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Oct 02

Thoughts on Trading in the NFL

Apparently the NFL is slowly turning into MLB with all the trade activity of the past few weeks. Trades, with the exception of draft day trading, have always been pretty rare in the NFL. In season trades for starters were almost unheard of due to the difficulties in sometimes fitting new players into a system, but the times are changing.

It began with the big trade of Trent Richardson from the Cleveland Browns to the Indianapolis Colts which was followed up by back to back moves that brought starting Left Tackles to  the Pittsburgh Steelers and Baltimore Ravens. There are plenty of more rumored trades on the horizon and with weeks to go until the trading deadline maybe some more materialize. So why the seeming increase in trade activity?  Let’s look at some of the reasons.

The 2011 CBA plays two major roles in facilitating trades.  The first is the rookie wage scale which applies to Richardson and should play more of a role in future years. I touched on this when looking at the Richardson trade, but essentially the new CBA has eliminated the use of the option bonus and not likely to be earned incentives and escalators from all rookie contracts. While the trade of Richardson was certainly expensive in cap dollars for Cleveland it was a few million less than it would have been in the old CBA. For the acquiring team they only take on reasonable base salaries rather than highly escalated salaries of the old style rookie contracts, giving them reason to  take a chance on what seems to be an underperforming player. I’d expect to see more trades of high draft picks like this in the future.

Perhaps the biggest reason lies in the changing of the spending requirements of the CBA. Under the old CBA team spending was tied to salary cap dollars. Teams were required to spend around 90% of the unadjusted salary cap number. That, in turn, led to less carryover for each NFL team and the utilization of a good chunk of cap space by the time the season began. Trading away a piece that saves you a few million dollars likely meant that you would need to find a way to re-spend those cap dollars to be compliant with the salary cap limits by the end of the season, making you think twice about such a move.

The way that the salary cap is structured for most teams now makes it easier to make these moves. There are no salary cap minimums and the cash minimums are maintained over 4 year periods. You no longer have to sink money into players you do not want in a given year. Now teams can just perform a salary dump while they prepare to rebuild. Huge carryovers give teams added cap space to absorb large accelerated charges with minimal problems and may give teams more room to absorb new players. While the latter was not the case with the Steelers and Ravens, in the future my guess is teams with cap space to spare will be making these trades, and some of those teams would not have existed before 2011.

I tend to think the trades also show the more progressive movements and general youth in the front offices. I certainly think there was a time when the NFL front office looked at everyone not in the NFL as a complete outsider to the NFL system. What they did or suggested would never work because they have never been on a sideline or in a huddle. Much of the league has moved away from that. Many GM’s in the NFL come from financial management backgrounds much moreso than football backgrounds. They have a much different approach to managing contracts and the risk management associated with cap structure than before.

In my years of primarily following the Jets salary cap I used to note how the team was using guaranteed salary in lieu of large signing bonuses to get players under contract. They were not the only  team doing this by any means, but it was a very different approach  than the traditional “give a star a monster bonus” approach that was used for many years. Teams like Tampa Bay have taken it a step further and eliminated signing bonuses entirely. While these contracts can be a problem if the players fail to perform they are all very open ended for trade possibilities. The dead money of the trade in these scenarios is limited giving teams every opportunity to move a player. While it has not happened yet, I would imagine it is something that may happen more in the future. It’s an example of the league moving forward.

We see more openness in the NFL now than ever before. The opinions of those in the media or sitting in the seats maybe has some merit to it. Teams are embracing statistical analysis and “outside the NFL” evaluations and thoughts. That would have been unheard of 15 years ago.  Teams are starting in analytical departments, giving credence to various people who don’t work in the NFL but immerse themselves in a facet of the NFL such as statistics. That type of change also means more outside the box thinking that sees the regularity of trades in the NBA and MLB and begins to think “why not” the NFL.  I mean if you can sign a player off the street in September and get him up to speed why not simply execute a trade?  It’s just a matter of making the financials work and teams are getting more advanced with that every year.

Now for all I know this will be the end of the trades for this season in the NFL, but I think we are beginning to see the  start of a new direction in the NFL, one that is open to trades and constructing contracts to facilitate them.

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