Acme Packing Company
NFL owners probably do no like the Philadelphia Eagles’ financial strategy
Mike Florio of Pro Football Talk wrote an article about NFL commissioner Roger Goodell’s recent comments, which, among other things, include that team owners believe they should be receiving a bigger share of the financial pie. Rich people want more money. Big woop, right?
Well, also included in the article was a quote from Goodell saying that the league is looking into “the integrity” of the “cap system itself,” which could be a bigger piece of news than the percentage point of money that NFL players will receive from the league’s television contracts.
“There are no formal plans on any discussions,” Goodell told reporters. “We obviously continue to be in close communication with the union on a variety of matters, but no start of negotiations have been set or are under consideration really at this point. We did spend time today talking, at length, about areas of our Collective Bargaining Agreement that we want to focus on. The two areas that we spent time on were really the cap system itself, the integrity of that system, how’s it working, where do we need to address that in the context of collective bargaining, when that does happen. That was a very lengthy discussion.”
At this point, you might be wondering, “What integrity issues does the NFL salary cap have? It’s a hard cap.” And while that is true, the manipulation of the salary cap, via salary-to-bonus conversions, has been on the rise since the league’s salary cap ceiling initially dropped in 2020 to combat the loss of money that went hand-in-hand with the Covid season.
Prior to that year, it was extremely rare for teams to turn salaries into bonuses because of the amount of dead cap they created in future years. The only exceptions before 2020 were really the New England Patriots and New Orleans Saints, the two teams that decided to go “all-in” with aging quarterbacks in Tom Brady and Drew Brees. Since the Covid year forced teams to learn how to manipulate the salary cap, though, the disparity between cash spending among NFL teams has been on the rise across the board.
For example, if I were a general manager and wanted to pay a player a one-year, $50 million contract in 2025, I could pay him that $50 million in salary — game checks — and simply pay all of that $50 million on the cap in 2025. If I wanted to manipulate that number to its extreme though, I could pay the difference between his $50 million salary and the league minimum salary, which maxes out around $1.3 million for a veteran who is at least seven seasons into his NFL career, and convert the rest of that money into a signing bonus with four “void years” attached to the end of his one-year deal to impact the salary cap as little as possible in the short term. Using that second method, the bonus...
