STATS BEHIND THE STATS:
Paying for Success
How teams are paying for the influx of spending money and what it means down the line
by
Max Gross
The NFL is widely regarded as the most successful sports league in the country, and arguably the world (some soccer enthusiasts would certainly beg to differ). The growing popularity of the game has led to a new, large television deal providing a financial boost to the teams and to the salary cap. Furthering that success has been the continued labor peace between the teams and the players’ union, which also has recently agreed upon a new collective bargaining agreement that increased the percentage of revenues that would go to player salaries.
The combination of those two factors has caused an unprecedented rise in the salary cap over a two-year span, growing from approximately $85 million in 2005 to approximately $109 million in 2007—a rise of 28%! (The salary cap generally grows 4.5-7% per year or around 10-13% over two years). The cap jump in 2006 was far larger than the increase in 2007, but the benefits as far as player spending were often not immediately recognized. However, the extra cap space in 2006 served to get teams out of dodge, leading to an inordinate amount of free cap space in the current 2007 offseason.
Thus, with extra money to spend, the league has seen an immense amount of action in free agency. A lot has been made about the amount of money spent this offseason on the big-name deals, such as Nate Clements’ $80 million dollar deal and Adalius Thomas’ $35 million dollar deal. These were the prime names on the free agency market, and both are probably among the 5-10 best players at their positions in the league. The fact of the matter is, though, that these signings have relatively little widespread impact on the league. The top CBs in the league were already making close to $8 million per year, and most of the elite players had signed their deals prior to the big financial boon two years ago. To up that to $10 million per year, on average, with some of that money unlikely to be seen really isn’t a giant leap, given the increase of the market. Adalius Thomas’ deal was even better for the status quo, considering that the top LBs already make the same $7 million per year for which Thomas has agreed to play.
So does that mean that the increased spending is simply keeping up with the sky-rocketing revenues and salary cap? The answer to that question can be seen through the deals of ten average-to-good starters at varying positions throughout the league. As everyone knows, agents and players use the deals of their peers as measuring sticks when re-signing or re-structuring their own deals. Therefore every deal signed in the NFL could have a ripple effect. With that in mind, the deals signed by the following players are certain to attract the attention of players and agents league-wide: OL Leonard Davis, TE Daniel Graham, S Deon Grant, LB Napoleon Harris, DL Cullen Jenkins, DE Chris Kelsay, DE Patrick Kerney, S Michael Lewis, FB Ovie Mughelli, and LB Joey Porter.
Each of these players could be labeled anywhere from an average starter to an above-average starter. Few, if any, rank among the top 10 at their position in the league, with the possible exceptions of Grant, Kerney and Mughelli—but even those three are outside of the “elite” bracket of players. Graham, Jenkins, Lewis and Mughelli were not even full-time starters for their previous teams in 2006. If Davis indeed was signed to play OG, then five of these players play for some of the lowest-paid positions in the league, at FB, S, OG and TE. These are the types of players that fill out starting rosters around the league; devoid of superstars, but full of solid players.
However, four of these players got deals worth at least $6 million per year, on average, and three of them received guaranteed money of at least $18 million. One tier down, seven of the ten players got deals that averaged at least $5 million per year with at least $10 million guaranteed. All totaled, these ten players got deals averaging $5.3 million per season with $12.35 million guaranteed. These players, along with countless others this offseason, have set the new bar for a starting-caliber player, and that bar is right around $5 million per season.
The important question now, as players and agents begin digesting this information and responding accordingly, is “can the teams afford this?” The answer is a resounding, “No.” Within two years, several deals will be made or re-structured with this offseason set as the bar. In those same two seasons, most of the deals mentioned above should have at least hit their average annual cap value. Remember also that with the CBA and TV deals now settled, the growth rate of the salary cap is very likely to return to around 5-7% per year. That projects the 2009 salary cap somewhat generously at $123 million.
If, two years down the road, salaries are averaging $5 million per year based on the spending that occurred this offseason, starters alone would eat up $110 million of that cap (22 starters), leaving scant money for the remaining 31 players on the roster. Even if the average for starters is raised to only $4 million per year, the remaining 30 players must average less than $1.2 million per player—and all this is calculated without ever accounting for the $10-$12 million-dollar superstars. Considering back-up QBs (and even back-up LB Ryan Fowler) now make better than $2-2.5 million annually in this “new market,” an average of under $1.2 million for reserves and special teamers may not be feasible.
Clearly, this presents a very problematic cap situation down the road. The phenomenon of “too much, too soon,” hit teams hard this offseason with cap dollars becoming suddenly abundant. As many writers and followers of the league have begun predicting, the results will be increased player hold-outs, increased tension between management and players and increased influence of agents—a reversal of many of the very things that brought about this success in the first place. Sounds like the teams are paying a high price for the hasty culmination of the league's success.
