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  • Important salary-cap negotiations loom for NFL, NFLPA

    Important salary-cap negotiations loom for NFL, NFLPA
    Tuesday, Jun 02, 2020 09:40 AM
    by Ian Rapoport , Mike Garafolo & Judy Battista

    When it comes to the 2020 NFL season, the focus has been on how to do it safely and on time, even amid the coronavirus pandemic. That remains paramount. However, there are financial issues many believe must be worked out before anyone can take the field, with or without fans.

    Multiple sources say the NFL and NFLPA both acknowledge that important negotiations are coming quickly to determine how to handle yearly salary caps for 2020 and beyond, considering there are likely to be steep revenue losses with limited or no fans in the stands. This sets up a scenario where both sides will have to come to agreements on every possible contingency on how COVID-19 could affect the season before anyone plays a game.

    While there is no deadline, the hope is to have agreements reached before training camps open, which is scheduled for late July. Theoretically, the NFLPA and NFL could talk throughout the preseason, but beginning the regular season without a deal is not considered feasible, sources say.

    Currently, the league and NFLPA are studying how the revenue could be affected and what the sure-fire losses will look like. That's one reason why there have been barely any contract extensions and few free agents have been signed after the initial free agency period.

    The goal is to make sure the salary cap goes up or at worst stays flat. But what if that's not possible?

    The NFL has had the luxury of waiting, biding its time and watching the other professional leagues, while MLB and its union in particular has engaged in acrimonious and sometimes tone-deaf talks for how to compensate players and what the season will look like. Those involved in football want to handle it now before it gets to that point.

    Here are the issues:

    The salary cap (currently $198.2 million for 2020) is calculated based on expected revenue, but there's also a mechanism where it rises or falls based on unexpectedly higher or lower revenue in the previous season. That will be the case this year in relation to the 2021 cap with fewer (or no) fans in the stands. How bad will the revenue losses be?

    The worst-case scenario is that every game is played in a completely empty stadium, leading to what sources have estimated as a $4 or $5 billion drop -- about a third of revenue. Under that scenario, teams could bring in $40 to $80 million less than expected. The losses are likely to be less than that, because it is expected that some fans will be able to attend games in some stadiums, although stadiums won't be packed. Still, if there are huge revenue losses, the 2021 cap will be impacted.

    But no one wants to see the cap drop because that has consequences for teams and players. And neither side wants a situation where the cap drops significantly in 2021 then rebounds with the new TV deals in 2022. It makes it extremely difficult for teams to conduct business or do extensions.

    Among the possibilities for how to smooth the cap out given expected losses is borrowing from future TV deals. New deals usually create a spike in the cap due to influx of cash, but in this case could be used to create a smooth incline and make up for losses incurred during the 2020 season. The league and the NFLPA could also agree to curtail or eliminate performance-based pay for a few years.

    But some have proposed looking at the present, instead of the future, for relief. And this will require cooperation between the NFL and NFLPA.

    The players' union would have to agree to give back some money this year, thus taking on some pain in the short term to offset more in the long term. With roster bonuses, workout bonuses, option bonuses and signing bonuses already paid in the spring, the trim would likely come from the players' base salaries, which are paid in weekly installments during the season. It's unclear at this point, with negotiations not even underway, how big of a cut the league would request and what kind of structure the players would accept for the giveback.

    Surely, the players would be reluctant to agree to such cuts. But teams would argue the alternative isn't ideal, either. In anticipation of revenue losses, teams could opt to part with veterans with big, non-guaranteed base salaries in 2020. Players such as the Browns' Olivier Vernon ($15.25 million), whose future in Cleveland has already been questioned by some, could find themselves in jeopardy of getting released.

    Plus, if the players agree to a trim now, it would save some jobs in 2021. The smaller the drop in next year's salary cap, the fewer number of veterans would be released then.

    The NFL declined comment for this story. The NFLPA declined comment for this story, as well, but sources informed of the union's thinking said the organization is aware of the potential for significant revenue loss this year and would be amenable to negotiating with the league to smooth out the salary cap as much as possible. And of course, they will surely have requests for what they would receive from the league in return for salary concessions.

    And then there is the other, major issue that looms -- what if the coronavirus cuts short the season after it started? While there is nothing firm and final, one could expect players to argue there is a strong legal argument to be made that once a single regular season game is played, teams would owe players their entire base salaries for the season, no matter how many games are ultimately played.

    In that scenario, if the season were cut short, teams would lose an overwhelming amount of revenue, but still be on the hook for full salaries for their rosters. That is not considered by teams as tenable.

    Agreements need to be reached on every possible contingency -- if the season starts and stops, what if they play with no fans, if they play half the season with fans, somewhere in between. What if there is a resurgence in the fall or an outbreak so serious that it forces some games to be cancelled?

    All issues must be resolved by an agreement between the NFL and NFLPA.

    The two sides came together on a new CBA earlier this season. The next looming set of negotiations may prove just as important.

Related Topics


  • Rambos
    Thank God we are under the cap.
    by Rambos
    By Len Pasquarelli

    Most fans couldn't care less about the collective bargaining agreement and, justifiable or not, view any discussions of negotiations aimed at extending labor peace through the 2013 season as just another example of the avaricious nature of already overpaid players.
    By Thursday, however, when the real-world ramifications of the failed labor talks become more apparent, fans in a lot of NFL precincts will take notice. With negotiations toward an extension having broken off Tuesday afternoon -- despite earlier optimistic reports that the sides were poised to strike an agreement -- salary cap managers from several franchises are readying themselves for what one general manager suggested late Tuesday will come to be known as "Bloody Thursday."
    Translation: Because so many teams are up against the projected cap limit of $95 million to $96 million for 2006, and the lack of a CBA extension means there are few options for relief, some big-name players will be jettisoned by Thursday, when teams must be in compliance with the spending limit.
    "In past years, you'd see a lot of guys released who maybe still had some name value, but who were really in decline in terms of production," said one AFC team executive who was working late Tuesday, trying to figure out how to pare down a prohibitively bloated cap figure. "This year? People are going to be stunned -- not just by the quantity of players who are cut by Thursday, but by the quality, too. It's going to be ugly. There's going to be blood in the streets and, compared to past years, it's going to be from some bluebloods, guys who can still play."
    For a few hours into Tuesday night, after word broke that NFL Players Association executive director Gene Upshaw had departed league offices in Manhattan and headed back to Washington -- after declaring the negotiations hopelessly deadlocked -- there was a sense that the union chief was undertaking one last bit of posturing. As the evening wore on, though, it became increasingly obvious that Upshaw and the league were not just practicing brinksmanship, and that the NFL could instead be poised on the brink of disaster.

    The word most often used by teams' staffers, the people charged with crunching the salary cap numbers, and who clearly had bought into the notion that a CBA extension would be struck: stunned.
    Said one cap manager: "For months, my owner told me to develop two strategies, one with [an extension] and one without. But nobody, even with all the gloom-and-doom talk of the last few weeks, ever really believed we'd be breaking out 'Plan B.' And then, these last few days, even my owner was telling me he thought it would get done. Unless there's some kind of miracle on Wednesday, our team is going to have to do some drastic things, and I know we're not the only team in that situation."
    How drastic? There...
    -03-01-2006, 07:35 AM
  • Fat Pang
    CBA and salary cap
    by Fat Pang
    What get's lost in this highly charged, emotional and (just whisper this bit.........) political debate about the future of the CBA and the salary cap that underpins it, is that everyone else around the world thinks it's a great idea.

    The debates about the intricacies, details, percentages and contractual niceities of the CBA and the cap obscure the essential point of it, which is to ensure the long term success of the NFL.

    I've watched and read various reports concerning the power plays between the NFLPA and the owners and between the various factions present within owners groups themselves and it all points to the very thiing that the CBA and cap are designed to circumvent.................GREED.

    It's obvious I know, but it really is remarkable the extent to which some people will go in order to sugarcoat an extremely bitter pill. Upshaw, Tagliabue,Benson and Jones (and our own extremely honest broker Shaw) can dress it how they like, but whether they dissimulate about 4% or the sharing of local revenue's it's all about the money.

    As if people aren't making enough already, as if there is a long line of players at the soup kitchens, owners driving around in Yugo's and agents cutting down the poplar trees in the drive to feed the fireplace as winter sets in.

    How much is enough? There's plenty enough for everyone already I'd suggest, so the current argument isn't about fairness or equality, because nothing works like that in our lauded and much worshipped free market, it's about power, resentment and greed.

    Compare Alexander and Bruce in their recent statements about their respective contracts.

    Alexander typifies the intellectual paucity ot today's NFL millionaires who plead that they only want "..what's fair for me and my family.." whilst demanding that their ego is sated by being paid at the top of their position and maybe even their profession and collecting enough money over a 7 year contract to fund healthcare in Sierra Leone for the next 20 years.

    Alas for envy.......

    The CBA and the cap has been such an outstanding success because it has manged to keep the lid on this pressure cooker of resentment, envy and greed. It's managed to ensure that for the last 10 years we've seen a full season of play.

    What's the alternative?

    The alternative can easily be seen in the EPL, Serie A or the Spanish Primera Liga. Here, full seasons of play are guaranteed by promising the players the lions share of revenue generated by increasingly massive television deals. Rupert Murdoch bankrolls the English Premier league to such an extent that his demise would shatter the national game.

    The players need not honour contracts, and can essentially move with impunity whenever they so please, because the transfer system in European football (where each player has a market driven value...
    -03-04-2006, 09:11 PM
  • RamsFan16
    Questions and answers about the NFL labor talks
    by RamsFan16
    Questions and answers about the NFL labor talks

    The sudden change in the climate of labor negotiations between the NFL and the players' association, and the sudden flurry of player cuts, has left many fans with questions. Fortunately, has answers.

    What is the primary issue?
    The deadline to extend the current collective bargaining agreement (CBA) had been scheduled to expire at 12:01 a.m. Friday, March 3. However, the league and the players' union mutually agreed late Thursday to extend that deadline by 72 hours, to Monday, March 6, at 12:01 a.m. This is merely the negotiating period to extend the CBA. The CBA itself does not expire until after the 2007 season.

    Why is that deadline important?
    That deadline represents the beginning of the new NFL fiscal year. Teams had been working under a deadline of 10 p.m. ET Thursday to come into compliance with the salary cap, a six-hour reprieve from the original 4 p.m. ET deadline. However, Thursday's delay in the start of the new league year also pushed back the deadline for teams to release players and clear their salaries from the books. Teams now have until 6 p.m. ET Sunday to get under the 2006 cap limit.

    Could the negotiating deadline be extended again?
    Once thought unlikely, a further delay in the start of the new fiscal year is certainly possible given Thursday's developments. Pushing back the start of free agency gives the league and the union more time to work on an extension, and in the event an extension still can't be reached, gives teams more time to come into compliance with the 2006 cap.

    If the sides are unable to agree on an extension, though, some teams will have to release some very significant players in order to clear cap room. The 2005 cap was $85.5 million, and teams were anticipating a 2006 cap of around $102 million with an extension to the CBA. However, the actual 2006 cap is going to be $94.5 million, which has some teams scrambling to comply.

    If an extension is reached, what happens to players already released for cap purposes?
    A high-level source with one NFL team told the league has informed teams that any player placed on waivers during this period of uncertainty can be recalled from waivers until there is more clarity about the pending free-agency period.

    What happens if a team doesn't comply with the salary cap?
    No team has ever gone over the salary cap, so this is a bit of an unknown. However, teams have been fined in the past for attempts to circumvent the cap. contributor and former Miami Dolphins GM Rick Spielman says NFL commissioner Paul Tagliabue has wide latitude in fining teams -- and even individual team executives -- or stripping draft picks for failure to comply with the salary cap.

    With some teams in dire cap shape, we could see sooner than later just how wide the commissioner's...
    -03-04-2006, 09:07 AM
  • RamWraith
    Alarming labor strife is not end of world
    by RamWraith
    By Bernie Miklasz

    Much to our surprise, another day came and went and the sky did not fall on top of NFL stadiums. The only ominous rumble was more of a squeak, emitting from the voice of NFL Commissioner Paul Tagliabue.

    "The situation is about as dire as dire can be," Tagliabue said Thursday morning.

    Chilling words.

    Amazingly, the Edward Jones Dome is still standing.

    And by late Thursday afternoon, the NFL and the NFL Players Association agreed to extend its deadline for free agency by three days. This cool-down pause also gave the two sides another opportunity, if desired, to reopen negotiations for a new collective bargaining agreement.

    Perhaps Tagliabue and NFLPA executive director Gene Upshaw will settle their differences this weekend. That's a longshot. But either way, please be wary of the voices of doom out there, predicting the end of the NFL as we know it.

    The NFL always has had a heightened sense of drama. After all, this is the only professional sports league with its own film-making division. And it's been a while (1987) since we've witnessed genuine labor discord in the NFL.

    So when Tagliabue and Upshaw broke the glass on a few alarm boxes, we saw an almost universal overreaction to their impasse. Granted, Tagliabue and Upshaw have gotten along so famously through the years it's surprising to see them acting like Bud Selig and Don Fehr, or Gary Bettman and Bob Goodenow.

    Upshaw and Tagliabue have managed to avoid dueling since Tagliabue became the commish in 1989, but a clash was inevitable, because the NFL's pile of money has reached enormous proportions. With so much at stake, Tagliabue and Upshaw aren't above old-fashioned, sports-labor posturing.

    But this is no Armageddon. We didn't even have the "Bloody Thursday" crisis as predicted by hysterical NFL pundits who had fans convinced that dozens of veteran players would be rounded up, placed on waivers and thrown off the side of a cliff into a river so NFL owners could save salary-cap dollars.

    The reality is, the Rams and the 31 other NFL franchises are open for business. And a full schedule of NFL games will be played in 2006 and 2007. And after the 2007 season, the current bargaining agreement will expire. That's right: the owners and the players have two years to close the gap on a new CBA before the NFL is thrown into a true crisis.

    In the meantime, owners will continue to pull in astronomical amounts of revenue, players will continue to receive astoundingly generous paychecks, and the fans will continue to enrich both sides by enjoying the nation's most popular spectator sport.

    The only thing that will change between now and the end of the 2007 season is accounting.

    Unless Taglaibue and...
    -03-03-2006, 05:22 AM
  • Rambos
    NFL owners reject players' union proposal
    by Rambos
    NFL owners reject players' union proposalAssociated Press

    NEW YORK -- The NFL and its players union were at an impasse Thursday, leaving hundreds of players, including some big stars, in danger of getting cut.

    "The situation is about as dire as dire can be," commissioner Paul Tagliabue said after the owners met for 57 minutes to endorse a recommendation by their management council executive committee to reject the union's latest proposal.

    ESPNEWS Special
    For the latest on the NFL's current labor situation, watch a special edition of The Hot List on ESPN and ESPNEWS from 2-4 ET today.

    The breakdown of talks left intact, for now, a salary cap of $94.5 million. The two sides had hoped to add $10 million to $15 million to the 2006 salary cap.

    Without the additional room, some teams could be forced into wholesale cuts to get beneath the cap by midnight, including some of the game's biggest stars, such as quarterback Steve McNair of Tennessee, who has been balking at renegotiating his contract.

    And he might be only one of many as free agency starts Friday.

    Without an agreement, 2006 will be the last season with a salary cap; under the current contract, 2007 is scheduled to be an uncapped year.

    Owners did not seem inclined to cut into the difference of 4 percentage points between the sides. New England owner Robert Kraft had suggested that Thursday morning's meeting might be short, just enough time to rubber stamp the executive committee's decision.

    That's exactly what the owners did.

    "The players are totally out of bounds," said Dallas owner Jerry Jones. Most of the other owners declined comment, unusual in a league where many are eager to express their opinion.

    Gene Upshaw, the executive director of the NFL Players Association, said he expected the move by the owners. He said it was unlikely that talks would resume soon, although some league officials suggested anything could happen.

    But the two sides remain far apart. According to Upshaw, the union wants a little over 60 percent of the league's total revenue; the owners are offering 56.2 percent.

    "I won't come down," Upshaw said Thursday. "The players know that. Only the owners can make a proposal."

    That is unlikely to happen.

    "They have to make a fundamental change in their proposal in how they are defining their expectations for the players," Tagliabue said.

    Beyond the numbers is an issue that has divided the owners for two years: revenue sharing among the teams.

    Under the current system, some teams make far more than others in ancillary income, ranging from local radio rights to stadium naming rights and advertising. The lower-revenue teams say that forces them to commit as much as...
    -03-02-2006, 12:28 PM