The proposed CBA came out today and I just wanted to share a
few thoughts on the brief look I had at it since we should know within a week
if it is ratified or not. For the most part this CBA reads very much like an
extension of the current agreement with some minor tweaks and Im sure some
added things related to player safety and data controls (these are the type of
things that we may touch on in a book but I’m more into the salary aspect of
these things). There were two things that I wanted to talk about a bit- the new
rookie option and the proposed revenue split.
One of the bigger changes deals with the 5th year
rookie option and to a lesser extend the
proven performance escalator. Depending on where you are drafted these can be
looked at as a win or a loss. Let’s start with the option year.
In the current CBA the option was either based on the NFL transition
tag if you were drafted in the top 10 and then the 3rd through 25th
contracts if you were outside of it. They did fix this to some extent such that
every first round pick is treated the same. There are four levels that you can
earn in the new CBA. The levels of pay are the 3rd through 25th
average contract, 3rd through 20th average contract,
transition tag (top 10), and franchise tag (top 5 contracts). The first one is
the default while the others are based on playtime and pro bowl selections. Essentially
to move up to the transition tag level you need one Pro Bowl in three years and
two Pro Bowls in three years to land the franchise tag.
The Pro Bowl is essentially a popularity contest and is
generally biased against good players on bad teams. Its easier if you play a
skill position or are a pass rusher where you put up more overt stats but can
be difficult as a young player to somehow get one let alone two Pro Bowls. A QB
who sits his rookie year is really behind the eight ball.
Surprisingly they did not have an alternate possibility for
All Pro inclusions, which are very difficult and can also be a popularity
contest of sorts but can cover some players who fall through the public voting
cracks. Nor did they have a high end playtime incentive. These could have been just
another path besides the Pro Bowl.
For the lower part of the draft it’s a no harm no foul rule.
They cant be hurt even if its difficult to gain from it. For the top though
they may lose out. Players who get no Pro Bowl nods early will go from being a
transition tag option to a 3rd through 20th option. That
is going to be much lower and lead to more players potentially being locked
into bad rookie deals. Will it impact a lot of players? Probably not but its always best to cover all
bases. As a side note I do think the potential of the higher end escalator may
knock more running backs out of the first round but that’s not really a CBA
issue.
The PPE is essentially similar with everything tied to Pro Bowls
if you want to hit the higher PPE thresholds. In a sense its better than
nothing since the last one had no way to escalate beyond the lowest tender
based on playing time.
When it comes to the revenue split I am just still surprised
that this is all the players got for a 17th game. The league
basically moved from 46% of revenue to 48% of revenue in exchange for a 17th
game. One of the neat things in this CBA is they do give us a number of $7.357
billion a year that is essentially the baseline for the television money the
NFL brings in. While technically the split on media is higher than 46% (its 55%
toward the calculation that floors out at 46% in the old CBA) I think it’s fair
to use that number to determine what the players currently receive on a per
game basis from the CBA.
If the players receive 46% of this figure they are receiving
$3,384,220,000 of the TV money. That works out to $105,756,875 per team for the
season. That payment for 16 games works out to be $6,609,804 per game.
If you run the calculations for 48% we get to $3,531,360,000
for the players of which $110,355,000 goes to each team. Those are both bigger
numbers but now we are dividing that by 17 rather than 16. That works out to
$6,491,471 per game or about $118,000 less per game than they pay in the
current agreement. To balance out the NFL would have had to raise the revenue
split to 48.9%.
Of course that’s not the entirely proper way to look at it.
17 games will bring in more revenue and the break even point there would require
the media number to increase by a bit more than 2% over the 16 game schedule. That’s
likely in the ballpark of $150M a year and they should surpass that easily. If
the numbers worked out to something like a 30% increase in media rights on 17
games vs a 20% increase for 16 games that’s around an extra $140K per player
for that added game. For a minimum salary player that is a lot. For a potential
higher earner its not worth it at all.
In any event the ability to earn more based on the 17th
game is strictly based on what type of raise the NFL can negotiate for that one
extra game. If the disparity is not that large the players will likely not see
the added increase that pushes contracts into a higher salary level. However if
we use $2M a year as our cutoff for yes
or no on a vote its basically 65/35 for and that is probably why this will
pass.
Jason is the founder of OTC and has been studying NFL contracts and the salary cap for over 15 years. Jason has co-authored two books about the NFL, Crunching Numbers and the Drafting Stage, which are widely circulated in the industry and hosts the OTC Podcast. Jason’s work has been featured in various publications including the Sporting News, Sports Illustrated, NFL Network and more. OTC is widely considered the leading authority on contract matters in the NFL.
