With the new CBA proposal fact sheet being released by the NFLPA yesterday I just wanted to share some initial thoughts on some of the things outlined in the sheet. It’s pretty limited in detail but since everyone is talking about it I thought it made sense for us to put something out about it sine we have written about the CBA before. So let’s look at some of the areas we can discuss and call it a good, bad or indifferent initial reaction.
- Good: 47% of AR in 2020 plus $100M in new player costs for 2020
This essentially sounds like a raise for the season and there is little wrong with that. Any kicker over the current levels in 2020 is a good thing since there is really no alternative way to earn more this year. Its not a big raise but its not as if revenues were going up this year anyay.
- Indifferent: Projected increase of $5 billion to players over a 10 year period
This to me sounds better on paper because the NFL wisely is using big money numbers ($5 billion!) to make their case. If we break that down into a 10 year period its $500 million per year. If we go a step further that’s an additional $15.625 million per team. If we go one step further that works out to about an added $245K per player (the NFL will employ around 2000 players during the season). I would think this is something phased in over time so it would be less now (i.e. $100M in new player costs for 2020 is much less than $500M), but effectively the cost for the 17th game is $245K per player. That does not sound nearly as impressive when stated that way versus $5 billion. Not all of this goes towards the salary cap but for the sake of argument lets say it does. There will be minimum salary increases for the players (more on that later) and I believe over the 10 year period we would be looking at an average increase of $43K per year give or take a bit. Last year about 58% of the league played on a minimum P5 so it should mean about $1.55 million of the added salary will go to the low level players per year and the vets should get about $550K extra a year for the added work. Neither of those figures are great but I wouldn’t say its terrible. However it does not seem like it would lead to an explosion of contract values which is probably what the $5 billion is supposed to make you think.
- Good: Minimum Salary Increases
This is a great one for the players. Salaries have lagged badly in the current CBA because its 10 years and the NFL was able to stick with just $15K raises per year. From whats written this will fall in line for the rookies with what we proposed last April and while it may lag for the others this is a big step forward as is increases by what sounds like $45K per year rather than $15K per year the salaries bump now. This may not get the attention it deserves and obviously there are details missing about what the ultimate difference is from year 1 to 2 to 3 (its at $90K now for most rookie years and Im just assuming something similar) but the arly jumps and bigger yearly raises sound like a nice get for the NFLPA.
- Indifferent: Bonus payment of up to $250K for players playing 17 games
This impacts a very small percentage of veterans (about 200 in 2021 and 125 in 2022) most of whom will either be released or extended before the 17 game cycle even hits. Could they have done better for the players currently under contract? Yes. Does it impact so many players that it should have been a sticking point? Probably not.
- Bad: 90% minimum team spending
This is just a useless one. Teams are already spending on average over 100% of the cap and no team has been under 90% in any four year window. All this does is allow some teams to tank for a period of years if they feel like it. That isn’t good for the players or the NFL. If you are not getting a big revenue increase you have to do what you can to force teams to pay more. This doesn’t do it at all. It’s a joke.
- Indifferent: Increase in RFA tenders
We’ll need more information on this but this sounds like a small gain just for this year. Id say this is neither good nor bad and again impacts a small portion of the NFL population
- Indifferent: Minimum team spending timeframe change
The NFL is changing the spending timeframe from 4 to 3 years for the first 6 years of the CBA. This will not fundamentally change anything in the NFL. The final four years would all be tied together which is a bit of a power play, IMO, to make sure the teams have far more financial flexibility at the end of the next CBA. This may actually lean towards bad more than indifferent.
- Indifferent: 5th year options fully guaranteed, amount tied to performance
We don’t know enough about this to really say much but fully guaranteeing the 5th year option will not impact too many players. For the most part costs are low enough on those options that teams buy into them no matter what. The players I can recall who have been released off the 5th year option before it vested are Robert Griffin, Eric Ebron, Vernon Hargreaves, and Kevin Johnson. Michael Floyd was cut after it vested. Phil Taylor was also cut after it vested though there were some oddball circumstances there. So fundamentally the guarantee will not change any decision making.
However we do not have enough info on what the raises will be and how they will be accomplished. In the old CBA there were massive escalators at the end of contracts often tied the franchise tag or a higher number. If those are possible to achieve then there could be a benefit to it. That’s why Ill say indifferent here rather than bad. We just need more info to make a judgement,
- Good: PPE for 2nd round picks plus a Super Escalator.
Weve talked about this a lot before. 2nd rounders can get hurt by not being able to earn a pay raise while draft picks being locked into the low tender make being a UDFA potentially more appealing. My guess is this will fix this in a more equitable manner.
- Indifferent: Injury protection to $2M for one year and $1M for 2nd year
This is a minor increase over the current amounts and not really much in the way of protection. We had suggested a $3M and $1.5M increase. There is no reason why they should not have gotten that.
- Bad: Nothing stated about shorter rookie contracts
The biggest hold on wages in the NFL is the length of rookie deals. There are a number of players who don’t have the greatest careers whose value peaks in year 3 and 4 of their career but they are locked in at the minimums. By the time they hit free agency they are either looked at as minimum salary players or slightly above that level. If those players had the ability to become a free agent in the third year of their career they would likely lock down more money for their short careers.
- Bad: Revenue Split at 48.5%
Like we said above the $5 billion sounds great but on a year by year basis its not a ton for that extra game. There is really no reason for this to not be a 50/50 partnership at this stage especially with the NFL franchise valuations, which have zero to do with player shares but do impact an owners wealth, generally skyrocketing.
- Bad: Another 10 year deal
Why lock in for this long again? There are so many changes that happen in that time and you are insulating yourself from getting to negotiate on those issues. By the time 10 years rolls around almost all the players involved with this negotiation will be gone so there is little experience on the player end at that point in doing a deal and making sure the same mistakes are not made. No reason for more than 5.
Do I think this will be passed by the union? Probably. The benefits are there for the majority of the players and just from that perspective they will vote for it. It’s not a good deal for veteran players (or those who will make it to veteran status) because it likely caps off the growth in a similar manner as to what we see now where top line wages are barely keeping up with growth in the cap and teams have the ability to cut players pretty easily without worrying about cap ramifications. If the veterans are strongly against this then they need to communicate those concerns to the young players in a manner they can understand, especially the young players who are in line to be stars.
Ive seen some comments that this is a horrible deal. We don’t have a ton of details here but I would not agree with that. The 2011 deal was terrible. The player side took about 4 steps backwards with that deal. Here they are probably taking one and a half steps forward even if they are giving the NFL the rights to that 17th game back. Its not a good one but at least its not a step in the wrong direction one that hurt the players for 9 years. This at least corrects some of that.
The NFL has reportedly put a hard deadline on this proposal. I can understand that because the combine starts in a few days and teams need to know the rules by then to start negotiating with players. My guess is if its delayed they will have to play 2020 under the current rules and while some may say they can always delay the start of the league year really its not fair given what some teams are going to have to do with their cap and free agent decisions between now and then to work under one set of rules and then have the rug pulled at the last minute.
Still the union side should have known this was going to be a realistic deadline and done more to pull their guys together rather than a phone conference today. There is not much detail in the proposal sheet for someone to go over and players should have their agents/lawyers/ etc… looking over the actual proposed changes rather than bullet points. And maybe there will be firm direction given in that meeting that does just that but from what Ive heard most of the discussion has revolved around bullet points and the 30,000 foot overview rather than the actual details of things. There should be time taken on their end to let the players do their due diligence and form their own educated opinions on this. Im not sure if four days is enough for that.
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.