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Uncapped, but not Unlimited - Part II

As you saw in Part I of our primer, trying to circumvent the system in an uncapped year, in the event there's a cap in the future, really has some limitations. Here are some other frequently asked questions we've received on the subject:

What about one-year deals? Could teams be more free-spending than in the past?
That would get back to the individual team's budget. Teams have been as cash-conscious as cap-conscious. This collective bargaining agreement (CBA) is the first that actually required a minimum cash spending in addition to a minimum and maximum cap spending because there was a concern by the union that any big increase in the cap wouldn't result in a big increase in cash spending because teams could not afford to spend it. In an uncapped year, you still have the cash budgets of every club. Except for those few clubs that can pull money out of their pockets, most teams are on a cash budget as well. That's why the economy has as much to do with this as the rules.

The tenders are issued in February, but technically the uncapped year doesn't start until March. How does that work?There would be transitional rules put into place for players who were going to be RFAs [if uncapped]. Whether that's for one year where they would extend the number of franchise tags, where they'd get a much larger tender instead of the lower tender. No new CBA would simply flood the market with 200 more unrestricted free agents after clubs for a year and a half now have been planning on those players being restricted. Each time there's a new CBA there are transition rules put into place to deal with those kinds of things.

Are franchise players affected by the rules of the final eight or four?
No. Any team can make an offer sheet to a franchise player. Because there, you're giving up the draft choice compensation, so they exclude that from this process.

Will teams try to underpay with no minimum threshold to save on cash?
The only way you'd really be able to do that is by cutting players. If players are free agents the market really determines that player's salary. If you're a low-revenue team who needs to save money, the only way you're going to do it is, if you have a player with a high salary, you could try to get him to take a paycut. If he refuses, the team could simply cut him. Each player still has their own minimum salary, so there's only so low teams could go. There's no minimum team salary, but there is a minimum individual salary. The lowest a team could go, theoretically, would be 53 players making $320,000. Practice squad players can't make less than $5,200 a week.

How did they retroactively look at the cap back in 1993, and how will that prevent teams from spending big this year?
Back in 1993-94 when the salary cap came in place, the league's job was to value all contracts that existed and define a new salary cap. There were players who signed their contracts for 1994 back in 1989, like Barry Sanders. There were signing bonuses associated with those contracts back in 1989, and other guaranteed salaries that were done with no intent of having any salary cap ramifications in 1994. But a bonus given to a player from 1989-92, the league valued and prorated. Teams in 1994 had salary cap charges for signing bonuses for contracts they paid years earlier. If teams tried to frontload them, there was a 30-percent down rule (similar to the 50-percent down rule today) as a way to prevent frontloading in advance of the current CBA. The contracts that were there, they simply took whatever was in excess in 1993 and prorated it like a signing bonus. So teams had salary cap charges in 1994 that had no bearing on the 1994 season, but represented charges for prior decisions they made that they didn't even know about.

Would that have to be collectively bargained again?
Yes, that's what they did in 1993. Retroactively, take these contracts the teams had done under a different system and apply it to the new system.

Where's the line between preparing for a system you believe could be in place as owners and colluding against players to not pay them in what's supposed to be an uncapped year?
Thirty-two teams have a job to make their own team and figure out as best as they can what the next CBA will look like. But there haven't been enough serious negotiations between the parties to know what the next CBA will look like.

Has there been a memo from the league that has said, 'Do what you want this year, but remember, we're going to have a retroactive cap.' Would that be collusion?
Yes, that would be collusion and, at this point, nobody knows that would be the case even if they wanted to say that. The thing that teams take the most seriously is the anti-collusion policy. Nothing in the CBA has more onerous penalties than the collusion policy. Teams take it more seriously than tampering, salary cap violations ... anything else. It has the worst penalties.

What are those penalties?
If just 20 players can prove that there's collusion, the CBA is terminated and suddenly every player is absolutely free of every contract that was affected by the collusion. There's the triple damages and every quarterback can say he should be paid as the highest quarterback contract. Collusion gets to go into the civil damages, triple punitive damages. The anti-collusion policy affects RFAs, offer sheets, UFAs and the contract you can offer them, draft choice compensation, draft trades ... it covers everything.

Would roster bonuses be affected down the line retroactively for cap purposes?
In the past, that would be part of the 30-percent down rule. The term salary means anything of compensation given to a player. The paragraph V salary is one component of that. Others include workouts, roster bonuses, reporting bonuses, incentives ... everything is salary. So you're not going to get around the cap just by calling it something different.

Would it be possible to give a first-round pick the lowest tender, which would only require the corresponding round pick as compensation if he were signed?
A first-round pick is going to get a first-round tender. You can't tender him $1.1 million if he's a first-round player instead of the $2.6 million. The tender offer has to be 110 percent of his prior year's salary. You could give him the second-round tender and roll the dice, but it would make more sense to simply give him a little more money to protect yourself. You can't tender a high pick low and low pick high. What would happen is, if you did that you could only get a third-round pick for the fourth-rounder that you want to tender higher - one round higher than his spot. If a player is making more than the tenders -- like Braylon Edwards, who made $5 million in 2009 -- his lowest tender would be 110 percent of $5 million -- $5.5 million.

Will teams use the uncapped year as a get-out-of-jail free card?
The rules that were put in place the last time dealt with individual contract valuation. There weren't any club salary caps because signing bonuses weren't prevalent. They represented about 10 percent of compensation in 1993 and they're about 30 percent now. That would be the result of CBA negotiations. Each club ended 2009 with $8 million of cap room on average. There aren't the type of cap restrictions on player terminations from 2006-09 that there were in 2004-06 when the cap rose. Teams are going to focus on incremental cash payments for the players under their contracts compared to the value that the player is worth, which for the most part is what they've been doing forever. Instances of a team keeping a player solely for cap purposes are largely overblown, especially after 2006 when they implemented the post-June 1 designation rule. Rarely will a player cost more cash-wise than his acceleration would. In the example of Adalius Thomas, he has $5 million of new cap and he'd have $4.4 million of acceleration.

This content originally appeared in the February 2010 issue of *Patriots Football Weekly.*

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