Collective Bargaining Agreement and the (potentially) Uncapped Year.

This post is originally found over at NinersNationSmileyman posted it there and I thought it was an excellent post so I am quoting him here.  Again none of this is my work, just reposting Smileyman's article as it is a good look at what the NFL faces next year if the Players and Owners don't extend the CBA.


Without further adieu...

As we all know the CBA expires this year and there has been no news of any kind of progress being made on a new one. This means that 2010 will likely be an uncapped year. This brings to mind visions of players getting huge bucks and owners going wild with their money. On the surface it seems like a good thing for the players and a bad one for the owners. However, the reverse might be more true.

Join me below the jump as we talk about what the CBA does and what an uncapped year means for free agency.



There are several things that need to be pointed out about the current CBA.

1. The current cap is 128 million (BTW the first salary cap was only 34 million)
2. There's also a minimum cap of 112.1 million.
3. Built into the salary cap are minimum wages for veterans
4. Right now players who are at the end of their contracts become unrestricted free agents after 4 accrued seasons.
5. If they have less than 4 accrued seasons they are restricted free agents.

There are also rules in place for length of contracts for players drafted in later rounds. 

The salary cap has some interesting things about it. Every contract that is offered to a player has to be approved by the NFL to make sure that it doesn't go over the salary cap. If it does the team has to renegotiate. There are some tools in place to help with the salary cap though. Any signing bonuses are spread out over the length of the contract. For example we signed Aubrayo Franklin to a 3 year deal worth $6 million. $3 million of that was a signing bonus so that's spread out over 3 years of his contract. His base salary this year is $1.1 million, so he basically counts $2.1 million against the cap for us. A team can also sign a four-year veteran to the minimum and only have half that count towards the salary cap.

Many fans don't realize that there is also a minimum salary cap. Owners can't be cheapskates and pay a pittance to their team in the hopes of maximizing profits. The minimum is set at just over 87% of the maximum, and the maximum is based on the overall revenue generated by the NFL.

Veteran minimum salaries are as follows:

0 years--$310,000
1 year--$385,000
2 years--$460,000
3 years--$535,000
4-6 years--$620,000
7-9 years--$745,000
10+ years--$845,000


Free Agency

There are two types of free agents. There's the Unrestricted Free Agent, and a Restricted Free Agent

An Unrestricted Free Agent is a player who has reached the end of his contract and has at least 4 seasons in the league. The player has to have been on the 53 man roster (or on IR or PUP) for at least 6 games in a season to have the season count for him. This is called an accrued season. 

A Restricted Free Agent is a player who has reached the end of his contract but does not have 4 accrued seasons. There are several levels of RFA, determined by the offer from the player's current team. 

Level 1--Right of First Refusal (RFR). If a team offers $1.01 million dollars they have seven days to match any proposal that the player receives. If they do the player stays with his current team. If they don't the player is free to sign elsewhere and his old team receives no compensation.

Level 2--RFR + Original Draft Choice. Team offers $1.01 million or 110% of the previous year's salary (whichever is greater). If he signs with another team the player's old team gets a 2nd round choice from the new team.

Level 3--RFR + First round. Team offers $2.198 million or 110% of previous salary (whichever is greater). If he signs with another team they are compensated a 1st round choice

Level 4--RFR & 1st plus 3rd. Team offers $2.792 million or 110% of salary (whichever is greater). If the player is signed by another team his old team gets a 1st round and a 3rd round draft pick as compensation.


Franchise Tags

Teams have another way that they can keep players, and these are through the use of tags. There are two (well three really), tags that a team can use. There's the franchise tag, and the transition tag.

A team can designate one of it's RFA's or UFA's as a franchise player. At that point they need to determine if the player is going to be an exclusive franchise player or non-exclusive. An exclusive franchise player can not sign with any other team. His salary is going to be the average of the five largest salaries at his position (as of the end of free agency for that year), or 120% of his previous year's salary (whichever is largest). A non-exclusive player receives an offer of the average of the five largest salaries for the previous year or 120% (whcihever is greater). If the non-exclusive player signs with a new team his previous team will be compensated with two 1st round selections.

A transition tag can be used instead of the franchise tag. The transition tag gives the player's old team Right of First Refusal. The offer is the average of the top 10 players at his position or 120%, whichever is greater. If he signs with another team his original team receives no compensation.


2010 and the CBA
If a new CBA is not reached by 2010, all of this changes. There will be no salary cap, meaning teams can try and buy themselves a championship (like the New York Yankees). On the flip side of it, there's no minimum cap either, so miserly owners can spend as little as they like on player salaries. Some big name players will receive huge payouts, but the vast majority of players will not because there will be no veteran minimum. The biggest change is to the rules of free agency. Currently it takes 4 years in the league to become an unrestricted free agent. With an uncapped year it takes six years of accrued service to be a UFA. Teams will have one franchise tag and two transition tags available to them.

Let's look at some examples to make sense of what this means.

Our favorite nose tackle Aubrayo Franklin is a FA at the end of this year. He was drafted in 2003, so this is his 7th season making him an UFA in both a capped and uncapped year. We signed him in 2007 for $6.15 million ($3 million signing bonus). His salary this year is $2 million. His salary will undoubtedly be higher than that because nose tackles are included amongst regular tackles for wage purposes so Hayneworth's huge contract will be nice for Aubrayo

Someone who won't be happy about an uncapped year is San Diego LT Marcus McNeill who will be left out in the cold. He was drafted in the 2nd round in 2006 (50th overall) and signed a 4 year contract (which included a $1.24 million signing bonus). His base salary this year is a paltry $585,000. As an RFA San Diego could offer him a contract worth $2.792 million and receive a 1st and a 3rd if another team decided to pick him up anyway. 


Will there be an uncapped year? Who knows. The NFLPA and the NFL have agreed to a media blackout so there isn't any real news coming out. A few months ago Goodell seemed positive that there would be an uncapped year, but there are some glimmers of hope. 

In my experience negotiations between unions and employers generally come down to the last hour. Last fall the union I'm a member of renegotiated it's contract with my employer. For several months there was bluster back and forth with hardly any progress being made on the new contract. At 3AM on the day we were going to walk out on strike they got the deal done. 

I kind of suspect that's what's going on now. There's been a media blackout which is something that generally happens when you're in discussions. It makes sense to both the players and the owners to get a job done. Profootballtalk has had some reports (rumors?) about progress in the negotiations. The league has sent a proposal to the NFLPA that includes a rookie wage scale. The NFLPA has also apparently formed several subcommitees to address various aspects of the proposal.

Because of the blackout news will be slow in coming, and anything that is released will be unreliable. 

Sports Business Daily has about all the information available on the current status of negotiations. If there's more out there I haven't been able to find it. 

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