Many NFL head coaches and assistants are seeing their jobs end this offseason and with that comes hype as new coaches step into the shoes and get ready to make their marks on the rosters they inherit. Inevitably they bring in their own coaches for staff, sometimes their own scouts, and most importantly their own players. This is a look at the impact of the Salary Cap on the NFL and more importantly, the impact it can have on teams that obtain new head coaches (and in several cases, new GMs as well).
The Basics Behind the Salary Cap
The 2014 NFL Season will see a league wide salary cap of $126.30 Million. Teams generally have 8 players on a practice squad and if there for the entire season, they can earn $102,000 or at least a minimum of $6,000 per week with teams varying on how much they pay their PS members.
Let’s say you have Team A. They pay 8 PS players $816,000 for the entire 2014 Season. That now leaves them with $125,484,000 for their 53 Man Roster, averaging out to $2,367,622 per player on that team. Some players will be making a lot more than that and other players will be making the bare minimum. The trick for GMs and HCs is to try and handle the cap they have for the present season as well as the next 3-5 years down the road. If they try to pay everybody now, they’ll struggle to pay them down the road and every salary paid to Paul takes away from the money paid to John.
Now you have Team A and Team B, both with the exact same money available from above: $125.48 Million. They are both pursuing 4 free agents and both teams can only sign 1 of them. Teams can use signing bonuses (pro-rated over the years of the contract), roster bonuses for making the team, workout bonuses, and bonuses that can be likely to be earned vs. not likely to be earned (based on the previous year).
I’ll try to keep this simple and avoid changing base salaries by year, etc. I’ll assume A & B hit incentives and D does not. Normally, teams usually have escalating base salaries e.g. $4 Million, $8 Million, and $14 Million for a 3 Year Deal worth $26 Million.
QB A and B both threw for 3,500 yards in 2013. QB C and D both threw for 2,800 yards in 2013.
QB A’s Demand: 4 Years for $80 Million with $16 Million SB. RB of $3 Million and Incentive $1 Million for 3,000 yards.
QB B’s Demand: 6 Years for $60 Million with $8 Million SB. Incentive $3 Million for 3,000 yards.
QB C’s Demand: 3 Years for $9 Million with $4 Million SB. RB of $1 Million.
QB D’s Demand: 5 Years for $10 Million with $7 Million SB. RB of $2.5 Millon. Incentive $2 Million for 3,000 yards.
QB’s A and B would have LTBE Incentive based on the 2013 Season. Every year they meet the incentive, that bonus goes into the next year’s salary cap (e.g. 3,000 yards in 2013 goes into the 2014 Cap Hit and 2014 goes into the 2015 Cap Hit). QB D would be NLTBE for 2014 but could change in future seasons.
QB A’s Cap Hit in Year 1: $20 Million Base Salary + $4 Million SB + $3 Million RB + $1 Million = $28 Million (22.3% of Cap).
QB B’s Cap Hit in Year 1: $10 Million Base Salary + $1.33 Million SB + $3 Million = $14.33 Million (11.42% of Cap).
QB C’s Cap Hit in Year 1: $3 Million Base Salary + $1.33 Million SB + $1 Million RB = $5.33 Million (4.25% of Cap).
QB D’s Cap Hit in Year 1: $2 Million Base Salary + $1.40 Million SB + $2.5 Million RB = $5.90 Million (4.70% of Cap).
QB A’s Total Cap Hit: $112 Million
QB B’s Total Cap Hit: $85.98 Million
QB C’s Total Cap Hit: $15.99 Million
QB D’s Total Cap Hit: $29.50 Million
Since only the siging bonuses are guaranteed, teams can cut players at will and only pay them the rest of their prorated SB. This also shows that even though a player may have a cheaper base salary, the extra stuff tacked on can create a slightly higher cap hit and mean the difference between signing a free agent or letting a talent go.
The Initial Salary Cap
The first salary cap was instituted in 1994 at $34.608 Million. It gradually grew to $37.10 Million in 1995, $40.753 Million in 1996, $41.454 Million in 1997, and $52.388 Million in 1998.
Players who were to be Free Agents were given letter grades in accordance to any compensation to the original team. They were initially called Plan A, Plan B, and Plan C free agents with A’s being the highest tier and usually commanded the highest contracts as well.
The designation of players heralded almost near instantaneous bidding wars for various key free agents. DE Reggie White had been a member of the Philadelphia Eagles from 1985 through 1992, before signing with the Green Bay Packers in 1993. He signed a 4 year deal worth $17 Million (averaging $4.25 Million per year). He was one of the highest paid players on the Green Bay Packers.
QB Scott Mitchell made a name for himself in 1993, taking over for the Miami Dolphins after QB Dan Marino would go down with a season ending injury. He threw for 1,773 yards with 12 TD in just 7 starts. With the new free agency and salary cap, he managed to secure a 3 year deal worth $11.1 Million (averaging $3.70 Million per year) with the Detroit Lions.
The high salaries coincided with teams spending themselves to the cap and forcing a tactic that continues to go on today in having players cut their salaries just to remain on the roster and allow the team some maneuverability in re-signing their own players or other free agents. FS Ronnie Lott cut his salary down from $1.40 Million in his final year prior to the 1994 NFL Season. The reason? The New York Jets simply did not have a whole lot of room under the $34.6 Million Cap and had to get creative and even restrictive to make room. A New York Times Article from 1994 pointed out that WR Chris Burkett retired rather than take a pay cut and eventually lost WR Rob Moore to the Arizona Cardinals in 1995. Burkett had been coming off years of 57 and 40 catches, generating a huge blow to the Jets offense and was partly why they went from 8-8 to 6-10.
In addition to players jumping from team to team in the offseason and being pitched while creating bidding wars, teams found themselves scrambling to suddenly have to replace key production at various positions as a result of a player leaving. WR Anthony Miller, coming off a year where he had 84 catches for 1,162 yards, left the San Diego Chargers and signed with the Denver Broncos. DE Chris Doleman had back to back years of 14.5 and 12.5 Sacks with the Minnesota Vikings but quickly signed a deal with the Atlanta Falcons before eventually landing with the San Francisco 49ers for 3 seasons.
From 1988-1994 the San Francisco 49ers won 3 Super Bowls and made 6 NFC Title Championship Games. From 1995 on, when other teams were able to start poaching their free agents knowing San Francisco would struggle to re-sign everybody, the 49ers only made it to the NFC Title Game in 1997 and lost in the Divisional Round in 3 out of 4 seasons.
The Dallas Cowboys were dominant from 1991-1995, winning 3 Super Bowls and making it to 4 NFC Title Games. Once again, as their talent started getting poached and their own free agent signings struggled, they gradually fell by the wayside leaving the door open for teams like the Green Bay Packers and St. Louis Rams in the mid and late 1990s.
The Denver Broncos were busted twice for salary cap penalties involved in circumventing deferred payments notably to John Elway and Terrell Davis from 1996-1998. They would lose a 3rd Round pick in the 2002 NFL Draft and later lose another 3rd Round pick in the 2005 NFL Draft.
The Struggles With the Salary Cap
Prior to the 2011 NFL Draft, rookies generated massive contracts depending on when they were drafted and as a result, if a team whiffed on a draft pick they were usually forced to suffer both through ineffectual play on the field but also a riptide of woes on their salary cap.
Often times they had to eat the salary for at least 3 years and missed out on other free agents or lost out on re-signing valuable contributors as a result. In the 1998 NFL Draft, QB Ryan Leaf was selected 2nd Overall and signed a 4 year deal worth $32.50 Million (averaging $8.125 Million per year) that set back the San Diego Chargers for almost 10 years. One of the most well known recent cap blowups came courtesy of Jamarcus Russell whom signed a 6 year deal worth $68 Million upon being drafted by the Oakland Raiders in 2007 (averaging $10.8 Million per year). Russell was on the Raiders roster for 3 seasons and was involved in a situation where the Raiders demanded to recoup their money from him. The team is still trying to deal with salary cap issues as a result.
With the change in the draft salary structure, the money is more able to be spread around and taken on by an NFL Team allowing them to maneuver the cap a bit more freely without tying up too much money in a single player such as a 1st Round quarterback or 1st Round offensive tackle.
Salary Cap Hell and How It Effects New GMs and Head Coaches
The Oakland Raiders of 2013 had to eat a lot of dead money in order to try and create much needed cap space for the 2014 NFL Season. As a result, they were dead last in the NFL paying out just $64.80 Million. The New York Jets, another team that was struggling with trying to get under the cap, ended up paying $98.50 Million and finishing 26th.
In 2000, GM Scott Pioli and HC Bill Belichick inherited a New England Patriots team that was $10.50 Million over the Salary Cap. The worst part? That was with 36 players signed meaning they needed to find a way to not only get under the cap but also find a way to get 17 players on their 53 Man Roster (in addition to 8 practice squad players). By 2001, courtesy of the absolutely fantastic Patriots Cap Fan Site, the Patriots were projected to be around $5-$6 Million under the 2002 Salary Cap. By 11/25 of the 2002 NFL Season, the Patriots were just under by $2.69 Million.
The issue continues to remain and will haunt several teams as the NFL Offseason begins and starts to shift towards the 2014 NFL Season. The Dallas Cowboys are reportedly $31 Million over the cap in large part due to the penalties incurred during the uncapped year of spending in the 2010 offseason.
Here are some team cap numbers thanks to the equally great Overthecap.com for teams with incoming head coaches sorted by least cap space to most.
Remember that the 2014 Cap is $126.30 Million.
Houston (HC Bill O’Brien): $118,726,430
Tampa Bay (HC Lovie Smith): $115,704,878
So before you start taking to task the head coach for only winning 4 games in his first year, maybe take a deeper look at the salary cap situation of the team.
credit to Overthecap for the feature image as well