Questions and answers about the NFL labor talks
The ongoing labor negotiations between the NFL and the players' association has left many fans with questions. Fortunately, ESPN.com has answers.
What is the primary issue?
The league and the players' association have been negotiating an extension to the current collective bargaining agreement (CBA), which expires after the 2007 season. But if an extension is not agreed upon by the start of this year's free agency period, new rules go into effect governing player contracts.
The owners have until 8 p.m.ET Wednesday to approve or reject the final proposal from the NFL Players' Associaiton. If they accept it, free agency will begin at 12:01 a.m. ET Friday. If they reject the proposal, free agency starts at 12:01 a.m. ET Thursday.
The new league year had been scheduled to start 12:01 a.m. Friday, March 3. However, the league and the union mutually agreed to extend that deadline by 72 hours, to Monday, March 6, at 12:01 a.m. Sunday night, the sides agreed to another 72-hour delay, pushing the deadline to 12:01 a.m. Thursday.
Why is that deadline important?
That deadline represents the beginning of the new NFL fiscal year, and all 32 teams must be in compliance with the league's salary cap before the new league year begins. If the owners reject the players' proposal and free agency is set to begin at 12:01 a.m. Thursday, teams must come into compliance with the 2006 salary cap of $94.5 million by 9 p.m. ET Wednesday.
Could the negotiating deadline be extended again?
No. While anything is possible, the players' union is adamant that free agency will start either Thursday or Friday of this week.
If the owners reject the players' proposal, though, some teams will have work to do 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, without an extension the 2006 cap will be $94.5 million.
If an extension is reached, what happens to players already released for cap purposes?
A high-level source with one NFL team told ESPN.com 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 blatantly 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. ESPN.com 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 latitude is. The Washington Redskins are one team to watch in this regard, since some other clubs that have studied the Redskins' cap closely have suggested Washington cannot mathematically get into compliance.
Will any of this affect 2006 free agency?
If the owners accept the players' proposal, the salary cap is expected to rise. With teams having more money to spend, there could be fewer players cut and more competition for the players currently on the market.
If there is no deal, aside from the player pool growing rapidly as teams cut players to comply with the cap, the biggest change in the free-agency landscape will be that teams only will be able to prorate signing bonuses over four years, rather than five, meaning players seeking large bonuses could be disappointed. And since base salaries can increase by a maximum of only 30 percent per year, the huge contracts we've seen recently (Peyton Manning and Tom Brady, for example) are likely a thing of the past. In short, it will be difficult, and in some cases impossible, to meet players' financial expectations.
Will any of this affect the 2006 season?
Only to the extent that some teams could look remarkably different heading into training camp than they did at the end of the 2005 season. But the current CBA actually has two more years to run (2006 and 2007), so if there is going to be a work stoppage at all, it's not likely to happen until 2008.
What happens if there is no extension to the current CBA?
Without an extension, the final season of the current CBA (2007) will be an uncapped season, meaning teams would have no limit on the amount of money they could spend on players.
Given the potential absence of a salary cap in 2007, some 2006 free agents might be unwilling to sign long-term contracts, figuring they could earn even more in the uncapped 2007. And NFL Players Association executive director Gene Upshaw has said once the salary cap goes away, the players aren't going to accept its return. Also, while unlikely, the potential exists that the owners could lock the players out in 2008. That is one reason the NFLPA will consider decertifying.
What does the term "cash over cap" mean?
To comprehend the concept of cash over cap, one has to understand that the salary cap is just a bookkeeping number, one that can be massaged by amortizing signing bonuses, among other mechanisms. The cap has never been indicative of a team's payroll. For example, the Redskin organization, believed to be the highest revenue-producing machine in the league, has had payrolls well over $100 million the last few seasons, even while the highest salary cap level ever was in 2005, at $85.5 million. The difference between a team's true payroll and its salary cap number is essentially what "cash over cap" means.
How will free agency be different in 2007?
Currently, players hit restricted free agency after three years and unrestricted free agency after four years. Without an extension to the CBA, players won't be eligible for unrestricted free agency until after their sixth year. Players whose contracts end after third, fourth and fifth seasons will be considered restricted free agents and subject to qualifying offers from their current teams.
Does an uncapped season also mean there's no salary minimum?
Yes. Currently, there is a salary minimum, as well as a salary cap. Every team must allocate a certain minimum amount to player salaries. However, when the salary cap goes away, so does the salary floor. Teams could choose not to spend a dime.
What happens to players' benefits (401k plans, health coverage, etc.)?
In an uncapped 2007, owners no longer will be responsible for their annual payments of about $13 million apiece to 401k plans, health coverage, life insurance and other programs under the umbrella of benefits. The NFL matches each player's 401k investments 2-for-1.
How does all of this affect the 2006 NFL draft?
Signing draft choices will be more difficult this year, because teams can prorate signing bonuses over only four seasons. Already, agents figure the most a top draft choice can make under that scenario is $15 million, a major reduction from recent years. That likely will lead to long holdouts by draft choices.
What are the long-term ramifications for the league?
Barring a new CBA, the players either will be on strike or the owners will lock out the players in 2008. The union likely will decertify, and antitrust rules will apply. Also, the NFL draft will go away in 2008 as part of a clause inserted into the current CBA. Players coming out of college could be free agents, with no salary restrictions. Open negotiations, including those for rookies coming out of college, will leave it to the players to get what they can get.
What are the long-term ramifications for the players?
If the union does decertify, it will cause a lot of uncertainty for the players. Teams could change the benefits package players receive, and there would be no organization to protect players' interests. Teams could offer salaries well below the currently established minimums.
Information compiled by ESPN.com senior writers Len Pasquarelli and John Clayton and ESPN researchers Craig Wachs and Russell Baxter.
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