Salary cap rise to $133 million shows how new CBA is working

In 2014's NFL, instant analysis is paramount.

You grade draft classes before rookies take a practice snap. You assess free-agent deals before clubs have the new players fitted for a helmet and shoulder pads.

And you analyze a 10-year collective bargaining agreement before it's had the chance to breathe.

Conversely, last week's announcement that the salary cap will be set at $133 million for next season is a piece of real, tangible evidence that the structure of the deal done by the players and owners three summers ago is working as it was intended to at the time. Which is to say it is working as a partnership between the owners and players, with the windfall for the latter group coming as profits rise for the former.

The cap grew by .005 percent in 2012, going to $120.6 million from $120 million, and by 1.9 percent last year, going from $120.6 million to $123 million. This year, the jump was $10 million, or 8.1 percent, which is the largest rise -- by percentage -- since 2006, which was the first year of the previous CBA.

"The salary cap was only stagnant because league revenues were stagnant at the time," NFL Players Association spokesman George Atallah said. "And that was a combination of the U.S. economy and the owner-imposed lockout. The U.S. economy, no one had any control over. And the lockout created uncertainty among sponsors and other partners, so naturally the cap didn't go up.

"We knew at the time, in 2011, that once the agreement was hammered out, revenues would grow at a healthy rate during the 10-year period. And that's why the players insisted on minimum spends, higher veteran minimum wages and a guaranteed bandwidth of a revenue share over the life of the deal."

And as is the case with many things when it comes to the NFL, television as a major driver of revenue is the guiding force on the players' take rising. But more so, it's the league's belief that the deal works because the system, eventually, was always going to lead to growth -- for everyone.

"Throughout the negotiation, we tried to emphasize our belief that if we had an economic system that would promote growth, we'd develop revenue that would lead to rising salaries and benefits for the players," NFL executive vice president/general counsel Jeff Pash said. "This year's growth is very positive and demonstrates that we do have the kind of system that benefits everyone.

"Television is a part of it, but it's also the new stadium projects -- we have tremendous stadium development in San Francisco, Minnesota and Atlanta, and renovations in places like Green Bay and Pittsburgh -- and the new sponsorships and digital deals that have been done."

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So what was being missed as skepticism over the deal rose the last three years?

Mostly, people ignored the structure of the deal itself.

Back in 2011, owners argued that they should have greater financial flexibility to invest their own money back into the game, which came via an expense credit in the old deal. The players insisted on the expense credit being eliminated. They made the case that most of the owners' revenue came through the television contracts, which are largely struck because of the quality of the on-field product, and not as much through off-field ingenuity.

So the compromise was the bucket system, which Chiefs owner/NFL Management Council Executive Committee member Clark Hunt played a large role in hatching. The expense credit, which was up to $1 billion, would be eliminated. And the owners would give the players 55 percent of the television money. In return, the percentages going to players would be smaller for Properties (45 percent) and Local (40 percent), which would give clubs leeway to take the money they worked harder to earn and invest it back into the NFL's growth.

In essence, it was always going to work out this way. The players who negotiated the deal in 2011 knew that the bigger television dollars would come when the new broadcast deals went into the equation, and those new deals don't start until this year. So they sacrificed some of their own money in the short term, to make sure players on the back end got a larger take.

That's happening now and should continue to happen. The cap is projected to rise by more than $10 million in 2015, and there very well could be more "Thursday Night Football" money factored in going forward. All the broadcast deals were negotiated with the league's take steadily rising for the life of the contracts, which means the players' take will as well, from now through 2020.


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"As I share with everyone, our job as a union was to negotiate a deal that benefits the larger number of player over longest period of time," Atallah said. "And the cap is only one of many economic measures that we considered when players negotiated the most recent CBA. We had a deal in 2006 that was neither a revenue share nor a partnership. Under the new agreement, we have both a revenue share and a partnership."

On the flip side, the owners have been able to invest back into growing the international project, with three games set for London this fall, as well as initiatives in the areas of player safety and youth football. And the cap number, of course, reflects the growth Pash mentioned in the league's business partnerships.

"It's attributable to the fundamental health of the game and the popularity of the game," Pash added. "And it can't be separated from the fact that we now have long-term labor stability."

The key going forward is the floor more than the cap. The final eight years of the CBA are broken into four-year periods (2013-'16, 2017-'20) during which teams are required to spend up to 89 percent of the cap, with a guaranteed league-wide spend of 95 percent. If the individual clubs or league fail to hit those thresholds, the league/clubs pay the difference to the players.

Both the union and league have expressed satisfaction with where the CBA has left them in March 2014. As for how the deal will stand up long-term, Atallah simply said, "Frankly, we don't know yet. We're only three years in."

But at least now, we have a bit of a clearer picture of where things are going.

"We're always looking for opportunities to grow," Pash said. "I don't think it's a stagnant business. I know the commissioner and the owners feel the NFL has a bright future, and the players are a big part of it. We're going forward hand in hand, and both will share in the benefits. Everyone involved in the game should feel optimism for the future. This is a great time to be a part of the NFL, it's a great time to be associated with the NFL, and we still feel like our best days are ahead of us."

Follow Albert Breer on Twitter @AlbertBreer.