NFL’s Salary Cap Could Mean Pay Cuts--or Getting Cut : Pro football: Teams start shopping for free agents, but payrolls will be restricted as of March 1.
Pro football’s version of the Hot Stove League begins today--but with a hitch.
Twenty-eight NFL teams go shopping as the free-agency period opens. For the first time, however, they do so facing a salary cap.
A $33.8-million cap kicks in March 1, and teams will be scurrying in the next few weeks to fill out rosters without breaking the bank.
Player contracts expired Thursday, and more than 400 free agents are on the market.
For the best players, the cap will mean big bucks; teams are expected to move quickly and build a foundation under the new restrictions.
But for some players, free agents or not, the salary cap will mean pay cuts . . . or getting cut.
So the next three weeks might be as important as any time NFL fans spend watching games next season. How good their team will play in January could depend on how handy a general manager is with his calculator now.
With apologies to David Letterman, the top 10 list of what every NFL fan should know about the salary cap, and how it will affect what they see on the field:
1. How much is the cap, and why have one?
The salary cap for the 1994 season is roughly $38 million, but once the figure is stripped of player benefits, teams are left with $33,805,000 each to pay players. There’s also a salary minimum of $30 million per team.
The purpose is to put teams on an equal playing field for salaries. In the past, high-revenue teams could outspend others, be more active in the free-agent market and ultimately more competitive.
“Our club is considered a low-revenue club,” said John Shaw, Ram executive vice president and a designer of the cap. “Some teams have $20 million more in revenue than us to spend. We’ve been criticized for not paying players in the past, but we’ve paid a large amount of our revenue to our players.
“With a salary cap, you place restrictions on spending and make the playing field more competitive.”
2. How did the cap come into being?
As a result of the collective bargaining agreement between the league and the NFL Players Assn. It became active for 1994 because teams spent at least 67% of their defined gross revenue in 1993 on player salaries. The cap limits spending to 64% of the NFL’s defined gross revenues, which come mainly from ticket sales and broadcasting rights. It is expected to increase slightly over the next four years, with revenue.
Under the collective bargaining agreement, after four years, the cap can be replaced by a lengthening of the service requirement for unrestricted free agency from four years in the league to six. The trade-off: Restricting player movement for unlimited spending.
3. When does the cap go into effect, and how and when must teams comply?
March 1, with possible adjustments once league officials finish auditing contracts and payrolls. The NFL cap is a 365-day-a-year “hard cap,” meaning teams must maintain salaries of roster players on roster at or below the cap year-round. The NBA’s “soft cap” allows teams to exceed it in the off-season, then trim by a deadline.
4. What if a team doesn’t comply with the cap?
The league hits teams where it hurts the most--in the pocketbook, with fines between $2 million and $2 1/2 million.
5. What money counts toward the salary cap?
The NFL cap counts the top 51 salaries on a team’s roster.
Unrestricted free agents--players with at least four years in the league who are free to sign anywhere--aren’t counted until they are signed.
Salaries of restricted free agents--players with three years’ experience who can be retained if their old club matches an offer sheet--are counted at the tendered amount with the club.
A portion of the $2-million rookie pool is counted toward the cap as each rookie signs. Signing bonuses do apply, pro-rated over the term of the contract.
6. Where did the concept come from?
The NFL cap is modeled somewhat after the NBA’s. In the past, there was no salary cap, but there were restrictions on movement of players. The cap allows fewer restrictions on movement by reducing years of service for free agents: unrestricted to four years of service instead of five, restricted down from four years to three.
7. Which teams are in good shape under the cap? Which are in trouble?
Indianapolis had more than 40 players under contract at $38 million, meaning the Colts have to wipe out more than $6 million in the next few days. They began by waiving nineplayers Thursday.
New England, Phoenix, Seattle and Cincinnati are in good shape. Cincinnati has between $10 million and $12 million to spend, and Seattle has nearly $14 million.
The Rams have 35 players under contract at $21.8 million, excluding seven restricted free agents the club has yet to re-sign. That leaves roughly $8 million to $12 million to spend on free agency.
8. What impact will a cap have on veteran players earning large salaries? Will they fit in?
For the first year, expect big-name players such as Philadelphia linebacker Seth Joyner and Dallas linebacker Ken Norton to hit the jackpot as clubs build under the cap. But down the road, as more and more money gets locked up, it will be harder to bring in higher-priced players.
Other veterans, such as Rams’ wide receiver Henry Ellard and offensive tackle Jackie Slater, will be hit hard. Both are unrestricted free agents and probably will have to take pay cuts to stay.
9. What effect will it have on backup players or younger players who aren’t paid as much?
Rookies and younger players are limited by the rookie pool. But the cap probably will separate the players into two classes--the rich and the poor--and all but eliminate the middle class. Backups and role players who now get paid good money will not only face pay cuts but loss of jobs. If a team wants to sign a big-money player, it could cost three role players.
10. How much tougher will it be to sign players?
According to one league general manager, look for teams to budget money harder by position than ever before. Say a team needs three tackles and has $3 million to spend. Do you go after a player worth $1.5 million a year and two $750,000 players? Or three $1 million players?
Get our high school sports newsletter
Prep Rally is devoted to the SoCal high school sports experience, bringing you scores, stories and a behind-the-scenes look at what makes prep sports so popular.
You may occasionally receive promotional content from the Los Angeles Times.