Toss out the salary cap? Are you crazy?
Some owners are talking about doing away with the salary cap in 2008. But considering the surplus of cap room this season, that would be a huge mistake.
One of Paul Tagliabue's final achievements as NFL commissioner didn't sit well with his bosses, the owners.
It happened during a winter day in 2006 at an airport hotel in Dallas. The league's salary cap, first established in 1994, was set to expire. Frustrated owners kept debating the merits and costs of continuing the system. Meanwhile, NFLPA boss Gene Upshaw was on a flight to Hawaii for a board meeting with his union. The potential for labor disharmony was very real.
As the deadline approached, the high-revenue owners and the low-revenue ones reluctantly worked out an agreement in which they accepted the union's last proposal. Tagliabue had his labor peace and the salary cap was saved. But owners hated the results. Plans were made to revisit the collective bargaining extension toward the end of the 2008 season and evaluate whether to continue having a salary cap.
And if they follow through on those plans and scrap the cap?
The 2007 season has started and more than $262 million of cap room remains. Having that much money available is staggering. The salary cap rose to $109 million, and every player is signed -- except for Raiders rookie QB JaMarcus Russell, who'll cost $3 million this year -- and still there is an average surplus of $8 million per team.
Nice pocket change if you can get it.
Talking to some of the most disgruntled owners at that meeting in 2006, I told them the benefit of the salary cap is twofold. First, it gives a cost projection in which the finance people can build their budgetary models. Second, there is no mandate to spend every cap dollar.
That's a pretty good system. Fans might complain about their hometown team being cheap and not spending up to the salary cap, but no owner is ordered to spend good money on bad players. And the reality is that not as many good players hit the free-agent market as you might think.
Let's look at the current status of players from the 2006 free-agent pool. Already cut are Milford Brown, Kendrick Clancy, Matt Bowen, Keyshawn Johnson, Dante Wesley, Sam Adams, Jason Fabini, Ryan Hannam, Mike Vanderjagt, Ross Verba, Rex Tucker, Bennie Anderson, Reche Caldwell, LaVar Arrington and Antonio Bryant. Despite the multiyear contracts those players received, many of them have yet to find new homes.
The NFL is structured on a "need to pay" basis, but until the owners understand the advantages for them, they threaten to blow a system that works for both sides.
For the players, the money is there to get great contracts. Defensive end Dwight Freeney hit the jackpot with the Colts, signing a six-year, $72 million deal. Guards topped the market at $7 million a year. With so much cap room available, the sky is the limit for those players with leverage.
Meanwhile, the owners have the ability in this system not to pay a player, and those players without leverage usually settle for the minimum salary. Plus, full contracts aren't guaranteed. If re-signing some players becomes too costly, owners can whack a few high-priced guys on the decline and readjust their budgets.
Of course, no salary cap is perfect. There will be problems. The rookie pool is a joke because contracts with $31 million guarantees can be creatively crafted by agents (don't expect the union to give up any big contract like that). And it irks the union to see basketball and baseball players get full guarantees despite playing less-dangerous sports.
Yet everything is a trade-off.
The reality of the NFL's salary cap is that just about everyone is replaceable. Look at the Colts. They lost Cato June, Nick Harper, Jason David, Booger McFarland and others. Somehow, team president Bill Polian found enough young defenders to limit the Saints' high-powered offense to just three points in the opener.
To gain some understanding of the system, owners need to study the free-agency movement trends.
The average team averaged slightly more than 14 new players on its 2007 roster. A year ago, that average was around 17. Realize that the 2007 number is bloated a little bit by new coaches such as Ken Whisenhunt (Arizona), Lane Kiffin (Oakland) and Cam Cameron (Miami), who each brought in more than 20 new players. When teams cut to 53 on Sept. 1, most had 13 or fewer new players.
The key to this system is for teams to have every need fulfilled by the draft. Few free-agent veterans signed after the draft managed to make the roster of their new teams.
Indeed, a lot of myths were dispelled this offseason. You hear GMs talking about the wave of June 1 cuts that might be available, but that market ended a few years ago. Many of the players released after the draft weren't good enough to make the rosters of new teams. Players on the roster were better than players on the streets -- and that's the way it's supposed to be.
The smart teams benefit. No team works the postdraft market better than the Patriots, but they didn't find any gems this year. Instead, coach Bill Belichick and VP Scott Pioli did their work from the start of free agency through the draft, and that's now the window for most good teams trying to upgrade their rosters. The Patriots' moves could net them their fourth Super Bowl ring.
In 15 years of cap economics, the system is maturing. Teams that draft well, recognize their good, young players early and give them contract extensions are rewarded. Teams that draft poorly and rely on free agency are doomed to 10-loss seasons.
While the salary cap was put in for economic stability, it has had great success leveling the playing field and creating a more competitive league.
From the sound of owners, though, they want to discard it after the 2008 season and use hardball negotiations get what they want. That would be a disaster. The NFL doesn't need labor problems. It needs players.
A free-market system would kill competitive balance. Without a salary cap, the small-market teams won't be able to compete against the big-market teams with new stadiums. Imagine the competitive advantage the Cowboys, Giants and Jets would have in their new stadiums if they didn't have the constraints of a salary cap.
What's wrong with a system that gives a team $109 million to spend, and at the end of the day, that team can pocket $8 million or invest in negotiations for future seasons?
Answer: Nothing. Too bad most owners don't yet realize that.
John Clayton is a senior writer for ESPN.com.
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