Questions and answers about the NFL labor talks
Information compiled by ESPN.com senior writers Len Pasquarelli and John Clayton and ESPN researchers Craig Wachs and Russell Baxter.
The sudden change in the climate of labor negotiations between the NFL and the players' association, and the sudden flurry of player cuts, has left many fans with questions. Fortunately, ESPN.com has answers.
What is the primary issue?
The deadline to extend the current collective bargaining agreement (CBA) had been scheduled to expire at 12:01 a.m. Friday, March 3. However, the league and the players' union mutually agreed late Thursday to extend that deadline by 72 hours, to Monday, March 6, at 12:01 a.m. This is merely the negotiating period to extend the CBA. The CBA itself does not expire until after the 2007 season.
Why is that deadline important?
That deadline represents the beginning of the new NFL fiscal year. Teams had been working under a deadline of 10 p.m. ET Thursday to come into compliance with the salary cap, a six-hour reprieve from the original 4 p.m. ET deadline. However, Thursday's delay in the start of the new league year also pushed back the deadline for teams to release players and clear their salaries from the books. Teams now have until 6 p.m. ET Sunday to get under the 2006 cap limit.
Could the negotiating deadline be extended again?
Once thought unlikely, a further delay in the start of the new fiscal year is certainly possible given Thursday's developments. Pushing back the start of free agency gives the league and the union more time to work on an extension, and in the event an extension still can't be reached, gives teams more time to come into compliance with the 2006 cap.
If the sides are unable to agree on an extension, though, some teams will have to release some very significant players in order to clear cap room. The 2005 cap was $85.5 million, and teams were anticipating a 2006 cap of around $102 million with an extension to the CBA. However, the actual 2006 cap is going to be $94.5 million, which has some teams scrambling to comply.
If an extension is reached, what happens to players already released for cap purposes?
A high-level source with one NFL team told ESPN.com the league has informed teams that any player placed on waivers during this period of uncertainty can be recalled from waivers until there is more clarity about the pending free-agency period.
What happens if a team doesn't comply with the salary cap?
No team has ever gone over the salary cap, so this is a bit of an unknown. However, teams have been fined in the past for attempts to circumvent the cap. ESPN.com contributor and former Miami Dolphins GM Rick Spielman says NFL commissioner Paul Tagliabue has wide latitude in fining teams -- and even individual team executives -- or stripping draft picks for failure to comply with the salary cap.
With some teams in dire cap shape, we could see sooner than later just how wide the commissioner's latitude is. The Washington Redskins are one team to watch in this regard, since some other clubs that have studied the Redskins' cap closely have suggested Washington cannot mathematically get into compliance.
Will any of this affect 2006 free agency?
Aside from the player pool growing rapidly as teams cut players to comply with the cap, the biggest change in the free-agency landscape a lack of an extension will bring is that teams only will be able to prorate signing bonuses over four years, rather than seven, meaning players seeking large bonuses could be disappointed. And since base salaries can increase by a maximum of only 30 percent per year, the huge contracts we've seen recently (Peyton Manning and Tom Brady, for example) are likely a thing of the past. In short, it will be difficult, and in some cases impossible, to meet players' financial expectations.
Will any of this affect the 2006 season?
Only to the extent that some teams could look remarkably different heading into training camp than they did at the end of the 2005 season. But the current CBA actually has two more years to run (2006 and 2007), so if there is going to be a work stoppage at all, it's not likely to happen until 2008.
What happens if there is no extension to the current CBA?
Without an extension, the final season of the current CBA (2007) will be an uncapped season, meaning teams would have no limit on the amount of money they could spend on players.
Given the potential absence of a salary cap in 2007, some 2006 free agents might be unwilling to sign long-term contracts, figuring they could earn even more in the uncapped 2007. And NFL Players Association executive director Gene Upshaw has said once the salary cap goes away, the players aren't going to accept its return. Also, while unlikely, the potential exists that the owners could lock the players out in 2008. That is one reason the NFLPA will consider decertifying.
How will free agency be different in 2007?
Currently, players hit restricted free agency after three years and unrestricted free agency after four years. Without an extension to the CBA, players won't be eligible for unrestricted free agency until after their sixth year. Players whose contracts end after third, fourth and fifth seasons will be considered restricted free agents and subject to qualifying offers from their current teams.
Does an uncapped season also mean there's no salary minimum?
Yes. Currently, there is a salary minimum, as well as a salary cap. Every team must allocate a certain minimum amount to player salaries. However, when the salary cap goes away, so does the salary floor. Teams could choose not to spend a dime.
What happens to players' benefits (401k plans, health coverage, etc.)?
In an uncapped 2007, owners no longer will be responsible for their annual payments of about $13 million apiece to 401k plans, health coverage, life insurance and other programs under the umbrella of benefits. The NFL matches each player's 401k investments 2-for-1.
How does all of this affect the 2006 NFL draft?
Signing draft choices will be more difficult this year, because teams can prorate signing bonuses over only four seasons. Already, agents figure the most a top draft choice can make under that scenario is $15 million, a major reduction from recent years. That likely will lead to long holdouts by draft choices.
What are the long-term ramifications for the league?
Barring a new CBA, the players either will be on strike or the owners will lock out the players in 2008. The union likely will decertify, and antitrust rules will apply. Also, the NFL draft will go away in 2008 as part of a clause inserted into the current CBA. Players coming out of college could be free agents, with no salary restrictions. Open negotiations, including those for rookies coming out of college, will leave it to the players to get what they can get.
What are the long-term ramifications for the players?
If the union does decertify, it will cause a lot of uncertainty for the players. Teams could change the benefits package players receive, and there would be no organization to protect players' interests. Teams could offer salaries well below the currently established minimums.
The sudden change in the climate of labor negotiations between the NFL and the players' association, and the sudden flurry of player cuts, has left many fans with questions. Fortunately, ESPN.com has answers.
What is the primary issue?
The deadline to extend the current collective bargaining agreement (CBA) had been scheduled to expire at 12:01 a.m. Friday, March 3. However, the league and the players' union mutually agreed late Thursday to extend that deadline by 72 hours, to Monday, March 6, at 12:01 a.m. This is merely the negotiating period to extend the CBA. The CBA itself does not expire until after the 2007 season.
Why is that deadline important?
That deadline represents the beginning of the new NFL fiscal year. Teams had been working under a deadline of 10 p.m. ET Thursday to come into compliance with the salary cap, a six-hour reprieve from the original 4 p.m. ET deadline. However, Thursday's delay in the start of the new league year also pushed back the deadline for teams to release players and clear their salaries from the books. Teams now have until 6 p.m. ET Sunday to get under the 2006 cap limit.
Could the negotiating deadline be extended again?
Once thought unlikely, a further delay in the start of the new fiscal year is certainly possible given Thursday's developments. Pushing back the start of free agency gives the league and the union more time to work on an extension, and in the event an extension still can't be reached, gives teams more time to come into compliance with the 2006 cap.
If the sides are unable to agree on an extension, though, some teams will have to release some very significant players in order to clear cap room. The 2005 cap was $85.5 million, and teams were anticipating a 2006 cap of around $102 million with an extension to the CBA. However, the actual 2006 cap is going to be $94.5 million, which has some teams scrambling to comply.
If an extension is reached, what happens to players already released for cap purposes?
A high-level source with one NFL team told ESPN.com the league has informed teams that any player placed on waivers during this period of uncertainty can be recalled from waivers until there is more clarity about the pending free-agency period.
What happens if a team doesn't comply with the salary cap?
No team has ever gone over the salary cap, so this is a bit of an unknown. However, teams have been fined in the past for attempts to circumvent the cap. ESPN.com contributor and former Miami Dolphins GM Rick Spielman says NFL commissioner Paul Tagliabue has wide latitude in fining teams -- and even individual team executives -- or stripping draft picks for failure to comply with the salary cap.
With some teams in dire cap shape, we could see sooner than later just how wide the commissioner's latitude is. The Washington Redskins are one team to watch in this regard, since some other clubs that have studied the Redskins' cap closely have suggested Washington cannot mathematically get into compliance.
Will any of this affect 2006 free agency?
Aside from the player pool growing rapidly as teams cut players to comply with the cap, the biggest change in the free-agency landscape a lack of an extension will bring is that teams only will be able to prorate signing bonuses over four years, rather than seven, meaning players seeking large bonuses could be disappointed. And since base salaries can increase by a maximum of only 30 percent per year, the huge contracts we've seen recently (Peyton Manning and Tom Brady, for example) are likely a thing of the past. In short, it will be difficult, and in some cases impossible, to meet players' financial expectations.
Will any of this affect the 2006 season?
Only to the extent that some teams could look remarkably different heading into training camp than they did at the end of the 2005 season. But the current CBA actually has two more years to run (2006 and 2007), so if there is going to be a work stoppage at all, it's not likely to happen until 2008.
What happens if there is no extension to the current CBA?
Without an extension, the final season of the current CBA (2007) will be an uncapped season, meaning teams would have no limit on the amount of money they could spend on players.
Given the potential absence of a salary cap in 2007, some 2006 free agents might be unwilling to sign long-term contracts, figuring they could earn even more in the uncapped 2007. And NFL Players Association executive director Gene Upshaw has said once the salary cap goes away, the players aren't going to accept its return. Also, while unlikely, the potential exists that the owners could lock the players out in 2008. That is one reason the NFLPA will consider decertifying.
How will free agency be different in 2007?
Currently, players hit restricted free agency after three years and unrestricted free agency after four years. Without an extension to the CBA, players won't be eligible for unrestricted free agency until after their sixth year. Players whose contracts end after third, fourth and fifth seasons will be considered restricted free agents and subject to qualifying offers from their current teams.
Does an uncapped season also mean there's no salary minimum?
Yes. Currently, there is a salary minimum, as well as a salary cap. Every team must allocate a certain minimum amount to player salaries. However, when the salary cap goes away, so does the salary floor. Teams could choose not to spend a dime.
What happens to players' benefits (401k plans, health coverage, etc.)?
In an uncapped 2007, owners no longer will be responsible for their annual payments of about $13 million apiece to 401k plans, health coverage, life insurance and other programs under the umbrella of benefits. The NFL matches each player's 401k investments 2-for-1.
How does all of this affect the 2006 NFL draft?
Signing draft choices will be more difficult this year, because teams can prorate signing bonuses over only four seasons. Already, agents figure the most a top draft choice can make under that scenario is $15 million, a major reduction from recent years. That likely will lead to long holdouts by draft choices.
What are the long-term ramifications for the league?
Barring a new CBA, the players either will be on strike or the owners will lock out the players in 2008. The union likely will decertify, and antitrust rules will apply. Also, the NFL draft will go away in 2008 as part of a clause inserted into the current CBA. Players coming out of college could be free agents, with no salary restrictions. Open negotiations, including those for rookies coming out of college, will leave it to the players to get what they can get.
What are the long-term ramifications for the players?
If the union does decertify, it will cause a lot of uncertainty for the players. Teams could change the benefits package players receive, and there would be no organization to protect players' interests. Teams could offer salaries well below the currently established minimums.
posted by The Gryphon at 6:43 PM
<< Home