow

 

Now I'm not big on this cap thing, so I will choose not to comment on it. Instead I hope some of the guys on here who have a better grasp on it will leave a comment.

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It's definitely real but it breaks down to teams that have more cash on hand/richer owners have an advantage on leveraging bigger signing bonuses that average out the cap hit of a player over time. The thing is though, this only really works for players you're confident will play out most of their contract. If they leave before that, all that leftover avg can hit the cap across a year or two. At least that's the way I understood it from all the recent media. I feel like they really didn't get into the "voidable years" nonsense that you're seeing quite a bit these days as well. 

 

This segment on Pat's show broken down by Albert was great though. Pat's been going on since last year how the cap seems fake, which echo's a lot of fan's perspective to when viewing the creation of some of these super teams (e.g. Rams). After that segment aired, all the other networks had their "experts" doing a very similar bit. Funny how far Pat's come, ahead of the curve a bit there. 

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21 minutes ago, TaylorTheStudMuffin said:

I was watching a podcast last night they had a good explanation on cash vs cap.  The deeper pocket owners are willing to dish out more cash in guarantees.


Not sure what deep pockets have to do with it, as much as the willingness to take a gamble.

 

Haslam and Irsay have similar net worth and the Cleveland and Indy markets are also about the same.  
 

But the Browns were willing to take a big risk with maybe the largest guaranteed contract ever.  

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1 hour ago, Superman said:

It's not about big market vs small market. Denver isn't really a big market, their new owner is flush with cash. New Orleans isn't a big market, they've gone cash over cap pretty often. The Niners are a big market, they have typically not gone cash over cap very often. Teams with more restricted cash flow situations cannot fully embrace a cash over cap strategy, especially not for multiple seasons.

 

Teams that use this cash over cap strategy are borrowing cap money from future seasons, which reduces what they have to spend in future seasons. They're comfortable doing this because a) they know the cap goes up every year, and b) they don't expect to have to trade/release their star players. But when they do have to get rid of a highly paid player, like the Rams with Goff last season, the bill comes due.  

 

And guess what? The 'cap isn't real' poster child Rams had a cash figure of $192m in 2021, compared with the strict cap manager Colts, who had a cash figure of $223m. The Lions had a higher cash figure ($198m) than the Rams in 2021. The Rams were limited in cap space as a result of dead money for Goff, Gurley, and other players that they had previously given signing bonuses to, but were no longer on their roster. (It was also the one year in recent history when the salary cap didn't go up.) In other words, the bill came due.

 

Pat McAfee heard what he wanted to hear, as I suspect most fans do. Fans who don't understand or pay attention to the salary cap have started to realize that there are different strategies and manipulations that can be used, and now 'the cap isn't real!' has become their rallying cry. Doesn't make it true.

I think the problem is knowing that the Rams have done nothing but extend/spend/sign/restructure/trade and take on new salaries while still being able to blow through all this money. So it makes you wonder how are they doing this when realistically they are WAY over the salary cap, yet the common talk is Indy only has $10 mil or so to spend, yet they can’t do anything. In my eyes, it just annoys most people when that is said, but we watch other teams (mostly the Rams) do it. 

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18 minutes ago, Smonroe said:


Not sure what deep pockets have to do with it, as much as the willingness to take a gamble.

 

Haslam and Irsay have similar net worth and the Cleveland and Indy markets are also about the same.  
 

But the Browns were willing to take a big risk with maybe the largest guaranteed contract ever.  

 

Net worth and cash are different considerations. Given Haslam's outside business interests, I'd think he's more liquid than Irsay.

 

Also, the Watson contract by itself doesn't speak to cash over cap. They backloaded the contract to shield Watson from loss due to impending suspension, not necessarily to manipulate their cap figure. They could have absorbed a more normal cap figure in 2022, especially if they decide to trade Mayfield. And the guarantee doesn't really speak to cash flow, either.

 

I do think it's more about willingness to take a gamble, because without serious mismanagement, it's hard to see how an NFL team would have significant cash flow issues. The Packers financials show that teams can handle going cash over cap every season, if not for non-cap related expenses (stadium, coaching expenses, legal payouts -- concussion settlement, Rams settlement coming up, etc.) 

 

4 minutes ago, Indyfan4life said:

I think the problem is knowing that the Rams have done nothing but extend/spend/sign/restructure/trade and take on new salaries while still being able to blow through all this money. So it makes you wonder how are they doing this when realistically they are WAY over the salary cap, yet the common talk is Indy only has $10 mil or so to spend, yet they can’t do anything. In my eyes, it just annoys most people when that is said, but we watch other teams (mostly the Rams) do it. 

 

People say this because they don't pay attention to the losses the Rams take.

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29 minutes ago, Smonroe said:


Not sure what deep pockets have to do with it, as much as the willingness to take a gamble.

 

Haslam and Irsay have similar net worth and the Cleveland and Indy markets are also about the same.  
 

But the Browns were willing to take a big risk with maybe the largest guaranteed contract ever.  

Pat Mcafee explained it in his podcast. Then the no  horsing around podcast had one last night that went over what Pat said. I would suggest listening to them.

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The NFL has revenue sharing, with only limited means for teams to earn more revenue than other teams.  A rich owner with lots of cash flow can't just give cash it to his team......it would be income, revenue to that team...and I don't think that "cash gifts from owners" is one of the allowable non-shared streams of revenue an NFL team can have.

 

Rules make an NFL team pretty much a self sufficient endeavor.  How rich the owner is doesn't really matter.

 

The Rams are in a win now attitude.  Of course, their goal is to always be in a win now attitude as they churn the roster. 

 

It works if their big earners play the correct positions and actually make enough impacts to earn their high compensation throughout the terms of the entire contracts.

 

Its probably easier to judge that ability by dealing with proven players over expensive first round rookies...with more immediate results too.

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It's an owner thing.  Always has been and always will be.  What the Rams are doing now is the same thing the 9ers did in the 80s. 

 

Doing that requires an owner with deep pockets who can pay out bonuses at a high rate every year.  Because every time you see these restructures there's a payout to the player taking it and that stuff adds up quickly.  One look at this offseason for the Rams, for example, shows $293M in cash spending, which is top in the league.  The bottom team, the Bears, spent $147M in cash.

 

There are owners who can do this every year.  We just don't have one of them.  

 

https://overthecap.com/cash-spending/

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1 hour ago, Boondoggle said:

It's an owner thing.  Always has been and always will be.  What the Rams are doing now is the same thing the 9ers did in the 80s. 

 

Doing that requires an owner with deep pockets who can pay out bonuses at a high rate every year.  Because every time you see these restructures there's a payout to the player taking it and that stuff adds up quickly.  One look at this offseason for the Rams, for example, shows $293M in cash spending, which is top in the league.  The bottom team, the Bears, spent $147M in cash.

 

There are owners who can do this every year.  We just don't have one of them.  

 

https://overthecap.com/cash-spending/

 

1 hour ago, Boondoggle said:

Think in fact Pat McAfee recently observed that the cap is for owners who can't afford to circumvent it.  Paraphrasing of course.  But he was absolutely correct.

No.  The 49ers DeBartelo ownership funded the 49ers with outside business cash flow, They dominated the era, and that's why the salary cap was then created.... to specifically to stop rich-er owners from having an advantage.  Any money that is part of cash expenses is accounted for according to salary cap rules.  There is no under the table compensation, unless there is criminal fraud (per NFL rules) going on.

 

Pat has always had a victimhood lens to his views, where the little guy is somehow perpetually being oppressed.  The mindset goes all the way back to swimming in the canal and being a football "rebel" as an early 20 something.  Its one of his blatantly obvious personality traits that makes his show boring, because an astute person will know what Pat's opinion is before Pat even forms it himself.

 

The Rams do what they do because they are apparently spending their salary cap better than most teams.

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29 minutes ago, DougDew said:

No.  The 49ers DeBartelo ownership funded the 49ers with outside business cash flow, They dominated the era, and that's why the salary cap was then created.... to specifically to stop rich-er owners from having an advantage.  Any money that is part of cash expenses is accounted for according to salary cap rules.  There is no under the table compensation, unless there is criminal fraud (per NFL rules) going on.

 

Pat has always had a victimhood lens to his views, where the little guy is somehow perpetually being oppressed.  The mindset goes all the way back to swimming in the canal and being a football "rebel" as an early 20 something.  Its one of his blatantly obvious personality traits that makes his show boring, because an astute person will know what Pat's opinion is before Pat even forms it himself.

 

The Rams do what they do because they are apparently spending their salary cap better than most teams.

I'll admit the 9ers were a bad example.

 

But again circumvention of the cap requires payouts.  Which requires cash.  Which requires an owner with deep pockets who can pony up the bucks.  The Rams are undoubtedly good at managing the cap, as they have been doing this for many years now.  But the fact remains their owner is the engine behind it.

 

Disagree all you want but some owners will never be able to do what they do.  Even with a top cap team.

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3 hours ago, DougDew said:

The NFL has revenue sharing, with only limited means for teams to earn more revenue than other teams.  A rich owner with lots of cash flow can't just give cash it to his team......it would be income, revenue to that team...and I don't think that "cash gifts from owners" is one of the allowable non-shared streams of revenue an NFL team can have.

 

Rules make an NFL team pretty much a self sufficient endeavor.  How rich the owner is doesn't really matter.

 

Cash flow definitely matters. If a team has an owner who has significant surplus cash and is willing to spend it now, the team can structure contracts in a way that allows them to spend cash over cap in the current year. And that surplus cash does not have to come from NFL related revenue, but it does count against the cap. A team using this strategy will be effectively borrowing cap space from future seasons, so there is a limit to how much they can spend over the cap in a current year, and over a period of multiple years, so today's spending affects tomorrow's budget.

 

If a team's owner does not have significant surplus cash, or is not willing to spend it now, this strategy is not as viable an option. 

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8 hours ago, stitches said:

I kind of wonder if a cap system similar to the NBA will be good for the NFL, except for the luxury tax provision. 

 

I meant to ask your opinion on this earlier and forgot. What good would come of the NFL having a cap system more like the NBA?

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Additionally why the owner’s cash flow matters outside of large bonuses/paying up front for cap savings is that on guaranteed dollars as part of a contract, that guarantees amount has to be put in escrow up front.  With Watson’s monster deal of 230 million guaranteed, Browns owner had to put 230 million in escrow right now.  That’s a tremendous amount of money that not every owner could do in conjunction with the other guarantees or bonuses they may have to do.

 

For example, Mark Davis’ net worth is 500 million.  Meaning, he’d have to come up with liquid cash for almost half his worth for just a deshaun contract.   He wouldn’t be able to do that without a rule change on the escrow for guaranteed money.   Spanos I think is at a billion, and again, likely doesn’t have the liquid funds to do that.  Wonder what Herbert is going to want eyeing that Watson deal…

 

I could see putting a cap in cash over cap, and would support it, BUT too late now to make happen.  All the recent new owners have been absolutely loaded

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5 hours ago, Nate! said:

Additionally why the owner’s cash flow matters outside of large bonuses/paying up front for cap savings is that on guaranteed dollars as part of a contract, that guarantees amount has to be put in escrow up front.  With Watson’s monster deal of 230 million guaranteed, Browns owner had to put 230 million in escrow right now.  That’s a tremendous amount of money that not every owner could do in conjunction with the other guarantees or bonuses they may have to do.

 

For example, Mark Davis’ net worth is 500 million.  Meaning, he’d have to come up with liquid cash for almost half his worth for just a deshaun contract.   He wouldn’t be able to do that without a rule change on the escrow for guaranteed money.   Spanos I think is at a billion, and again, likely doesn’t have the liquid funds to do that.  Wonder what Herbert is going to want eyeing that Watson deal…

 

I could see putting a cap in cash over cap, and would support it, BUT too late now to make happen.  All the recent new owners have been absolutely loaded

 

This rule was changed within the last few years. Not sure the particulars but guarantees don't need to be fully funded upfront anymore. 

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3 hours ago, Superman said:

 

This rule was changed within the last few years. Not sure the particulars but guarantees don't need to be fully funded upfront anymore. 


https://www.cbssports.com/nfl/news/nfl-insider-notes-deshaun-watsons-game-changing-deal-and-its-ramifications-hottest-topic-at-owners-meetings/

 

“Per current league rules, all future fully guaranteed money due in a player contract must be placed in escrow at the time the deal is consummated.”

 

articl May be wrong but from earlier this year

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11 hours ago, Superman said:

 

I meant to ask your opinion on this earlier and forgot. What good would come of the NFL having a cap system more like the NBA?

Less opportunity for teams to sell the future for the present and more even playing field. Right now, if your really want to compete at the highest level you almost must do what all those teams that are moving current money into the future are doing, otherwise you are operating from a clearcut short-term competitive disadvantage(In essence those teams are operating at lets say 300M dollar cap and you are operating at 200M, only their extra 100M will have to be paid 3 years from now). And while the offending teams would sooner or later have to pay the price, this doesn't change your picture as a fiscally responsible team, because at any one time there will be different teams doing it and you will always be at a disadvantage. Reality is - the NFL is forcing teams to choose a window, pour all resources in that window and then suffer for a few years recovering from those choices. Otherwise you are fighting with one hand tied behind your back against stacked opponents. Just drop all this nonsense - no void years, no bonuses and any other mechanism that allows teams to push huge money toward the future, etc. 

 

On the player side - more certainty and better security if you significantly limit those non-guaranteed money and force teams to pay players almost everything guaranteed. 

 

On the fan-side - more clarity about what is being paid for every player and what is guaranteed and what is not, less hold outs and anxiety about a player wanting more money. There is practically ZERO holdouts in the NBA about money. There have been some VERY RARE holdouts about players wanting to be traded, but I cannot think of one about money. 

 

I'm not quite sure if there should be a maximum limit on salaries. You can probably forego that one. But I do think there should be a limit on salary rises and/or drops. For example, you shouldn't be able to give a player 4M one year and then go 15-20 next year. Ease in the raise... in the NBA the raises/drops on the money of a contract are about 8% per year for own players and about 5% for outside FAs. Again - it introduces much more stability and less opportunity for teams to push money toward the future, IMO. 

 

My idea would be - get salary cap -  teams cannot go over it to sign outside FAs. Get a hard cap number that is higher than the salary cap and allow teams to go up to that number to re-sign their own players. This way you encourage teams developing their own players. 

 

Not sure about keeping the franchise tag. Probably good idea to keep it. 

 

I don't know... just throwing things out there... for consideration. Would like to hear your opinion. 

 

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5 hours ago, Nate! said:


https://www.cbssports.com/nfl/news/nfl-insider-notes-deshaun-watsons-game-changing-deal-and-its-ramifications-hottest-topic-at-owners-meetings/

 

“Per current league rules, all future fully guaranteed money due in a player contract must be placed in escrow at the time the deal is consummated.”

 

articl May be wrong but from earlier this year

 

Just checked, the CBA, I was wrong. The rule was changed, but not as dramatically as I thought. The team has to escrow all deferred and guaranteed funds, minus $15m.

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3 hours ago, stitches said:

[clipped]

 

Long and short, I don't agree. 

 

This would require at least two new restrictions on player compensation: 1) a yearly cash spending cap on teams; and 2) a limit on scheduled pay increases. On top of that, you're proposing keeping the franchise tag. So it's probably a non-starter from a union standpoint.

 

In exchange, you legislate greater player guarantees. I think fully guaranteed NBA contracts do more harm than good, and I think that problem would be exacerbated in the NFL. It would make it harder for teams to rework their rosters, and relatively greater parity in the NFL is a major bonus over the NBA. 

 

I just think we're overstating the magnitude of this problem. First of all, this is not a new phenomenon. The Colts were using prorated signing bonus and salary conversion restructures all the back in the Polian era -- this is what they did with Manning's contract several times (and other players) to create cap space to re-sign their own players to new contracts. So when we made Bob Sanders the highest paid safety in the league, or Dwight Freeney the highest paid DE in the league, that was only possible because of prorated signing bonuses and these other mechanisms that allow teams to strategize their spending/cap allocation. Teams have used this strategy for a long time now.

 

Second, historically, there is not a major divide in cash spending between big market/free spending teams, and the more conservative/restrictive spending teams. Let's take the period from 2011 to 2020 -- covers the last CBA, includes the spending floor, and it's before the new CBA or Covid had an impact on team spending. The total salary cap for those ten years was $1.527B. (All these numbers are from Spotrac.)

  1. Cowboys spent approximately $1.542B in cash on player contracts from 2011-20, for a total of $14.8M cash over cap. They averaged $1.48M over cap. In that period, they spent yearly cash over cap 7 times.
  2. Chargers spent approximately $1.535B in cash on player contracts, for a total of $8.5M cash over cap, an average of $0.85M over cap. In that period, they spent year cash over cap 4 times. However, in those ten years, they outspent the Cowboys 7 times.
  3. Patriots, for balance, a team that constantly contended and went to five SBs in this period. They spent $1.481B in cash, coming in $46.1M under the cumulative cap for those ten years (most of that was in 2020, when they did a hard reset after Brady left; their cash spending was $39.5M under the 2020 cap). They spent cash over cap 5 times.

So for a decade, the big market, big spending Cowboys outspent the small market, frugal Chargers by a total of $6.3m. (And even when the Chargers moved in 2017, they had increased debts to pay -- a $645M relocation fee, amortized, and a $200M stadium loan. So they didn't suddenly become a cash monster. The Spanos family is still pretty tight.) 

 

In a smaller sample, from 2020-22, the Rams have spent $701.7M in cash, with $294.1M of that in 2022 alone. The Colts have spent $661.4M, and that's before Nelson's extension. So that's a difference of only $40.3M between the conservative cap strategy Colts, and the wild spending Rams, and that gap will shrink once Nelson's deal is done. (This illustrates another point: the Colts don't use these cap mechanisms as aggressively, but they do spend cash over cap. It's not necessarily a cash flow issue, it's a cap management strategy. No question the Rams have a cash flow advantage, but it hasn't really shown up in cash spending until this season.)

 

 

You also mention fans. I think awareness has increased recently, but understanding hasn't kept up. People know these different strategies exist and are more readily aware of them, but they don't understand them well, or how they impact the NFL. And ultimately, what fans care most about is whether teams win games and contend for titles. The NFL's cap flexibility is a major factor here. Teams can extend their windows, they can build around good QBs, and bad teams can reset without having to live under the burden of a bad contract for a prolonged period of time. The NFL can put the sub .500 Colts and Niners on Sunday Night Football, and draw a disappointing 11.8 million viewers, which rivals the NBA Finals Game 2 on Sunday night (11.9 million). The first round of the NFL draft outdraws the NBA Finals. I'm an NBA fan, not a hater, but greater parity is a major influence here, so adopting NBA cap rules that limit parity doesn't make sense to me.

 

Those are just some of my thoughts. Sorry this went on so long...

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2 hours ago, Superman said:

 

Long and short, I don't agree. 

 

This would require at least two new restrictions on player compensation: 1) a yearly cash spending cap on teams; and 2) a limit on scheduled pay increases. On top of that, you're proposing keeping the franchise tag. So it's probably a non-starter from a union standpoint.

I don't see a problem with this. I want to hear good argument that is not "it's been done for ages so it should continue to be done this way". On the franchise tag... I'm not steadfast on it and I would consider that a fine point that can be tweaked - my idea was more - a way for a team to keep a player they really love. One way is - allowing higher pay by the home team. Another way is franchise tag. I think the details and the exact mechanism can be finnessed. 

 

2 hours ago, Superman said:

 

In exchange, you legislate greater player guarantees. I think fully guaranteed NBA contracts do more harm than good, and I think that problem would be exacerbated in the NFL. It would make it harder for teams to rework their rosters, and relatively greater parity in the NFL is a major bonus over the NBA. 

I disagree. Guaranteed contracts take care of the players. The only difference between 5 year fully guaranteed 100M contract and a 5 years 100M, 50M guaranteed contract in today NFL is that the player is protected for the full sum of that money. I can't see that as anything but good for the players. BTW I wouldn't mind implementing player options on the last year too, which don't exist right now. This is another player-friendly ammendment that can happen. 

 

 

2 hours ago, Superman said:

I just think we're overstating the magnitude of this problem. First of all, this is not a new phenomenon. The Colts were using prorated signing bonus and salary conversion restructures all the back in the Polian era -- this is what they did with Manning's contract several times (and other players) to create cap space to re-sign their own players to new contracts. So when we made Bob Sanders the highest paid safety in the league, or Dwight Freeney the highest paid DE in the league, that was only possible because of prorated signing bonuses and these other mechanisms that allow teams to strategize their spending/cap allocation. Teams have used this strategy for a long time now.

 

Again... I don't believe "it's always been like this" as a good argument for keeping something the way it is if there are better alternatives. The question is- is the alternative better? Of course I'm not 100% sure it's better, but I like exploring it... so thanks for entertaining it with me. 

 

2 hours ago, Superman said:

Second, historically, there is not a major divide in cash spending between big market/free spending teams, and the more conservative/restrictive spending teams. Let's take the period from 2011 to 2020 -- covers the last CBA, includes the spending floor, and it's before the new CBA or Covid had an impact on team spending. The total salary cap for those ten years was $1.527B. (All these numbers are from Spotrac.)

  1. Cowboys spent approximately $1.542B in cash on player contracts from 2011-20, for a total of $14.8M cash over cap. They averaged $1.48M over cap. In that period, they spent yearly cash over cap 7 times.
  2. Chargers spent approximately $1.535B in cash on player contracts, for a total of $8.5M cash over cap, an average of $0.85M over cap. In that period, they spent year cash over cap 4 times. However, in those ten years, they outspent the Cowboys 7 times.
  3. Patriots, for balance, a team that constantly contended and went to five SBs in this period. They spent $1.481B in cash, coming in $46.1M under the cumulative cap for those ten years (most of that was in 2020, when they did a hard reset after Brady left; their cash spending was $39.5M under the 2020 cap). They spent cash over cap 5 times.

So for a decade, the big market, big spending Cowboys outspent the small market, frugal Chargers by a total of $6.3m. (And even when the Chargers moved in 2017, they had increased debts to pay -- a $645M relocation fee, amortized, and a $200M stadium loan. So they didn't suddenly become a cash monster. The Spanos family is still pretty tight.) 

There is no other way over the long term - over the long term things equalize because there is salary cap and sooner or later even the short-term big spenders have to come down to the pack. It just means they will spend heavy for a few years... and then they will drop down, because they will have to cover for their early spendings in the books. My point is - the current system incentivizes short-term spending sprees followed by few years of recovery and if you don't spend heavy at any given moment you have no chance to compete against the big time short-term spenders at that particular time. The problem is that there will ALWAYS be short-term spenders.. .they won't always be the same... they will rotate, but you will always be competing against 2-3 teams that have sold their future for the present. 

 

2 hours ago, Superman said:

In a smaller sample, from 2020-22, the Rams have spent $701.7M in cash, with $294.1M of that in 2022 alone. The Colts have spent $661.4M, and that's before Nelson's extension. So that's a difference of only $40.3M between the conservative cap strategy Colts, and the wild spending Rams, and that gap will shrink once Nelson's deal is done. (This illustrates another point: the Colts don't use these cap mechanisms as aggressively, but they do spend cash over cap. It's not necessarily a cash flow issue, it's a cap management strategy. No question the Rams have a cash flow advantage, but it hasn't really shown up in cash spending until this season.)

Keep in mind that that period includes periods when we were paying massive money for QBs(sometimes 2-3-4 of them) - Luck was still on the books in the beginning, Rivers and Brissett were still on the books at the same time. We gave up huge salary to Buckner, etc. It's not like Ballard has not spent. But yes... look at those 294M ... that's what I mean when I said above you are competing against teams that are spending 300M in given year while you are spending much less trying to stick to some normal cap management structure(you are saying just 40M like this is normal - it's not... that's 2 players at a record setting contracts at any non-QB position, this is a big competitive advantage), even if you are still using that cash over cap mechanism. And again.. .the longer the period the more it will equalize, because sooner or later the chickens come home to roost. 

 

2 hours ago, Superman said:

 

You also mention fans. I think awareness has increased recently, but understanding hasn't kept up. People know these different strategies exist and are more readily aware of them, but they don't understand them well, or how they impact the NFL. And ultimately, what fans care most about is whether teams win games and contend for titles. The NFL's cap flexibility is a major factor here. Teams can extend their windows, they can build around good QBs, and bad teams can reset without having to live under the burden of a bad contract for a prolonged period of time. The NFL can put the sub .500 Colts and Niners on Sunday Night Football, and draw a disappointing 11.8 million viewers, which rivals the NBA Finals Game 2 on Sunday night (11.9 million). The first round of the NFL draft outdraws the NBA Finals. I'm an NBA fan, not a hater, but greater parity is a major influence here, so adopting NBA cap rules that limit parity doesn't make sense to me.

 

Those are just some of my thoughts. Sorry this went on so long...

I'm not contesting NFL's product... they are definitely selling much better than the NBA. I just don't believe the salary cap structure is the reason for that appeal. 

 

BTW I disagree NBA cap rules limit parity. It's the nature of the sport that limits parity(5 players, superstars being MUCH more influential towards the success of a team, etc.) and the NBA has actually trended towards more parity lately. If Boston wins that would be 5 different champions in the last 5 years with 8 different finalists in those 5 years. 

 

But you have some good points about flexibility and teams having a way out of a bad contract, as well as about extending windows. I'm just not sure those are good things. 

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The NFL has the best salary cap rules out of any professional sports league.

 

NBA and MLB are complete big market vs small market with soft cap or no cap at all. I believe it is a huge reason the NFL is so popular. Every team has a chance to be competitive and it is a fair level playing field for the most part.


I think these NFL teams are just figuring out ways to use the hard cap to their advantages, like others have said. It’s not really big vs small market, it’s just other taking advantage of the current rules. Heck Florida teams have multiple advantages for just being in Florida, no property tax and the weather.

 

As long as the NFL keeps the hard cap it will continue to be the most level playing field out of any professional sport. As it should be.

 

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21 minutes ago, Bravo said:

The NFL has the best salary cap rules out of any professional sports league.

 

NBA and MLB are complete big market vs small market with soft cap or no cap at all. I believe it is a huge reason the NFL is so popular. Every team has a chance to be competitive and it is a fair level playing field for the most part.


I think these NFL teams are just figuring out ways to use the hard cap to their advantages, like others have said. It’s not really big vs small market, it’s just other taking advantage of the current rules. Heck Florida teams have multiple advantages for just being in Florida, no property tax and the weather.

 

As long as the NFL keeps the hard cap it will continue to be the most level playing field out of any professional sport. As it should be.

 

This is because of soft cap and luxury tax which only the rich ones can afford to pay over the long-term. This is the thing I like the least about NBA's salary cap. In my NBA-inspired "idea", there would be no luxury tax and there will be a hard cap over the salary cap. And the main purpose of it will be to reward teams with home-grown talent... but again... with some limits. 

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47 minutes ago, stitches said:

I don't see a problem with this. I want to hear good argument that is not "it's been done for ages so it should continue to be done this way".

 

My pushback is that you're offering a solution to something that you perceive to be a problem, and I'm still trying to understand where the problem is. These would be significant changes to the cap rules. My response is not 'it's always been this way,' my response is 'there's not really a problem here.' 

 

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On the franchise tag... I'm not steadfast on it and I would consider that a fine point that can be tweaked - my idea was more - a way for a team to keep a player they really love. One way is - allowing higher pay by the home team. Another way is franchise tag. I think the details and the exact mechanism can be finnessed. 

 

The tag is a minor point. The bigger point is that you're proposing two major restrictions on player compensation, which means the union would not support those changes. Getting rid of the tag might be a carrot to dangle, but I doubt that it offsets the other restrictions. In my mind, it does not, because the tag affects such a small percentage of players -- which is why the union never tries to get rid of it. 

 

Also, these restrictions would limit a teams' ability to re-sign their best players before they hit FA -- less creative contract structures, less flexibility to use your cap space, more FA defections -- so coupling that with an NFL version of Bird rights which allow the home team to offer more money would effectively reduce player compensation also. 

 

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I disagree. Guaranteed contracts take care of the players. The only difference between 5 year fully guaranteed 100M contract and a 5 years 100M, 50M guaranteed contract in today NFL is that the player is protected for the full sum of that money. I can't see that as anything but good for the players. BTW I wouldn't mind implementing player options on the last year too, which don't exist right now. This is another player-friendly amendment that can happen. 

 

Guaranteed contracts result in players who can't/don't perform at a level commensurate with their play continuing to be overpaid. It funnels money away from players who are performing at a higher level, and it restricts a team's ability to overcome a bad contract. I could give any number of examples of bad NBA contracts negatively affecting teams for several years, and compare them with bad NFL contracts that the team is able to recover from more quickly. We probably aren't going to see this the same way, but I stand by my assertion that fully guaranteed contracts -- especially by rule/precedent, as opposed to being negotiated, as they can be now -- are bad for the NBA, and would be worse for the NFL.

 

The bolded is something else that's a matter for individual contract negotiation. There's nothing in the CBA or league rules that prevents players from negotiating player options, and in fact, some players do have negotiated options. Just like a fully guaranteed long term contract, if a player wants an opt out, he needs leverage and a backbone. Not rules changes.

 

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Again... I don't believe "it's always been like this" as a good argument for keeping something the way it is if there are better alternatives. The question is- is the alternative better? Of course I'm not 100% sure it's better, but I like exploring it... so thanks for entertaining it with me. 

 

Thanks to you also. This is obviously nothing but an intellectual exercise, but it's one of the things I nerd out over, so I'm here for it.

 

I just think the alternatives being presented are addressing a problem that doesn't really exist. There's no obvious inequality in cash spending in the NFL. There is a perception of inequality that I believe would be cleared up if you really examined the details over an appropriate period of time. Instead, that mistaken (IMO) perception is perpetuated every time the Rams sign a new contract, because people who don't understand these details respond with 'the cap isn't real!' and fans eat it up because it must be the only explanation for why their team isn't winning. In reality, the reason your team isn't winning is probably because your coach/GM sucks, your QB isn't good enough, or a combination of the two. Not because the Rams are outspending your team.

 

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There is no other way over the long term - over the long term things equalize because there is salary cap and sooner or later even the short-term big spenders have to come down to the pack. It just means they will spend heavy for a few years... and then they will drop down, because they will have to cover for their early spendings in the books. My point is - the current system incentivizes short-term spending sprees followed by few years of recovery and if you don't spend heavy at any given moment you have no chance to compete against the big time short-term spenders at that particular time. The problem is that there will ALWAYS be short-term spenders.. .they won't always be the same... they will rotate, but you will always be competing against 2-3 teams that have sold their future for the present. 

 

Keep in mind that that period includes periods when we were paying massive money for QBs(sometimes 2-3-4 of them) - Luck was still on the books in the beginning, Rivers and Brissett were still on the books at the same time. We gave up huge salary to Buckner, etc. It's not like Ballard has not spent. But yes... look at those 294M ... that's what I mean when I said above you are competing against teams that are spending 300M in given year while you are spending much less trying to stick to some normal cap management structure(you are saying just 40M like this is normal - it's not... that's 2 players at a record setting contracts at any non-QB position, this is a big competitive advantage), even if you are still using that cash over cap mechanism. And again.. .the longer the period the more it will equalize, because sooner or later the chickens come home to roost. 

 

To the bolded, that's the point of the salary cap and the spending floor. It's the reason the NBA and MLB have luxury tax, and oppressive repeater tax, which, unlike the NFL spending floor, doesn't benefit the players at all. It just gets redistributed to lower spending teams, but they don't have to pay that money to the players. In effect, big spending teams subsidize cheap owners, and NBA players don't benefit from it at all. 

 

I agree that the rules allow teams to go on short term binges, with the understanding that they will eventually have to take some losses. The problem is no one pays attention to those losses. The Rams just had a down spending year -- $192.4M cash in 2021, compared to the Colts $222.6M. That's right, we outspent the Rams in cash by $30m last season. You talk about the Colts paying QBs? The Rams had a greater percentage of their 2021 cap allocated to Jared Goff than Colts had to ALL their QBs in 2021, and Goff played for the Lions last year. (Also, the Rams lost several contributing players this offseason, and they're already projected $30M over the 2023 cap, with several contributing players set to be FAs.)

 

The Patriots went to the SB in 2018. In 2019, they were $14M cash over cap. In 2020, they were $39.5M cash under cap, because they had to absorb $31M in dead money. These are examples of the losses that no one talks about. 

 

The teams that don't employ these short term strategies -- like the Colts -- make that choice primarily due to their own philosophy, not because they are unable to do so. If the Colts wanted to pry open their window and go for it, they could. They don't, not because of cash flow -- again, the Colts spend plenty of cash each year -- but because they want to protect the future.

 

So if it equalizes, what's the problem? The main difference between teams that are successful and those that aren't isn't what they spend, it's who they spend on. 

 

That's why I used the Cowboys, Chargers, and Patriots as an example. Three teams with very different reputations, financial situations, and levels of contention. Yet their spending was very similar, and the team that actually had meaningful success is the one that spent the least. And that's over a decade.

 

Then the Rams vs Colts, in a more recent but smaller sample, which coincides with the time period when people are suggesting the Colts have a cash flow problem and/or are too frugal, while the Rams are supposedly spending like a drunken sailor and won a SB. And the difference, for now, is $40M? Where's the inequality?

 

The biggest difference between teams that win and teams that lose is management/coaching, and QB play. Not cash spending, and not cap management strategy.

 

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I'm not contesting NFL's product... they are definitely selling much better than the NBA. I just don't believe the salary cap structure is the reason for that appeal. 

 

BTW I disagree NBA cap rules limit parity. It's the nature of the sport that limits parity(5 players, superstars being MUCH more influential towards the success of a team, etc.) and the NBA has actually trended towards more parity lately. If Boston wins that would be 5 different champions in the last 5 years with 8 different finalists in those 5 years. 

 

 

Parity isn't just about who wins the title. It's about how more than 50% of the NBA makes the playoffs each season, but there are teams that are perpetually unable to make the playoffs. They have zero chance of competing in the FA market. They have to sign their second tier guys to fully guaranteed max contracts, with an extra year and a 10% Bird premium. And then that second tier guy becomes a third tier guy, and they can't trade him without including other assets, and the cycle continues. Lack of parity also shows up in how few of the playoff teams can even make the conference championship.

 

But that's also a side point. I do think NBA salary cap rules make it harder for bad teams to improve, and some of those reasons are expressed above.

 

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But you have some good points about flexibility and teams having a way out of a bad contract, as well as about extending windows. I'm just not sure those are good things. 

 

What's not good about flexibility and extending contention windows? In what way is that a bad thing for the NFL?

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14 minutes ago, Superman said:

 

My pushback is that you're offering a solution to something that you perceive to be a problem, and I'm still trying to understand where the problem is. These would be significant changes to the cap rules. My response is not 'it's always been this way,' my response is 'there's not really a problem here.' 

 

My biggest problem with it is that you cannot be a team that is concerned with long-term health of your team if you want to win in the short term because at any given point you will be fighting against teams that are spending tons more. 

14 minutes ago, Superman said:

 

The tag is a minor point. The bigger point is that you're proposing two major restrictions on player compensation, which means the union would not support those changes. Getting rid of the tag might be a carrot to dangle, but I doubt that it offsets the other restrictions. In my mind, it does not, because the tag affects such a small percentage of players -- which is why the union never tries to get rid of it. 

 

Also, these restrictions would limit a teams' ability to re-sign their best players before they hit FA -- less creative contract structures, less flexibility to use your cap space, more FA defections -- so coupling that with an NFL version of Bird rights which allow the home team to offer more money would effectively reduce player compensation also. 

 

I just fundamentally disagree that those are restrictions on player salary. The teams would still have a hard cap they won't be able to go over. And it will be the same hard cap as a normalized long-term cap in today's league. The difference would just be how you get to that cap. The players(as a collective) will receive the exact same amounts of money. 

 

14 minutes ago, Superman said:

 

Guaranteed contracts result in players who can't/don't perform at a level commensurate with their play continuing to be overpaid. It funnels money away from players who are performing at a higher level, and it restricts a team's ability to overcome a bad contract. I could give any number of examples of bad NBA contracts negatively affecting teams for several years, and compare them with bad NFL contracts that the team is able to recover from more quickly. We probably aren't going to see this the same way, but I stand by my assertion that fully guaranteed contracts -- especially by rule/precedent, as opposed to being negotiated, as they can be now -- are bad for the NBA, and would be worse for the NFL.

This is another thing I fundamentally disagree with - I don't think mistakes should be easy to get away from. In the NBA there used to be amnesty provision. Maybe I'd be good with each team having an amnesty option for 1 player over lets say ... 4 years span. But no more. Because right now it's much more prevalent. Teams just get get out of jail free card for almost any contract they give. It rewards bad decisions by teams and punishes good decisions(like... well... lets say the Kenny Moore contract -  the Colts gave him lucrative contract before the league caught up to how good he is, but now that their decision has proven good long-term decision, they cannot even benefit from it because the player is sitting out and wants more money). I want teams that consistently make good decisions to be rewarded for it, and teams that consistently make poor decisions to not be spared the consequences of their own actions. 

 

14 minutes ago, Superman said:

The bolded is something else that's a matter for individual contract negotiation. There's nothing in the CBA or league rules that prevents players from negotiating player options, and in fact, some players do have negotiated options. Just like a fully guaranteed long term contract, if a player wants an opt out, he needs leverage and a backbone. Not rules changes.

I didn't know that. Good to know. :thmup: I think more players should push for it. Especially QBs. 

 

14 minutes ago, Superman said:

 

Thanks to you also. This is obviously nothing but an intellectual exercise, but it's one of the things I nerd out over, so I'm here for it.

 

I just think the alternatives being presented are addressing a problem that doesn't really exist. There's no obvious inequality in cash spending in the NFL. There is a perception of inequality that I believe would be cleared up if you really examined the details over an appropriate period of time. Instead, that mistaken (IMO) perception is perpetuated every time the Rams sign a new contract, because people who don't understand these details respond with 'the cap isn't real!' and fans eat it up because it must be the only explanation for why their team isn't winning. In reality, the reason your team isn't winning is probably because your coach/GM sucks, your QB isn't good enough, or a combination of the two. Not because the Rams are outspending your team.

 

Again, inequality in long-term spending is not my concern with the NFL cap. It's the CBA forcing teams to go on spending sprees in order to compete or be left in the dust because a few teams at any point will be able to outspend you by 15-20%(2-3-4 record setting contracts in a single season difference). BTW hitting on rookie contract QB is one of the ways to actually circumvent or at least alleviate this, but you need a lot of luck there. 

 

14 minutes ago, Superman said:

To the bolded, that's the point of the salary cap and the spending floor. It's the reason the NBA and MLB have luxury tax, and oppressive repeater tax, which, unlike the NFL spending floor, doesn't benefit the players at all. It just gets redistributed to lower spending teams, but they don't have to pay that money to the players. In effect, big spending teams subsidize cheap owners, and NBA players don't benefit from it at all. 

NBA has spending floor too. But yeah, overall I agree about the luxury tax and it's one of my least favorite things in the NBA. 

 

14 minutes ago, Superman said:

 

I agree that the rules allow teams to go on short term binges, with the understanding that they will eventually have to take some losses. The problem is no one pays attention to those losses. The Rams just had a down spending year -- $192.4M cash in 2021, compared to the Colts $222.6M. That's right, we outspent the Rams in cash by $30m last season. You talk about the Colts paying QBs? The Rams had a greater percentage of their 2021 cap allocated to Jared Goff than Colts had to ALL their QBs in 2021, and Goff played for the Lions last year. (Also, the Rams lost several contributing players this offseason, and they're already projected $30M over the 2023 cap, with several contributing players set to be FAs.)

 

The Patriots went to the SB in 2018. In 2019, they were $14M cash over cap. In 2020, they were $39.5M cash under cap, because they had to absorb $31M in dead money. These are examples of the losses that no one talks about. 

 

The teams that don't employ these short term strategies -- like the Colts -- make that choice primarily due to their own philosophy, not because they are unable to do so. If the Colts wanted to pry open their window and go for it, they could. They don't, not because of cash flow -- again, the Colts spend plenty of cash each year -- but because they want to protect the future.

 

My contention is that teams that don't make that choice will always be at a disadvantage competitively relative to the choices they are making. It doesn't mean a "conservative" team can never compete and even win - it just means they would need a hell of a lot more things to go their way to do it, simply because they are using much more limited resources. IMO the extreme versions of this are just starting to percolate throughout the league and this will be becoming more and more clear to see going forward. 

 

 

14 minutes ago, Superman said:

 

So if it equalizes, what's the problem? The main difference between teams that are successful and those that aren't isn't what they spend, it's who they spend on. 

 

That's why I used the Cowboys, Chargers, and Patriots as an example. Three teams with very different reputations, financial situations, and levels of contention. Yet their spending was very similar, and the team that actually had meaningful success is the one that spent the least. And that's over a decade.

Again - over a long term, the differences will be very small. My concern is not with the long-term balance of money spent. The equality here is by design, there is no other possible way for things to be and this is NOT surprising or objectionable to me. My concern is that this CBA forces teams to build unsustanably and pick a window if they want to compete at any given point.  

 

14 minutes ago, Superman said:

Then the Rams vs Colts, in a more recent but smaller sample, which coincides with the time period when people are suggesting the Colts have a cash flow problem and/or are too frugal, while the Rams are supposedly spending like a drunken sailor and won a SB. And the difference, for now, is $40M? Where's the inequality?

 

The biggest difference between teams that win and teams that lose is management/coaching, and QB play. Not cash spending, and not cap management strategy.

 

Parity isn't just about who wins the title. It's about how more than 50% of the NBA makes the playoffs each season, but there are teams that are perpetually unable to make the playoffs. They have zero chance of competing in the FA market. They have to sign their second tier guys to fully guaranteed max contracts, with an extra year and a 10% Bird premium. And then that second tier guy becomes a third tier guy, and they can't trade him without including other assets, and the cycle continues. Lack of parity also shows up in how few of the playoff teams can even make the conference championship.

 

But that's also a side point. I do think NBA salary cap rules make it harder for bad teams to improve, and some of those reasons are expressed above.

 

What's not good about flexibility and extending contention windows? In what way is that a bad thing for the NFL?

To me parity is not the be all, and neither is flexibility. I value good decisions being rewarded more than the ability of NFL teams to get away from bad decisions. The best way to minimize the effect of bad decisions should be to not make them in the first place, not to have a provision in the CBA that just erases them for you. In certain ways I don't mind that the NBA has less parity. For example, the NBA didn't care that both the Lakers and the Knicks were horrible for close to a decade. Their poor management put them where they belonged. Just like it's been putting the Kings or Minnessota where they belong and it didn't care that the Knicks or Lakers are the biggest markets in the league and the Wolves are one of the smallest. I do NOT mind that. If you consistently make % decision, you don't deserve easy passes. You want to get out of the bottom - get better GMs, make better decisions! 

 

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22 minutes ago, stitches said:

My biggest problem with it is that you cannot be a team that is concerned with long-term health of your team if you want to win in the short term because at any given point you will be fighting against teams that are spending tons more. 

 

I think this is an exaggeration. The Bengals are in good shape now, and in the future, and can prepare to re-sign Burrow whenever they're ready. Their window is linked to how good the QB is. Just one example. 

 

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I just fundamentally disagree that those are restrictions on player salary. The teams would still have a hard cap they won't be able to go over. And it will be the same hard cap as a normalized long-term cap in today's league. The difference would just be how you get to that cap. The players(as a collective) will receive the exact same amounts of money. 

 

Yeah, fundamental disagreement. The NFL has no maximum limit on salaries, nor does it have a maximum amount salaries can increase from year to year. These changes represent restrictions on player salary, and are very close to max contracts like the NBA. (Another problem, second tier players making the same money as true foundational stars, which means teams with foundational stars are limited to only Bird rights as a way of keeping their star players. OKC possibly keeps Durant if they have more flexibility in what they can pay him.)

 

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This is another thing I fundamentally disagree with - I don't think mistakes should be easy to get away from. In the NBA there used to be amnesty provision. Maybe I'd be good with each team having an amnesty option for 1 player over lets say ... 4 years span. But no more. Because right now it's much more prevalent. Teams just get get out of jail free card for almost any contract they give. It rewards bad decisions by teams and punishes good decisions(like... well... lets say the Kenny Moore contract -  the Colts gave him lucrative contract before the league caught up to how good he is, but now that their decision has proven good long-term decision, they cannot even benefit from it because the player is sitting out and wants more money). I want teams that consistently make good decisions to be rewarded for it, and teams that consistently make poor decisions to not be spared the consequences of their own actions. 

 

What's better for the game? Team makes a mistake on a five year contract, has to struggle to rebuild around that contract for five years, or give up other assets to get out of the contract. Or team makes a mistake on a five year contract, and moves on after two years, either with a restructure, trade or release? This is not a get out of jail free card. It's just a lighter sentence.

 

And the Colts have benefited from the KM contract already, and probably will in 2022, because KM has no leverage. Teams that consistently make good decisions are rewarded with success.

 

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I didn't know that. Good to know.  I think more players should push for it. Especially QBs. 

 

We're in a world where QBs can do whatever they want. RW, Rodgers, etc., are getting reworked deals and more money every offseason. They probably don't need opt outs, but good QBs have the leverage. Watson shows that for sure. Other players should test that leverage if it's important to them. Or they can sign shorter, guaranteed contracts.

 

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Again, inequality in long-term spending is not my concern with the NFL cap. It's the CBA forcing teams to go on spending sprees in order to compete or be left in the dust because a few teams at any point will be able to outspend you by 15-20%(2-3-4 record setting contracts in a single season difference). BTW hitting on rookie contract QB is one of the ways to actually circumvent or at least alleviate this, but you need a lot of luck there. 

 

I addressed this earlier. Teams don't have to go on spending sprees to compete. They can if they want, but disciplined teams are having success as well. I would give the Colts an A for this offseason if they had signed a good WR. That wouldn't have qualified as a spending spree.

 

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My contention is that teams that don't make that choice will always be at a disadvantage competitively relative to the choices they are making. It doesn't mean a "conservative" team can never compete and even win - it just means they would need a hell of a lot more things to go their way to do it, simply because they are using much more limited resources. IMO the extreme versions of this are just starting to percolate throughout the league and this will be becoming more and more clear to see going forward. 

 

I don't agree that they're using fewer resources. They're using the same resources -- cash, and cap -- just using them in a different way. And they're doing so by choice, so why does it need to be legislated? We've talked about this before, teams will take turns going in for 2-3 year stretches, and then have to restructure for a year or two. And teams like the Colts will stay level, because that's their philosophy. I don't think this is a competitive problem. 

 

And we're talking about a lot of stuff, but I think this ^^^ is the fundamental disagreement on this matter. The salary cap exists to promote competitive balance, not to prevent teams from using different cap management strategies. We disagree on whether the current rules create a competitive problem.

 

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Again - over a long term, the differences will be very small. My concern is not with the long-term balance of money spent. The equality here is by design, there is no other possible way for things to be and this is NOT surprising or objectionable to me. My concern is that this CBA forces teams to build unsustanably and pick a window if they want to compete at any given point. 

 

Similar point made earlier. I disagree. Teams do not have to build unsustainably and pick a window to compete, and there are many examples of that, as recently as the Bengals in 2021.

 

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To me parity is not the be all, and neither is flexibility. I value good decisions being rewarded more than the ability of NFL teams to get away from bad decisions. The best way to minimize the effect of bad decisions should be to not make them in the first place, not to have a provision in the CBA that just erases them for you. In certain ways I don't mind that the NBA has less parity. For example, the NBA didn't care that both the Lakers and the Knicks were horrible for close to a decade. Their poor management put them where they belonged. Just like it's been putting the Kings or Minnessota where they belong and it didn't care that the Knicks or Lakers are the biggest markets in the league and the Wolves are one of the smallest. I do NOT mind that. If you consistently make % decision, you don't deserve easy passes. You want to get out of the bottom - get better GMs, make better decisions! 

 

I don't think parity should be forced at all costs either, nor does either league try to do so. I think good decisions should be rewarded. I don't think it's necessary for bad decisions to confine a team to the basement for years and years. I don't think the CBA erases bad decisions, but they don't have to be incredibly punitive either.

 

The Lakers are a good example. They paid Luol Deng and Timofey Mosgov, and got stuck with those contracts. They had to include a good young player in a trade to get rid of the Mosgov contract. They had to stretch Deng. I don't care that the Lakers had to struggle through these decisions; they're the premier team in the league, and have a built in advantage over other teams already. They could clear out those contracts with the knowledge that they could sign premier free agents in the blink of an eye. If it's a team that no FA ever wants to go to, what can they do?

 

And the Lakers fired their front office the next season, so the next front office has to pay for the sins of the previous front office for three more years? There are ways to work around this, but ultimately this isn't good for competitive balance, especially for small market teams.

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13 minutes ago, Superman said:

 

I think this is an exaggeration. The Bengals are in good shape now, and in the future, and can prepare to re-sign Burrow whenever they're ready. Their window is linked to how good the QB is. Just one example. 

 

Yeah... I guess that's the biggest disagreement here. I think the Bengals are the exception to the rule. If you get a top 5-7 QB in the league on a rookie deal... yeah... I guess you can compete without selling the future. But I admitted to this in my previous post too - QBs continue to be the biggest competitive advantage in the league. But I do think with the success of teams like the Bucs, the Rams, etc that sell the future for the present we will continue to see more and more teams come to that conclusion and this will become more and more prevalent as a team building and contention strategy. 

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On 6/14/2022 at 5:13 PM, Superman said:

 

Cash flow definitely matters. If a team has an owner who has significant surplus cash and is willing to spend it now, the team can structure contracts in a way that allows them to spend cash over cap in the current year. And that surplus cash does not have to come from NFL related revenue, but it does count against the cap. A team using this strategy will be effectively borrowing cap space from future seasons, so there is a limit to how much they can spend over the cap in a current year, and over a period of multiple years, so today's spending affects tomorrow's budget.

 

If a team's owner does not have significant surplus cash, or is not willing to spend it now, this strategy is not as viable an option. 

But the owner can't just give cash to his team....it becomes a source of revenue for the team...and has to eventually be accounted for against the cap if that cash flows to a player.  I can't say that I know the specific rules, but its my understanding that things like parking revenue, concessions, and team merchandise are revenues the team can keep...which then goes into the owners pockets.  Big market teams make the owner richer.  Rich owners do not make a team richer.   The Cap prevents excess revenue (in the form of cash in this case) an owner may have to flow into the team.. 

 

Sure, a rich owner can allow the team to keep as much cash as it can, ( and I doubt that Irsay needs more cash to live on than another owner), but we all know that cash is a front loaded transaction, and the up front payments to players have to impact the salary cap calculations and eventually have to be accounted for, accumulating at the back end if its in the form of signing bonuses, etc. 

 

I think LAR just does a better job of getting its moneys worth from the cap.  These big short term contracts provide a lot of space when they roll off to then sign another big name FA.  I suppose the cash goes to salary and not bonus, making it a current expense rather than needing amortized over a term and thereby accruing a cap hit in later years.  Then the player retires and frees up a bunch of space because his salary is off the books the next year.

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2 hours ago, DougDew said:

But the owner can't just give cash to his team....it becomes a source of revenue for the team...and has to eventually be accounted for against the cap if that cash flows to a player.  I can't say that I know the specific rules, but its my understanding that things like parking revenue, concessions, and team merchandise are revenues the team can keep...which then goes into the owners pockets.  Big market teams make the owner richer.  Rich owners do not make a team richer.   The Cap prevents excess revenue (in the form of cash in this case) an owner may have to flow into the team.. 

 

Sure, a rich owner can allow the team to keep as much cash as it can, ( and I doubt that Irsay needs more cash to live on than another owner), but we all know that cash is a front loaded transaction, and the up front payments to players have to impact the salary cap calculations and eventually have to be accounted for, accumulating at the back end if its in the form of signing bonuses, etc. 

 

I think LAR just does a better job of getting its moneys worth from the cap.  These big short term contracts provide a lot of space when they roll off to then sign another big name FA.  I suppose the cash goes to salary and not bonus, making it a current expense rather than needing amortized over a term and thereby accruing a cap hit in later years.  Then the player retires and frees up a bunch of space because his salary is off the books the next year.

 

An owner CAN give cash to his team. If that cash goes to player salaries (in the presumably rare event that a team is cash flow negative), then it gets accounted for on the cap.

 

If that cash goes to staff salaries, facility repairs, technology, or anything else that's not player salaries but potentially helps the team -- like Kroenke spending $5B on SoFi, or the $800M practice facility the Panthers were going to build -- it's an example of an owner potentially funding a team related expense with his private wealth. Perhaps that money was accumulated from NFL related profits, but not necessarily, and there's no real way to know one way or the other. [Edit: It's not accounted for on the cap.]

 

And in situations like the 2022 Rams spending cash way over cap, it could be that the excess funds for player salaries -- like the $105M in signing bonuses for Stafford, Donald and Kupp, plus the guarantees that have to be escrowed (shout out @Nate!) -- are coming from the owner's private wealth. Even though it eventually hits the cap, Kroenke's strong cash flow position allows him to fund upfront bonuses where other owners might struggle. That money eventually hits that cap, and even if it puts the Rams cash flow in the red this season, it will balance out over time. But there are still real world cash flow considerations, and the more flexibility an owner has, the more options he can give his team. 

 

I do agree with the bolded, at least from high level perspective. They're spending a ton of money on really good/great players. That means they've acquired good/great players, and they're getting major production out of them. And the backloaded nature of their contract structures -- big bonuses, smaller cap hits in early years -- means the Rams have Stafford at 7% of their cap, while we have Ryan at 9% of our cap. So yeah, they can potentially get more out of their cap upfront by using this contract structure, but that will balance out in future seasons when Stafford's cap hits shoot way up.

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On 6/14/2022 at 12:30 PM, Superman said:

 

Net worth and cash are different considerations. Given Haslam's outside business interests, I'd think he's more liquid than Irsay.

 

Also, the Watson contract by itself doesn't speak to cash over cap. They backloaded the contract to shield Watson from loss due to impending suspension, not necessarily to manipulate their cap figure. They could have absorbed a more normal cap figure in 2022, especially if they decide to trade Mayfield. And the guarantee doesn't really speak to cash flow, either.

 

I do think it's more about willingness to take a gamble, because without serious mismanagement, it's hard to see how an NFL team would have significant cash flow issues. The Packers financials show that teams can handle going cash over cap every season, if not for non-cap related expenses (stadium, coaching expenses, legal payouts -- concussion settlement, Rams settlement coming up, etc.) 

 

 

People say this because they don't pay attention to the losses the Rams take.

I've made the "Irsay doesn't have the liquid assets equal to other owners" argument for years.....and every year, most people dis.iss it and say I'm ridiculous.   

 

Glad to see more people seeing it that way.

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4 minutes ago, Jackie Daytona said:

I've made the "Irsay doesn't have the liquid assets equal to other owners" argument for years.....and every year, most people dis.iss it and say I'm ridiculous.   

 

Glad to see more people seeing it that way.

 

The real question is whether Irsay's financial standing has a meaningful impact on team operations and contract structure. I don't see evidence that it does.

 

That doesn't mean Irsay has as much money as Jerry Jones or other big money owners.

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5 hours ago, Superman said:

 

An owner CAN give cash to his team. If that cash goes to player salaries (in the presumably rare event that a team is cash flow negative), then it gets accounted for on the cap.

 

If that cash goes to staff salaries, facility repairs, technology, or anything else that's not player salaries but potentially helps the team -- like Kroenke spending $5B on SoFi, or the $800M practice facility the Panthers were going to build -- it's an example of an owner potentially funding a team related expense with his private wealth. Perhaps that money was accumulated from NFL related profits, but not necessarily, and there's no real way to know one way or the other. [Edit: It's not accounted for on the cap.]

 

And in situations like the 2022 Rams spending cash way over cap, it could be that the excess funds for player salaries -- like the $105M in signing bonuses for Stafford, Donald and Kupp, plus the guarantees that have to be escrowed (shout out @Nate!) -- are coming from the owner's private wealth. Even though it eventually hits the cap, Kroenke's strong cash flow position allows him to fund upfront bonuses where other owners might struggle. That money eventually hits that cap, and even if it puts the Rams cash flow in the red this season, it will balance out over time. But there are still real world cash flow considerations, and the more flexibility an owner has, the more options he can give his team. 

 

I do agree with the bolded, at least from high level perspective. They're spending a ton of money on really good/great players. That means they've acquired good/great players, and they're getting major production out of them. And the backloaded nature of their contract structures -- big bonuses, smaller cap hits in early years -- means the Rams have Stafford at 7% of their cap, while we have Ryan at 9% of our cap. So yeah, they can potentially get more out of their cap upfront by using this contract structure, but that will balance out in future seasons when Stafford's cap hits shoot way up.

Ok, I can see where a rich owner can provide better facilities to make the environment better for players.

 

Not to mention that players themselves who have an eye for endorsements probably are attracted to big markets rather than small (but that's not related to how rich an owner is).

 

The cap is set up so that any compensation for/to players has to be accounted for within the rules, and we all know big picture wise that payments that are more upfront in cash gets pushed to later years given the Cap accounting.

 

Also, like we are all learning with the current inflation cycle, debt that you incurred 5 years ago actually is deflated as a percentage of current prices if inflation has been high during those 5 years.  IOW, LAR can be pushing cap hits to later years, but successfully forecasting that the cap will be going up significantly to where that lump of "debt" coming due will be a much smaller part of the total cap at that time than if the cap stayed flat.  That's also an aspect of successful cap management.

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37 minutes ago, DougDew said:

Ok, I can see where a rich owner can provide better facilities to make the environment better for players.

 

Not to mention that players themselves who have an eye for endorsements probably are attracted to big markets rather than small (but that's not related to how rich an owner is).

 

The cap is set up so that any compensation for/to players has to be accounted for within the rules, and we all know big picture wise that payments that are more upfront in cash gets pushed to later years given the Cap accounting.

 

Also, like we are all learning with the current inflation cycle, debt that you incurred 5 years ago actually is deflated as a percentage of current prices if inflation has been high during those 5 years.  IOW, LAR can be pushing cap hits to later years, but successfully forecasting that the cap will be going up significantly to where that lump of "debt" coming due will be a much smaller part of the total cap at that time than if the cap stayed flat.  That's also an aspect of successful cap management.


I don't personally think endorsements are a big factor. Brands are global, meetings are virtual, etc. PM led the league in endorsements from Indy 15 years ago. If you want to run a production company, maybe it's better to be in LA, but other than that, I don't see the difference. Maybe someone can point out other factors I'm not considering.

 

As for debt, backloaded contract structures are analogous. But in practice, those big signing bonuses are paid up front, and the guarantees have to be funded up front. So the relative cash standing of NFL owners can become relevant. One owner might not be able to part with a total of $400m in one offseason.

 

As it relates to the Colts, their cash spending has not lagged behind other teams. Their contract structures are still cash heavy, which I don't think people understand. Balanced contract structure is not a cheap alternative, because you have to make up for the lack of signing bonus with roster bonuses and higher salaries in the first two years, which the Colts do. In theory, it's possible that the Colts could be limited in spending, compared to other teams. I just don't think there's evidence of that so far. 

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