Salary Cap (NFL)

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The salary cap (including the salary cap; German  salary cap ) of the National Football League (NFL) is the maximum amount that a team can spend in a season for their players' salaries. The contract for the salary cap also contains regulations on lower limits for the league and individual teams. Like other sports leagues in North America, the NFL has a salary cap to prevent financially strong teams from signing the best players for large sums of money. This is to keep the competitive advantage over financially weak teams low. Since there are no promoters or relegators in the NFL, the salary cap is an essential component in addition to the NFL draft to ensure a long-term balanced competition.

history

The salary cap was negotiated in 1993 and introduced for the 1994 season . The extension negotiated in 2006 (running until 2012) was canceled by the team owners on May 20, 2008 by means of an option - which was also open to the players' union. This led to the fact that the salary cap was suspended for one year in the 2010 season ( uncapped season ) because the owners and players could not agree on a new collective bargaining agreement (CBA) in time and the original contract then, for the last season of its term, a year without a salary cap. Most teams behaved as if a salary cap would continue to apply and some even use - in view of an impending labor dispute - the effect that the lower limit was also not applicable in 2010 in order to save salary costs. In addition, the league warned their teams against making large salary shifts into the unregulated year. In March 2012, the were Dallas Cowboys 10 million US dollars and the Washington Redskins 36 million US dollars from their caps (spread over 2012 and 2013) subtracted because they violated this agreement among team owners and the league. All other teams - with the exception of the Oakland Raiders and the New Orleans Saints , who committed similar violations to a lesser extent - were allowed to spend 1.6 million US dollars more under the salary cap for 2012 in return.

After the 2010 season unregulated negotiations between the league and the players union still running and in March 2011 the players were on the team owners locked ( lockout ). In good time before the start of the 2011 season , in August 2011 after a four and a half month lockout, the two parties agreed on a new ten-year contract.

In early 2020, the NFL and the players' union agreed on a new collective agreement. Among other things, this provided for the introduction of the Veteran Salary Benefit and an increase in the salary cap, since 48 percent (instead of 47 previously) of league income will be distributed to the players from the 2021 season .

system

Calculation of the salary cap

The salary cap results from the total income of the NFL, of which a certain percentage should then be spent on player salaries. This amount is divided by the number of teams to calculate the amount per team. At the beginning of the salary cap, this was essentially just the money from TV contracts, tickets and merchandising . The extension in 2006 added income from the sale of naming rights and local advertising. Since the CBA of August 2011, in principle all league revenues are included. Of this total income for the league - which is calculated in three areas ( Media , Ventures / Post-Season and Local ) - between 47 and 48.5 percent are made available to the players as part of the salary cap.

Lower limits

In the new CBA there are two lower limits for the disbursement of funds: one for the league (for the 2011 and 2012 seasons) and one that applies to each team (from 2013). In the 2011 and 2012 season, the NFL actually had to pay out at least 99% of the salary cap - which was easily achieved thanks to the type of contracts in the NFL (larger payments of bonuses at the beginning of a contract). The new lower limit for teams has only been in effect since the 2013 season (this rule was suspended in 2011 and 2012) and must be complied with within four years. The first period runs from the 2013 season to the 2017 season . Within these four years, the teams have to spend an average of at least 89% of the salary cap on eligible player salaries. In return, unused cap space since 2011 can be carried over into the following year.

Punish

If the salary cap is exceeded, the respective teams will be penalized, ranging from fines to canceled player contracts to the loss of draft picks . There are no special penalties for falling below the lower limit, except that the shortfall must be paid to the players' union. In addition to the penalties against teams, there were also fines for officials who tried to circumvent the salary cap. For example, in December 2000, in order to try to circumvent the salary cap, in addition to the San Francisco 49ers (payment of $ 300,000 and loss of draft picks in the 5th round in 2001 and in the 3rd round in 2002), their general manager Carmen Policy and Vice President and later General Manager , Dwight Clark , were fined $ 400,000 and $ 200,000, respectively. Likewise, three players' agents had to donate a total of $ 350,000 to charity.

Payoffs

A team's cap basically includes salaries for current and former players. Salaries for coaches and other employees of the teams do not count towards the cap. During the off-season , only the basic salaries of the 51 highest-paid players ( Top 51 Rule ) are offset against the salary cap. During the season, all basic salaries of the 53-man squad, the players on the Injured Reserve List , the Physically Unable to Perform List and the Non-Football Injury List as well as the members of the Practice Squad are used to calculate the salary cap. Some contracts contain special rules for injuries, according to which a reduced salary is paid if the player is absent. This reduction in expenses is also reflected in the salary cap. Players on the Non-Football Injury List are not entitled to a salary, even if continued payment of salaries is usually negotiated, which, however, can also be below the minimum salary. In addition to the basic salaries ( P5 Salary , according to §5 of an NFL contract, which regulates the annual basic salary, the base salary ), bonus payments (also during the off-season from all players!) And premiums are used to calculate the salary cap .

Signing bonus

The salary of a contract in the NFL is not guaranteed. If a player is dismissed or a contract is renegotiated (over an existing contract period), the salaries agreed in the old contract for the corresponding season are no longer valid. The teams usually offer the players such contracts, the basic salary of which increases with the term ( back-heavy contract ). To make the acceptance of such a contract palatable to a player - although the salary is not guaranteed in later seasons and he earns less in the first few years - a “ Signing Bonus ” is offered. The signing bonus is a guaranteed payment for the player without any further restrictions. As long as the player fulfills his contract, the bonus will be applied over the entire contract period. If a player is released, the team changes or leaves the league, all remaining cap-relevant payments will be fully offset in the next year. The deadline for crediting in the old or new season is June 1st ( Post-June-1-Cut ). Teams can declare two players per season as a “Post-June-1-Cut” before this day.

Example: Andrew Luck in 2012 signed a four-year contract for 22.1 million US dollars for the Indianapolis Colts, which included a signing bonus over 14.5 million. From 2012 to 2015, the signing bonus was 3.625 million against the Colts' salary cap. Added to this were the agreed salaries for the respective season (from just under $ 400,000 in 2012 to almost $ 3.5 million in 2015).
Had Andrew Luck left the Colts in late 2012, the remaining $ 10.875 million (3 times $ 3.625 million) would have counted against the Colts' 2013 salary cap. Such Cap-credits, for players who no longer part of the team, is called dead money (dead money).
If he had extended his contract for another four years (until 2019) before the 2014 season and had received a signing bonus of 24 million dollars in return, this bonus would have been spread over the entire remaining term of his contract - i.e. 6 million dollars for each season 2014. For 2014 and 2015, the Salary Cap for the Colts would add the $ 3.625 million signing bonus from his first contract. For the seasons from 2016 onwards, the other agreed salaries of the contract extension.

Performance incentives

In addition to the signing bonus, there are other bonus payments that are not guaranteed. The performance incentives ( incentives ) are divided into two groups. In incentives that are likely to be paid out (LTBE - Likely to be earned ) and those that are probably not paid out (NLTBE - Not likely to be earned ). The former count against the cap, the latter do not.

If a player played in all 16 games from the beginning in the 2015 season, a bonus for 10 starts would be an LTBE bonus. For a running back who never played more than 10 games in a season and never scored more than 500 yards, a bonus for 1000 yards would be an NLTBE bonus. A performance bonus falls under NLTBE if the player did not achieve the corresponding performance in the previous season. Controversial cases arise around injuries and new players. If there is a disagreement between the team owners and the players regarding the assignment, an independent arbitrator will decide whether the incentive belongs to one group or the other.

All incentives in the first year of a rookie contract are now part of the LTBE bonuses. Likewise, all incentives that only the player controls (such as attendance bonuses for voluntary training camps or a bonus when maintaining a maximum weight) automatically belong to the LTBE bonuses. The new 2011 collective bargaining agreement prevented some of the earlier creative incentives, some of which never had to be taken into account in the context of the salary cap. Under the new collective agreement there are much cheaper contracts for rookies than in the previous year.

Veteran Salary Benefit

The Veteran Salary Benefit will be available from the 2020 season . This gives the teams the option of not having to offset a salary against the salary cap for certain players. It may be applied to a player's salary or split between two players. Only players who have been under contract with the same team for the past four years without having been dismissed and who have signed a one-year contract with the team as a free agent are eligible for this benefit . It increases by $ 100,000 every two years and was $ 1.25 million when it was launched.

Minimum salaries

Minimum wages for the players are also set in the collective agreements. For the 2016 season, for example, a graduation applies, according to which a minimum salary of 450,000 US dollars was applicable for rookies and then increasing until players with 10 or more accumulated seasons ( Accrued Seasons - six games or more in the 53 squad or one of the injury lists ), a salary of at least $ 985,000 must be paid. The minimum salary increases by $ 15,000 annually at all levels.

criticism

Critics complain that the salary cap can be circumvented by additional bonuses, such as the so-called signing bonus , which would give the financially strong teams an advantage.

It is also criticized that the salary cap leads to the fact that most players in the NFL are very young, as they usually get the low salaries from the rookie season and a franchise thus gives the stars more leeway.

Further criticism is directed at the lower limit, as due to it some teams overpay their players just to meet the salary cap.

It is also criticized that the salary cap does not differentiate between the environment, especially when it comes to the influence of state income taxes. For example, teams in Washington, Texas, Tennessee, and Florida, where there is no state income tax, would have about 20 million more net salary cap than teams in California, where the state has an income tax of 13.3%. The different cost of living would also not be considered. This would give some teams a great advantage or disadvantage in recruiting players.

development

NFL Salary Cap in US dollars

NFL 2019 NFL 2018 NFL 2017 NFL 2016 NFL 2015 NFL 2014 NFL 2013 NFL 2012 NFL 2011 NFL 2010 NFL 2009 NFL 2008 NFL 2007 NFL 2006 NFL 2005 NFL 2004 NFL 2003 NFL 2002 NFL 2001 NFL 2000 NFL 1999 NFL 1998 NFL 1997 NFL 1996 NFL 1995 NFL 1994

Web links

  • Detailed FAQ on the salary cap

Individual evidence

  1. ↑ a b c d e f The Salary Cap System explains: This is how NFL contracts work. SPOX, accessed March 15, 2016 .
  2. ↑ NFL: Salary cap rises to $ 155 million. February 27, 2016, accessed March 15, 2016 .
  3. ^ NFL owners opt out of CBA. National Football League (NFL), May 20, 2008, accessed June 8, 2016 (article updated July 26, 2012): “The current Collective Bargaining Agreement, initially negotiated in 1993, has been extended on several occasions, most recently in March 2006. The 2006 extension, which could have continued through the 2012 season, gave both the NFL and the NFLPA an option to shorten the deal by one or two years. "
  4. ↑ Pat Kirwan: 2010: An uncapped year odyssey. In: nfl.com. July 14, 2008, accessed March 15, 2016 .
  5. ↑ NFL teams reluctant to break the bank during uncapped year. National Football League (NFL), December 3, 2010, accessed on June 8, 2016 (English, article updated on July 26, 2012): “The collective bargaining agreement reached in 2006 included a clause eliminating the salary cap in 2010, although the league and union both assumed they'd complete a new deal long before that ever occurred. Instead, the deadline came and went last winter without anything close to a new CBA, leading to an uncapped season this year. "
  6. ↑ NFL teams reluctant to break the bank during uncapped year. National Football League (NFL), December 3, 2010, accessed June 8, 2016 (article updated July 26, 2012): “For all the talk about the salary cap in the NFL, many fans might not even realize the rules also included a floor. But with a potential labor stoppage looming, the chance to save money proved more appealing to some teams than the opportunity to splurge. "
  7. ↑ Chris Burke: NFL hits Cowboys, Redskins hard by docking salary cap space. Sports Illustrated, March 12, 2012, accessed on June 8, 2016 (English): “Both teams were punished by the league Monday for front-loading contracts during the 2010 uncapped year - something the league cautioned teams against doing. As a result of failing to heed those warnings, the Redskins were docked $ 36 million and the Cowboys $ 10 million. "
  8. ↑ Barry Wilner: NFL union files suit against league over 2010 cap. National Football League (NFL), May 23, 2012, accessed on June 8, 2016 (article updated on August 15, 2012): “Just over two months after that uncapped season, the league locked out the players in March 2011. The salary cap was reinstated in the new, 10-year CBA finalized last August. "
  9. ↑ NFL salary cap will increase to $ 198.2M in 2020. In: nfl.com. NFL.com, accessed March 20, 2020 .
  10. ^ A b Maury Brown: Everything You Need To Know About NFL Free Agency 2016. In: forbes.com. March 9, 2016, accessed March 15, 2016 .
  11. ↑ Tyler Brooke: How Does the Salary Cap Work in the NFL? Bleacher Report, June 10, 2013, accessed on June 8, 2016 (English): "Prior to the latest collective bargaining agreement, or CBA, this number was based off of defined gross revenue, or money earned from contracts with national television networks, tickets sales and merchandise. This changed in 2006 and included things such as naming rights and local advertising. In the most recent version of the CBA, the cap includes essentially all streams of revenue. "
  12. ↑ Louis Bien: The 2015 NFL salary cap explained. The NFL salary cap is as high as it has ever been, but what exactly does that mean? SB Nation, March 2, 2015, accessed on June 8, 2016 (English): "The figure is derived from NFL revenue, of which players receive no less than 47 percent and no more than 48.5 percent according to the collective bargaining agreement ratified in 2011. "
  13. ↑ Al Lackner: NFL Salary Cap FAQ. In: askthecommish.com. June 7, 2016, accessed on June 8, 2016 (English): "The CBA Percentage is as follows: Players receive 55% of AR (Media), 45% of AR (NFL Venture / Post Season) and 40% of AR ( Local). Overall, the players receive between 47% and 48.5% of total revenue. "
  14. ↑ Mike Florio: Per-team spending minimum doesn't apply until 2013. NBC Sports, July 30, 2011, accessed June 8, 2016 : “The summary of the final deal that we obtained on Monday confirms that, indeed , the “minimum team cash spend” applies on a four-year basis from 2013 through 2016, and from 2017 through 2020. No minimum per-team expenditure applies for 2011 and 2012. Still, on a league-wide basis, the labor deal requires the NFL to spend 99 percent of the salary cap in cash in 2011 and 2012. "
  15. ^ Sander Philipse: NFL salary cap floor explained: It's basically irrelevant. Bucs Nation, March 13, 2015, accessed on June 8, 2016 (English): "Even so, there's no additional punishment beyond" spend the extra money. " If the team hasn't spent 89% of the salary cap over that period, they'll have to fork over the difference to the NFLPA after 2016. "
  16. ↑ Don Pierson: Cheaters Get Off Cheaper In Nfl. 49ers 'Cap Penalty Less Than T'wolves'. Chicago Tribune, December 5, 2000, retrieved June 8, 2016 : "Policy will pay $ 400,000 and Clark $ 200,000. The 49ers agreed to pay $ 300,000 and surrender their fifth pick in the 2001 draft and third selection in 2002. The settlement, made with the agreement of the NFL Players Association, also calls for the player agents involved - Leigh Steinberg, Jeff Moorad and Gary Wichard - to contribute $ 350,000 to charities. "
  17. ^ Adrian Franke: The Salary Cap System explains: This is how NFL contracts work. SPOX, June 12, 2015, accessed on July 19, 2016 : “In addition, there is still some leeway for the teams in the offseason. For example, initially only the 51 best-paid players count against the cap. Only at the start of the season does the entire 53-man squad have to fit into the cap. "
  18. ↑ a b Jeff Legwold: Q&A: NFL's injured-reserve list has salary cap ramifications. Denver Post, August 21, 2011, accessed on July 19, 2016 : "When a player goes on injured reserve, his full salary cap figure counts against his team's salary cap unless otherwise specified in the player's contract."
  19. ↑ a b David Fucillo: NFL PUP list, Injured Reserve, NFI list rules and the 2015 San Francisco 49ers. July 23, 2015, accessed on July 21, 2016 .
  20. ^ Mark Sandritter: NFL practice squad: Salary, rules and eligibility. August 31, 2013, accessed July 19, 2016 .
  21. ↑ Ebenezer Samuel: As NBA players get rich, NFL players can only watch - and whine. NY Daily News, July 2, 2016, accessed July 20, 2016 : “NFL teams, meanwhile, have 53-man rosters. Roger Goodell's league actually has a $ 155 million salary cap, but with vast rosters, plus payouts to injured players and practice squad participants, that money dwindles quickly; the average NFL salary is $ 2.11 million. "
  22. ↑ Mike Sando: How do contracts work? Glad you asked. ESPN, March 7, 2013, accessed July 29, 2016 .
  23. ↑ Tyler Brooke: How Does the Salary Cap Work in the NFL? Bleacher Report, June 10, 2013, accessed on July 29, 2016 (English): “In order to persuade players to sign back-heavy contracts, teams can offer signing bonuses. This is guaranteed money that is given to the player and is given regardless of whether or not the player stays with the team. "
  24. ^ Adrian Franke: The Salary Cap System explains: This is how NFL contracts work. SPOX, June 12, 2015, accessed on July 19, 2016 : "That means: A signature bonus of ten million dollars in a five-year contract charges the cap with two million dollars each season, although the player has long since received the full amount. For example, coveted players can be signed into the Free Agency even if there is little space left in the cap. At the same time, it is a security for the players themselves, since they receive this money, regardless of whether they are released before the end of the contract. "
  25. ^ Adrian Franke: The Salary Cap System explains: This is how NFL contracts work. SPOX, June 12, 2015, accessed on July 19, 2016 : "Each team can declare up to two players per offseason as a" Post-June-1-Cut "- even if the actual dismissal has already taken place. The trick: the contract will continue to be kept in the team's books as normal until June 2nd. Only then will the new cap numbers actually apply. "
  26. ^ Adrian Franke: The Salary Cap System explains: This is how NFL contracts work. SPOX, June 12, 2015, accessed on July 19, 2016 : "The LTBE bonuses are calculated against the cap, the NLTBE bonuses are not."
  27. ↑ Tyler Brooke: How Does the Salary Cap Work in the NFL? Bleacher Report, June 10, 2013, accessed on July 29, 2016 (English): "If a player has an incentive that is performance-based that he did not complete in the previous year, this is considered NLBTE and therefore not counted against the cap. "
  28. ^ Adrian Franke: The Salary Cap System explains: This is how NFL contracts work. SPOX, June 12, 2015, accessed on July 19, 2016 : “The 2011 deal, which runs through 2020, has almost completely eliminated that. Mega rookie deals like that of Sam Bradford, who signed for six years and 78 million dollars (50 million guaranteed) after the 2010 draft, are a thing of the past. "
  29. ↑ Cowboys use Veteran Salary Benefit to re-sign Looney. In: nfl.com. NFL.com, accessed March 20, 2020 .
  30. ↑ NFL Minimum Salaries For 2016 And The Veteran Cap Benefit Rule. January 11, 2016, accessed June 26, 2016 .
  31. ↑ a b Ben Volin: Why a higher salary cap isn't necessarily good for all NFL players. In: bostonglobe.com. March 5, 2016, accessed March 15, 2016 .
  32. ↑ Jim Pagels: Tax-Adjusted Salary Caps Illustrate Huge Disparity In NFL Payrolls. In: forbes.com. Forbes, accessed March 24, 2020 .
  33. ↑ Jeffery Roy: NFL Salary Cap 2013: The World Really Is Flat. March 27, 2013, accessed March 15, 2016 .
  34. ↑ NFL: Salary cap rises to $ 155 million. February 27, 2016, accessed March 15, 2016 .