POSTED 10:00 p.m. EST, March 2, 2006

 

58 PERCENT EQUALS $104 MILLION SALARY CAP

 

We've been suggesting in this space for the past couple of days that the supposed gulf between the NFL and the NFLPA of 3.8 percentage points of total football revenue is a gap that easily can be resolved by essentially splitting the difference.

 

The league is at 56.2 percent of total football revenue, and the union is at 60 percent.  Logic tells us that the deal gets done at 58 percent.

 

And we've picked up some info that corroborates our belief in this regard.  Per a league source, it's been projected that 56 percent of total football revenue equates to a $100 million salary cap -- less than $5.5 million more than the current cap number of $94.53 million.  It's also been projected, we're told, that each additional percentage point will result in another $2 million per team in cap room.

 

At 58 percent, the team-by-team cap is $104 million, which is right in the middle of the ballpark that we've been hearing for much of the week as to what the new salary cap will be if/when a new agreement is reached.

 

Which tells us that the NFL already has resigned itself to going to 58 percent.

 

Which tells us that the NFLPA likely would drop to 58 percent.

 

Which tells us that, as we've believed all week, it all comes down to whether the owners can get their act together on revenue sharing or, as we now understand the operative term to be, "cost transfer."

 

DRAFT THE NEXT THING TO GET SCREWED UP

 

While all of the focus of the potential CBA fallout has been on its effects as to free agency, the next nightmare looming on the horizon is the draft.

 

Even for teams with plenty of salary cap room, contracts for draft picks (specifically in the first round) will present a unique set of challenges.  The devices that have been used of late to help funnel more money to high-end rookies without running afoul of the rookie pool and the salary cap won't necessarily work. 

 

For example, we've heard that one team has determined that the first year of the rookie contract signed by receiver Braylon Edwards, the third pick in the 2005 draft, would consume more than $9 million in cap space if done in 2006.

 

As a result of the challenges relating to signing first-rounders in 2006, some league insiders believe that all players drafted in rounds two through six could receive the one-year minimum tender on a take-it-or-leave-it basis.

 

This would trigger unprecedented holdouts, and some players likely would opt to sit out 2006 and re-enter the draft in 2007, which either will have a new CBA in place or will be completely uncapped.

 

So for any player who passed on the draft in 2005 (we're thinking of you, Matt) or who decided not to wait until 2007 (we're thinking of you, Vince), that sinking feeling in your stomach right about now has nothing to do with that hunk of expired cheese you ate this afternoon.

 

REVERSAL OF THURSDAY CUTS LEGIT?

 

One issue that remains extremely unclear in the wake of the recent news that all Thursday cuts were undone with a finger snap and nose wiggle from the Commish is the question of whether the cuts are undone as to any player who doesn't want them to be.

 

Let's say, for example, that a deal on a new CBA gets done on Saturday.  Under those circumstances, some of the players who were cut might not be re-cut.

 

But what if any of them wanted out?

 

It could spawn a handful of grievances from guys who decide that they want out in order to hit the market under the inflated salary cap numbers.

 

POSTED 9:04 p.m. EST, March 2, 2006

 

EXTENSION A CLEAR REASON FOR OPTIMISM

 

When we first heard that the deadline for the commencement of the 2006 league year had been moved from midnight Thursday to midnight Sunday, we initially thought that it was a sign that the league was trying to provide the teams with more time to restructure deals and identify cap casualties.  Though the move required the agreement of the NFLPA, which could have squeezed the NFL's chestnuts by refusing to consent, we concluded that the NFLPA realized it would be wise to help the 32 teams figure out ways to keep as many dues-paying players as possible gainfully employed.

 

We've now learned that, at last Wednesday's meeting with a hand-picked group of agents, NFLPA executive director Gene Upshaw insisted (and reiterated) that he would not under any circumstance agree to a postponement of the start of the league year.

 

This tells us that the extension likely resulted from optimism on the part of Upshaw that the CBA can get done.

 

Alternatively, there's still a chance that Upshaw agreed in order to give his growing throng of critics within the rank-and-file less ammunition to attack him, if the talks ultimately fail.  There has been plenty of criticism of Upshaw over the past few days for failing to keep the players informed, and for demanding revenue sharing to be part of the deal where the players generally don't care how the owners cut up their millions.  With more and more people motivated to complain about Upshaw, a decision to put teams in a position where they wouldn't have enough time to restructure contracts for guys who'd like to stay possibly would amount to flirtation with termination.

 

Our guess, however, is that the move means a deal on the CBA could still get done.  Upshaw has yet to show that he cares about the carpings of the players -- we doubt that he agreed to bump the deadline in order to engender a little goodwill with them now.

 

POSTED 8:38 p.m. EST, March 2, 2006

 

IF NO DEAL SOON, NO DEAL EVER

 

Okay, we're encouraged significantly by the three-day extension of the start of the league year.  (Of course, we were encouraged significantly by the progress that reportedly was being made earlier in the week, and look at where that got us.)

 

But here's the reality.  If a new deal doesn't get done soon and the league enters the 2006 year under the current deal, the stage likely will be set for a work stoppage in 2008.

 

Indeed, one league source with his finger on the pulse of the ongoing discussions tells us that, once the league years starts, the window for extending the CBA will be two months, max.  Beyond that, an extension to the labor agreement will be virtually impossible.

 

Here's why.  Plenty of teams will be cutting loads of veterans in order to get under the $94.53 million salary cap for 2006.  Those teams likewise won't have the money to spend on free agents.  Also, the quirky rules of the last capped year will make it harder for teams with cap room in 2006 to do big-money deals that won't compromise their ability to otherwise field a team.

 

This will, in our opinion, result in an unprecedented number of players taking low-money deals, many of which likely will be one-year contracts for the league minimum.  And that will increase the likelihood of an uncapped year. 

 

Think about it.  Plenty of players already believe (mistakenly) that the uncapped year will entail far more money than it really will.  Plenty of other players will be looking to make back some of that money that they lost out on in 2006.

 

So if the players push for the uncapped year and the uncapped year hits, teams like the Redskins will dump millions into free-agent contracts for 2007 and beyond.  This will, as a practical matter, make it virtually impossible to resurrect the salary cap beyond 2008, making it even harder to reach a new CBA, making a work stoppage more likely.

 

There has been some talk of possibly trying to undo any free-agent deals signed under the current CBA if there's ultimately an extension, but such an approach could cause all sorts of logistical -- and possibly legal -- problems.  The more realistic scenario is that, if a deal is eventually done, the guys who signed contracts negotiated under the rules of the last capped year will be stuck with the terms of those deals. 

 

Another possibility could be for agents to insert clauses into the contracts negotiated under the current CBA calling for new terms to kick in if the CBA is extended and the salary cap is increased.  We have no idea whether such an approach would be approved, but if we were representing a guy who was going to hit the market on Monday, we'd sure as hell be exploring it now.

 

THREE-YEAR GUYS FACING BIG LOSSES

 

Assuming that the NFL and the NFLPA can't work out a new CBA, one of the groups of guys who stand to lose the most are players who are hitting the market as restricted free agents, and who would be tendered at the low end of the spectrum (i.e., $712,000 on a one-year deal).

 

Plenty of those guys haven't received a tender, relegating them (at best) to a one-year, $460,000 deal, if the CBA isn't extended.

 

The difference?  $252,000, or more than half of what the player will earn under a one-year deal.

 

POSTED 6:30 p.m. EST, March 2, 2006

 

NFL'S CURRENT OFFER WORTH NEARLY $27 BILLION

 

As the league and the players' union attempt to utilize the next 72 hours in order to work out an impasse that translates to 3.8 percentage points of the NFL total football revenue, a league source has given us some specific information regarding the magnitude of the deal that's on the table.

 

Under the league's offer, a minimum of $22.2 billion would be paid to players in the form of salary from 2006 through 2011, and more than $4 billion would be devoted to benefit plans.

 

This translates to a minimum salary cap in 2011 of a whopping $134 million.  Minimum.

 

Under the league's offer, the benefit money would increase from $16.5 million per team in 2005 to $29.2 million per team in 2011.

 

That, my friends, is a crapload of dinero. 

 

Sure, the NFLPA wants to push those numbers even higher.  But breaking it down per player and per year, our guess is that the numbers really aren't that much different.

 

With the union demanding 60 percent of all football revenue and the NFL at 56.2 percent, the positions cry out for a resolution in the range of 58 percent.  Under this deal, everyone would continue to make a lot of money.

 

Without this deal, the NFL would still be a money-making proposition, but the party would be over and the door will be open for the other pro sports leagues to regain some of the luster that they've lost as the NFL has become the best diversion on the planet.

 

POSTED 6:18 p.m. EST, March 2, 2006

 

THURSDAY CUTS UNDONE

 

Chris Mortensen of ESPN reports that, due to the three-day extension to the deadline for getting under the 2006 salary cap, the NFL has undone any cuts that were made by teams on Thursday.

 

This applies, for example, to four veterans released on Thursday by the Chiefs, including corners Eric Warfield and Dexter McCleon and linebackers Shawn Barber and Gary Stills.

 

As to players cut on Wednesday, they remain cut and are free to sign with any other team.

 

POSTED 5:00 p.m. EST; LAST UPDATED 5:44 p.m. EST, March 2, 2006

 

NFL EXTENDS START OF LEAGUE YEAR

 

A league source tells us that the NFL and the NFLPA have agreed to extend by 72 hours the launch of the 2006 league year.

 

Per the source, the year will begin at 12:01 a.m. Monday morning, and not at 12:01 a.m. on Friday morning. 

 

Per published reports, the deadline for getting under the 2006 salary cap is extended from 10:00 p.m. Thursday night to 6:00 p.m. Sunday night. 

 

It suggests that maybe, just maybe, there will be progress toward getting the CBA extended.  As one league source has explained, however, the more likely explanation is that the league has opted to give the teams more time to sift through their player contracts in decided where to make cuts in order to get under the cap.

 

Stay tuned.

 

 

POSTED 3:51 p.m. EST, March 2, 2006

 

TAGS SHOULD WALK AWAY

 

The 32 owners made the trek to the league office on Thursday for a relatively brief meeting that resulted in (drum roll, please) no new news at all.

 

The development makes us wonder, with even greater consternation, what in the hell is going on.  Why drag the guys who sign the checks to New York for a meeting of less than an hour to decide to reject the NFLPA's supposed demand of 60 percent of total football revenues when that position already has been rejected?

 

We're convinced that Thursday's goal was to give the Commissioner, Paul Tagliabue, a chance to plead with the owners in an effort to work out the revenue sharing issue conundrum.  And it didn't work.

 

Why not?  As we argued on Wednesday, Tags needs to get this done in order to preserve his legacy.  But as an industry source astutely pointed out to us on Wednesday night, the owners don't give a used set of silk sheets about Tagliabue's legacy. 

 

He's a short-timer.  His influence is diminishing.

 

In the end, his best play might be to walk away sooner rather than later, and to hand the reins to his successor.  The owners, of course, won't want him to do that, since they've already got their hands full with the CBA and revenue sharing. 

 

But if they're not going to listen to him at a time when they've all got a lot to lose, what's the point in continuing to talk?

 

POSTED 7:00 a.m. EST, March 2, 2006

 

YOUNG'S AGENT KNEW ABOUT WONDERLIC

 

A league source tells us that agent Major Adams had been specifically advised that he needed to get Texas quarterback Vince Young ready to take the Wonderlic test at the scouting combine in Indy, and that Adams shrugged off the idea

 

Per the source, Adams received the suggestion from an agent who is working with him on a behind-the-scenes basis.  The agent, who is not Bus Cook or any other seasoned, experienced quarterback handler, supposedly offered Adams sample copies of the Wonderlic test for Young's use.

 

It has been reported elsewhere that Young had no idea he'd be taking the Wonderlic test, a 50-question general intelligence exam that all incoming NFL players complete.  Though many league insiders don't believe that Young is as slow as the reported score of six would suggest (he got a 16 when he took it again the next day), the bigger concern that some have relates to his decision-making in selecting an agent.

 

We're also told that Adams has had ample opportunities to associate with more experienced agents on Young, and that Adams consistently has refused to do so.

 

The thinking in some circles is that, absent the involvement of an agent with experience getting elite players ready for the draft, problems will continue to arise.

 

Don't count on a change happening.  While Young's mom (we hear) wanted to hire Bus Cook, the bulk of the family pushed for Adams, who has been in the picture since Vince was in high school.  Young, we're told, was overpowered by his family when the time came to make a choice.

 

WORK STOPPAGE COULD MEAN BONUS RECOVERY

 

On Wednesday night, we tried to put in proper perspective the realities of an uncapped year under the current CBA.  As we explained, it won't quite be the bonanza that many players presume.

 

Here's another thing to keep in mind.  If there's a work stoppage in 2008, players with language in their contracts requiring bonus payments to be refunded in the event of a default could be forced to pay back the money.

 

The theory potentially applies regardless of whether there's a strike called by players or a lockout imposed by management. 

 

The bonus money can be protected, however, if the default provision contains language specifically stating that the duty to repay doesn't apply in the event of a work stoppage. 

 

(Memo to agents:  It might be a good idea to put that language in any contracts signed moving forward.)

 

So if there's a lockout or a strike in 2008, there could be a massive wave of grievances filed by teams in an effort to recover bonus money from the many players with default language in their contracts.

 

Hey, at least we'll have something to cover in the event there's no football.

 

COLTS SCREWED BY SPECIAL MASTER RULING

 

We mentioned on Wednesday afternoon that a Special Master has issued a ruling that puts the Colts in a salary cap predicament by invalidating some of their cap management tools.  The Indianapolis Star supplies the details, reporting that the ruling specifically related to the contracts of quarterback Peyton Manning and receiver Marvin Harrison.

 

The Star also reports that the decision could result in "several significant player cuts" by the Colts on Thursday, if the CBA is not extended.

 

"They're in a tough spot," NFLPA director of salary cap and agent administration Mark Levin said.

 

The specific issue relates to a $9 million roster bonus owed to Manning and a $10 million roster bonus due to Harrison.  The team intended to convert the roster boni to guaranteed payments, spreading the cap hit over the next four years.  By our calculations, the move would have freed up $6.75 million in cap room under Manning's deal, and $7.5 million under Harrison's deal.

 

Stephen Burbank, the guy who handles matters of CBA interpretation for the league and the union, ruled that such conversions are prohibited if they trigger a violation of the 30 percent rule.  So in Manning's case, the conversion of the $9 million roster bonus to a guaranteed payment reduces his 2006 salary basis by $9 million -- which means that he can receive $11.7 million less in 2007 salary than he otherwise would be eligible to make. 

 

As to the other ruling we mentioned on Wednesday (i.e., that option bonus payments are not part of salary for the purposes of the 30 percent rule) we've heard from several league insiders who pointed to language in the CBA that arguably contradicts the ruling.  For now, all we can say is that the info we posted on Wednesday is the info that was being passed around by various league insiders. 

 

On one hand, it's possible that they had the facts off a bit, given all of the other issues that teams currently are dealing with as the deadline for getting under the cap approaches.  On the other hand, we don't see any difference between option bonuses that are spread over time and roster bonuses that are converted at the team's option into a guaranteed payment, and spread over time.  Both forms of compensation start out as non-guaranteed money.  Either both should count toward the 30 percent rule, or both shouldn't.

 

Bottom line -- add the Colts to the list of teams who suddenly are screwed if the CBA doesn't get done.

 

WHAT IF A TEAM IS OVER THE CAP?

 

A league insider raised an interesting point with us on Wednesday.  If a team like the Redskins ends up over the salary cap on Friday, what's the worst that can happen?

 

The league can't force the 'Skins to cut players.  Instead, the league can impose fines and/or strip the team of draft picks.  But if, as in Washington's case, the owner is raking in millions in local unshared revenue (and thus can pay any fine with his "walkin' around" money) and if, as in Washington's case, they won't have the cap room to sign the rookies they draft, what's the downside to writing an easily affordable check and/or giving up their entire 2006 draft class?

 

From the Redskins' perspective, it becomes a basic business decision.  Either they cut everyonethey need to cut to get under the salary cap -- or they keep one or two guys we want to keep and face the potential consequences from the league office.

 

Given that Redskins owner Dan Snyder is one of the guys pushing hardest against expanded revenue sharing (thereby making it harder to extend the CBA), our guess is that the Commish would smack the team extra hard if 'Skins don't accept the cap consequences of a failure to strike a deal that can be blamed in part on the position that Snyder has taken regarding revenue sharing.

 

GANG OF NINE DRIVEN BY FIVE

 

An industry source has explained to us that, despite reports of nine teams who are adamantly opposed to expanded revenue sharing, five guys are driving the bus.

 

They are, we're told, Jerry Jones of the Cowboys, Dan Snyder of the Redskins, Malcolm Glazer of the Buccaneers, Joe Banner of the Eagles, and Jonathan Kraft of the Patriots.

 

The Bucs previously had not been pegged as one of the teams fighting against expanded revenue sharing. 

 

With five of 32 teams pushing hard against a move to divide local revenues that currently aren't shared, it means that 27 teams could vote for it on Thursday.  With only 24 votes necessary to impose the will of the most on the all, it's still possible that Commisioner Paul Tagliabue can work out a plan on Thursday morning for the ultra-rich to share some of their booty with the mere super-rich.

 

EAGLES SHOPPING THOMAS

 

A league source tells us that the Philadelphia Eagles are looking to trade defensive tackle Hollis Thomas.

 

Thomas signed with the Eagles as an undrafted free agent in 1996, and has been with the team ever since.

 

We haven't heard what the Eagles are looking for in exchange, but at a time when teams are playing the home version of salary cap limbo, our guess is that the Eagles will have a hard time moving him.