|CBA Nonsense: The League Strikes Back|
|By: Brian Filler|
|March 15, 2012|
In an unexpected move for NFL fans, the league recently announced that it will be removing cap space from the Dallas Cowboys and Washington Redskins. The Cowboys will lose $10 million in cap space and the Redskins will lose $36 million; the teams have the option to displace these fines over the next
two years in any way they choose. The fines come in response to "excessive" and "abusive" contract restructuring during the uncapped offseason two years ago. For those that have forgotten, in the year preceding the NFL lockout, the league went through an uncapped offseason where team salaries were unleashed from the typical floors and ceilings, under a collective bargaining agreement (CBA). This uncapped year came as a result of the owners' decision to opt out of the then current CBA, and inability to reach a new agreement before 2010. During this time frame the Cowboys restructured Miles Austin's contract and paid him $17 million so that the bonus would not be prorated across the life of the contract. The Redskins performed similar movies with Albert Haynesworth for $21 million and DeAngelo Hall for $15 million.
Restructuring contracts to convert base salary into bonuses is a common strategy used by teams to free up cap space for the immediate future. The move is a bit of a gamble as the conversion typically turns salary (due over the life of the season) into a bonus (due at the signing of the contract), making all the money guaranteed. What was different, and frankly smart by these two teams, was that they restructured the contract in an uncapped year. The Cowboys and Redskins wrote massive checks upfront and used the uncapped year to limit the cap hit in future years under these contracts.
So, if this a practice typically employed by teams, then why are the Cowboys and Redskins being punished? It is not entirely clear at this point, but it appears that the 28 other owners in the league agreed with commissioner Roger Goodell that teams should not create "crazy contracts" during the uncapped year. This was not a rule written anywhere in the CBA, it was simply a backroom agreement that some, but clearly not all of the teams wanted. Several parts of this punishment are upsetting and should scare fans going forward.
The Contracts -- While the league is now kicking and screaming about these contracts, they were all approved in 2010. All new contracts must be submitted to the league offices for approval, and none of these contracts were voided at that time. The question then becomes, if the league did not have a problem with these deals in 2010, why are they making a fuss now? The answer lies in the very root of this whole debate, because the teams did not violate any rules. In order for the league to void a contract, an agreed upon rule must be broken. Nothing the Redskins or Cowboys did in 2010 violated the rules in place and thus the contracts were approved.
The Timing -- The league waited until the eve of free agency to alert the media of their intentions to strip these teams of significant cap space. Both the Cowboys and Redskins released statements later that night claiming they had not received any communications from the league on this matter. So, not only did the NFL wait until the day before free agency to hand out these punishments, but they alerted the media before the teams. These are significant penalties that will affect both teams' offseason for the next two years and the league handled the communication portion very poorly. The Cowboys and Redskins already have strong cases to challenge these penalties, and the timing only further bolsters their arguments.
The Hypocrisy -- As part of the rationale for these punishments the league management council referenced maintaining competitive balance. Essentially, the league is saying that by overspending during the uncapped year, these two teams upset the relative level of competition that teams were going to be required to stay within (cap ceiling) once the new CBA was reached. The hypocrisy here is that many other teams met the league's definition of upsetting competitive balance and were not punished. Several teams, including Carolina, Tampa Bay and Jacksonville spent far below the anticipated salary cap floor during the uncapped year. While many enjoy discussing problems with skyrocketing salaries as a result of no cap ceiling, there is an equally important problem with teams spending far below traditional amounts without a cap floor. As an example, take a quick look at Major League Baseball; the Yankees spend over $200 million, which many argue is a problem, but the Pirates refuse to spend more than $50 million. MLB's refusal to set a cap floor has allowed the Pirates to spend minimal amounts every year, and effectively not compete in the league. The Panthers, Buccaneers and Jaguars did exactly this during the uncapped in an effort to save money -- and look at the results. The Panthers had the worst record in 2010, and all three teams are picking in the first nine picks of this year's draft. If the NFL was truly concerned about competitive balance it would have instructed teams to not overspend or underspend in the uncapped year, and punished all violators. This shows either that the league was not actually concerned with competitive balance, or was not intelligent enough to foresee teams dumping contracts in the uncapped year. In either scenario, the league is refusing to punish all teams equally and this should scare fans going forward; your team could be next.
The NFLPA -- As part of this punishment, the money being stripped from the Cowboys and Redskins will be redistributed to 28 other teams (Raiders and Saints were excluded for similar infractions). The other 28 teams will receive a $1.6 million bump in their salary cap space over the next two years, and this is why the NFLPA has not come out in defense of the Redskins and Cowboys. The NFL was prepared to set the salary cap at just over $118 million for this year, must lower than the NFLPA wanted. In order to achieve the salary cap number for this year (just over $120 million) the NFLPA agreed to sign off on these punishments, effectively throwing two teams under the bus. Now, I understand the economics of the decision; a two million dollar increase in cap space per team equates to more overall money for players, than two teams losing $46 million over the next two years. However, it is fundamentally wrong for the NFLPA to collude with the NFL to the detriment of teams. The NFLPA represents players and used this deal to benefit the players as an aggregate but did so to the detriment of two teams and potentially some individual players. This is a dangerous precedent to set as the NFLPA colludes with the NFL and harms some of its constituents for the benefit of others.
All in All -- The collusion by 28 owners to punish the Cowboys and Redskins for not actually violating a rule is upsetting. Even more upsetting is the unequal application of this punishment and the NFLPA acting as an accomplice. Finally, the NFL waited until the night before free agency began, to hand down this punishment, completely hamstringing these teams for the offseason. I hope these teams choose to fight these fines and bring some order back to the NFL system of justice.