Sunday, 03 March 2013 19:39
Creation of salary cap, Saints, Benson, 49ers and behold
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nfl-heavensIn the beginning, there was the Cap, and it was good. NFL owners of diverse means but common interest gazed upon this foundling and were sorely amazed.

 

 

At last, they had discovered deliverance for their fortunes which were beset by the plagues of sinful reprobates such as players, agents and head coaches. This newborn called the Cap promised a new day of redemption as the clouds cleared and the light of eternal profit was manifest throughout the land.

     But into this joyful and peaceful kingdom came a calamity that beset their world and left this gift in spoil and ruin. It was the darkened cloud of renegotiation, conceived by agents and embraced by compliant club executives who wished to preserve both their oxen and their ass. And behold there was great joy among the players, for protection now was afforded their first born, along with the last born and all the middle born in between. And all it took was a little massaging of the Cap. But there arose a great cry from the owners, whose wailing and gnashing of teeth portended overspending and great sorrow. At least until the least of them saw that renegotiation worked for the best of them.

     Teams reduced their Cap by reworking contracts and pushing more money into future years. And, lo, a great trumpet blast was heard throughout the land. Head coaches now were joyful they could hold onto players longer. Fans sent tidings of great joy because their teams won and they bought more tickets. Upon such an epiphany, the owners, who were forced to drink from this poisoned cup, also rejoiced and told all with ears to hear: "We could have stretched forth our hands and stricken you and your people with termination, and you would have been effaced from the earth. Nevertheless, we have spared you for this purpose: in order to show you our power and in order that our fame may resound throughout the world."

     And that is how the Salary Cap went from a greedy device to control payrolls and spending to a benevolent act that allows a team to spend as much money as it can by delaying the pain until another day. And now, I present the modern translation:

     In the year the Salary Cap took effect, I had a conversation with Saints owner Tom Benson about the benefits of reworking contracts to create more cap room. Benson was not in favor of the practice since creating more cap room simply was a method for a club to spend more money. As a rookie capologist, I had to let that one sink in. We had a veteran team by then with a top-ten payroll, and the Salary Cap put us in the squeeze. I suggested we do what other teams, such as the 49ers were doing, and convert base salaries, which count 100% in the contract year, to bonuses, which were pro-rated over the term of the contract.

     For example, take a player who had a $2 million base salary in the second year of a four-year contract. Converting $1,500,000 of that to a bonus pushes two-thirds of the amount into future Cap years, creating $1 million in Cap room today. To Benson's point, that transaction did not "save" money, it only created room to spend $1 million more this year. We merely pushed $1 million of our obligation further down the road.

     Needless to say, we were discouraged from reworking contracts in those years. So forgive me if I recall that conversation in the context of stories that the current Saints are $20 million or so over the Cap and are frantically reworking contracts to push a large amount of it into future years. The NFL has come around to the thinking that you do what you need to do to keep a team together as long as possible. That is the message I received years ago when I asked former 49er GM Carmen Policy about reworking contracts. "Didn't you know you were pushing large amounts of money into the future and well beyond some players' useful life?" 

     Policy's response was measured, but accurate. "Of course we knew that," he said. "But when you are winning and have a chance to go all the way when do you pull the plug?" I guess that is what a Super Bowl victory will do for you. 


My new book, "Where the Water Kept Rising," is now available in local bookstores, at Amazon.com and at my website: www.JWMillerSports.com
 
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