Nevertheless, the NFL will be getting back to business in the coming days largely because they don't want to miss out on the $800 million in revenue that the preseason provides.
And based on the reports we've been hearing about what the new CBA will look like, 2 crucial elements will be a rookie wage scale and payroll floors.
As reported by ESPN, the rookie wage scale is likely to contain these components:
- Five-year contracts, with a team option for the fifth year.
- If the team option is exercised, in the fifth year the top 10 picks would receive a salary equal to the average of the top 10 player salaries at their respective positions. That money would be guaranteed if the option is exercised after the third year of the contract.
- If the team option is exercised, in the fifth year picks 11-32 would receive a salary equal to the average of the Nos. 3-25 salaries at their respective positions. That money would be guaranteed if the option is exercised after the third year of the contract.
And the biggest change will be the amount of guaranteed money first-round draft picks can earn, which will likely be cut by roughly 50%. That amounts to about $275 M. If you don't think that's a big deal monetarily, think again.
A review of this site shows that NFL teams jointly paid approximately $550 M in 2010 in guaranteed money for first-round draft picks. According to our previous calculations, it would take all the revenue from nearly 3 weeks of preseason football to finance those payments.
That's a huge gamble for team executives to incur and a king's ransom for players to receive who ultimately may never pan out. Sam Bradford of the St Louis Rams and Ndamukong Suh of the Detroit Lions alone received $50 M and $40 M in guaranteed money in 2010 as the top 2 picks. That was nearly 1/6th of the entire pool of guaranteed money that went to first-round picks! Thankfully for those teams, those investments will likely pay off in the long run based on early returns.
But the new system makes rookies earn their keep (as they should), and means a lot less Alka-Seltzer for executives who in the past risked their careers by investing millions in eventual flops.
Any system that invokes significant revenue sharing needs to also impose "payroll floors" to ensure that lower-revenue teams are investing "shared money" back into their team rather than pocketing the money. From a fairness perspective, every professional sports league with significant revenue sharing should have payroll floors.
Do you hear me, Major League Baseball?
The 2009 NFL cap was at $123 million and 2010 was an uncapped season leading up to these labor negotiations. According to John Clayton of ESPN, not only will the new CBA re-institute a cap at around $120 million (actually at $141 M, but $21 M is allocated strictly for benefits), but it will presumably force teams to put up more than 90 percent of the salary cap in cash each season. That would mean $108 M for the 2011 season.
Based on this list of team payrolls at the beginning of the 2010 season, looks like Tampa Bay, Kansas City, Jacksonville, and Arizona have some spending to incur in the next few weeks.
Will they spend wisely remains to be seen.
Are you ready for some football...transactions?
You better be...because the next 2 weeks is going to feel like pro football's version of The Fast and Furious franchise.
Except instead of Vin Diesel, Paul Walker, and a bevy of babes, it will be Logan Mankins, Vincent Jackson, and a bevy of brutes getting ready to give American sports fans what they can't seem to live without.
And with rookie wage scales and payroll floors in place, the system in place governing the chase for Super Bowl glory is much more efficiency and equitable than in recent memory.
Dr. Patrick Rishe is an Associate Professor of Economics at the Walker School of Business at Webster University in St Louis, as well as Director of Sportsimpacts.
Follow Patrick on Twitter @SportsDocRock or visit www.patrickrishe.net