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Old 05-23-2012, 08:14 PM    (permalink
stlouisfan37
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Default How high will player salaries get?

As we all know, player salaries have skyrocketed in the last decade. The NFL finally put a rookie salary cap in place so that players would actually have to earn these great rewards, but with several $100 million-plus contracts in the league now, I got to wondering how big this snowball will get before it melts.

One of the things that caught my attention this offseason was the backloading that agents have done with player contracts, specifically Calvin Johnson and Mario Williams. While this tactic requires patience on the part of the player, it pays off bigtime when their contract year comes up in terms of leverage.

When a player's contract is finished, the team has the right to place the franchise tag on him at a value of either the average salary of the top 5 highest paid players at his position, or 120% of his cap number that year, whichever is greater. Because of the backloaded contracts, both Johnson and Williams had franchise values of over $20 million. This gave them a huge amount of leverage when it came time to renegotiate. In the end Detroit gave Johnson the huge deal he was seeking, while Houston was forced to let Williams walk and he got his deal from Buffalo.

Take a look at the situation Drew Brees is in right now. Due to his contract NOT being backloaded, the Saints are not behaving in the same manner as they would if he had a huge franchise number. You better believe that every agent for a starting QB in the league is paying close attention. I don't see many similar contracts coming about in the near future.

Another thing to consider is the possibility that more and more underclassmen will declare for the draft rather than returning to school. Since the inception of the rookie cap, it has become the wiser move to come out early. The sooner you finish your rookie contract, the sooner you get the big bucks.

I don't know if I'm looking for answers here, or if I just find the money side of the game fascinating. In any case, I would like to know how everyone else sees this. Just seems like the kind of thing we all like to talk about around here:)
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Old 05-23-2012, 08:24 PM    (permalink
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Another thing to consider is the possibility that more and more underclassmen will declare for the draft rather than returning to school. Since the inception of the rookie cap, it has become the wiser move to come out early. The sooner you finish your rookie contract, the sooner you get the big bucks.
This has always been true though lol. Nothing has changed either way, except some players may never get the "big bucks" now.
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Old 05-23-2012, 09:01 PM    (permalink
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This is true. So will the result be a wider margin between the have's and have nots? The rookie salary cap was supposedly put into place so that teams would be able to give more money to veteran players. I don't think the intention was to just give more money to the veteran players who are already getting more money.
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Old 06-04-2012, 02:24 AM    (permalink
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So will the result be a wider margin between the have's and have nots?
It should be considerably more forgiving to bad teams. If Jamarcus Russel got the contract Cam Newton got, the Raiders would obviously have more cap room/flexibility. It should increase the speed for bad teams improving if they draft well, and lessen the pain if they draft poorly.

I do think the rookie salary cap will encourage more players to leave college early. For players who will go first round as a junior, there's not the incentive to stay and try to be a top 5-10 pick. Furthermore, their rookie contract may be shorter, getting them to their 2nd contract faster.
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Old 06-04-2012, 03:08 AM    (permalink
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Gotta hand it to you spammy...you might just have the best username on this forum.
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Old 06-04-2012, 05:29 AM    (permalink
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I think that I actually liked the spambots more before Scott/Shane/Whoever took away their ability to post links.
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Old 06-04-2012, 09:16 AM    (permalink
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The rookie salary cap was in place because rookies were starting to get contracts that paid them the top 5 of their position, before even playing a game. And if they busted, it set the franchise back. Now, a team can just throw that bust out and not worry about it. For instance, say Gabbert blows again this year and the Jaguars get the first pick. There would be nothing holding them back from taking a QB with that pick as they don't have the bank invested in Gabbert like the Rams do with Bradford, like the Raiders did with Russell, and so on.
I would argue that the way it used to be encouraged players to come out sooner than it does now. I don't see a sudden surge of more underclassmen declaring.
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Old 06-04-2012, 10:20 AM    (permalink
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The rookie salary cap was in place because rookies were starting to get contracts that paid them the top 5 of their position, before even playing a game. And if they busted, it set the franchise back. Now, a team can just throw that bust out and not worry about it. For instance, say Gabbert blows again this year and the Jaguars get the first pick. There would be nothing holding them back from taking a QB with that pick as they don't have the bank invested in Gabbert like the Rams do with Bradford, like the Raiders did with Russell, and so on.
I would argue that the way it used to be encouraged players to come out sooner than it does now. I don't see a sudden surge of more underclassmen declaring.
That's what I thought until the draft set a record this year with the most underclassmen declaring with 63. I think that players might actually declare earlier now because they now that they can only play football for a finite number of years. By not declaring earlier they are pushing that big pay day a year into the future, and since football players want to get paid they'll declare early under they new CBA. I fully expect the trend of more underclassmen declaring to continue.
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Old 06-04-2012, 10:47 AM    (permalink
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Salaries are irrelevant. It's all about guaranteed money. No one except a top 5 QB can expect to be paid every penny in a $100+ mil contract.
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Old 06-24-2012, 11:49 PM    (permalink
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NFL salaries will keep rising so long as the league keeps expanding and the dollar keeps weakening.
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Old 06-25-2012, 12:01 AM    (permalink
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This is true. So will the result be a wider margin between the have's and have nots? The rookie salary cap was supposedly put into place so that teams would be able to give more money to veteran players.
I think it will have the desired effect. Every team will have more of their cap money to spend on vets (and a cap floor to boot), but not every team has guys that will be demanding absolute 'push the limits' top dollar. So they will likely use it to retain mid range+ vets.

In any case, I don't think the salary system how it was before was stopping many teams from keeping who they wanted in most instances, so I don't see more of the pie for vets meaning only the elite will get a lot more money and that's it - teams will still want to hang onto the other guys just like before.

Although I guess if the league really wanted to spread the wealth to more vets they could have raised the vet minimal significantly.
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Old 06-26-2012, 11:57 AM    (permalink
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Under the previous CBA NFL teams had to pay huge amounts to rookies. Under the new system they can pay the money they saved to veterans or they can keep it themselves.

The NFL used spreading the money to veterans as an excuse to save money.

Not to mention it was getting pretty ridiculous that the highest paid player at some positions were rookies.
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Old 06-26-2012, 05:49 PM    (permalink
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NFL salaries will keep rising so long as the league keeps expanding and the dollar keeps weakening.
Yeah, pretty much. In the 90's, it looked like NBA salaries were going to rise to completely insane levels. Michael Jordan was signing one-year contracts that paid him $30 Million per year. 15 years ago, Jordan earned something like $33 Million for one season; but Kobe was the highest paid player last season, at about $25 Million. The league stopped expanding after the MJ Gravy Train, and I wouldn't be surprised if inflation-adjusted revenue declines eventually force them to consolidate one or two teams (if a guy like Durant doesn't turn into their new cash cow).

The weakening dollar is a great point, btw. People rarely think about that. It's just like the way that every few years we have a new "highest grossing movie EVER," but they never mention inflation and population increases.

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Old 06-26-2012, 06:01 PM    (permalink
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Yeah, pretty much. In the 90's, it looked like NBA salaries were going to rise to completely insane levels. Michael Jordan was signing one-year contracts that paid him $30 Million per year. 15 years ago, Jordan earned something like $33 Million for one season; but Kobe was the highest paid player last season, at about $25 Million. The league stopped expanding after the MJ Gravy Train, and I wouldn't be surprised if inflation-adjusted revenue declines eventually force them to consolidate one or two teams (if a guy like Durant doesn't turn into their new cash cow).

The weakening dollar is a great point, btw. People rarely think about that. It's just like the way that every few years we have a new "highest grossing movie EVER," but they never mention inflation and population increases.
To be fair the weak dollar could have an adverse effect on the revenue when you look beyond a couple of years. But right now it's definitely helping.
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Old 06-26-2012, 06:17 PM    (permalink
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With a dropping dollar, even if real revenue stops growing as fast as it has been, players will continue getting bigger and bigger dollar amounts on their deals.
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Most misleading 10+ sack season EVER.
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Old 06-26-2012, 08:16 PM    (permalink
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Mario got 96 mill not 100. incentives can make it 100 mill.
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Old 06-26-2012, 08:25 PM    (permalink
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i just imagine that eventually QBs will take up 95% of a team's salary as that is the only position in the NFL that matters
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Old 06-26-2012, 08:33 PM    (permalink
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So rumor has it salary cap isn't going to increase much next year.
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Old 06-27-2012, 01:56 AM    (permalink
Iamcanadian
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The NFL is in the entertainment business and the salaries its stars receive are minuscule compared to what an actor or actress can make in a season and all their money is guaranteed. At leat half a dozen actors and actresses make over 100 million a year with many more in the 50 to 99 million category but nobody complains about that. Sport fans just love to complain about high salaries but in today's world, sport figures really don't come close to the salaries of highly successful CEO's or many other professions, they are just reported more by the sports media.
Salaries in the entertainment industry are based on profits and as long as profits continue to grow, salaries will expand with them. 25 years from now, fans will wonder what all the fuss was about after salaries go up 10 to 50 fold from today's numbers just like they did in the last 25 years. Right now sport salaries are peanuts compared to other professions.
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Old 06-27-2012, 02:00 AM    (permalink
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I sure would like to know which actors make $100 million a year. Only a handful of actors charge $20 mil per movie, which equates to them making 5 movies per year. Really?
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Old 06-27-2012, 02:05 AM    (permalink
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i just imagine that eventually QBs will take up 95% of a team's salary as that is the only position in the NFL that matters
Minimum salaries will probably prevent it. If it weren't for minimum salaries, I'd imagine that most punters and "special teams aces" would be earning 50k a season.

I'm guessing that's why Brees, Manning, and Brady headlined the anti-trust lawsuit.

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Old 06-28-2012, 06:47 AM    (permalink
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The NFL is in the entertainment business and the salaries its stars receive are minuscule compared to what an actor or actress can make in a season and all their money is guaranteed. At leat half a dozen actors and actresses make over 100 million a year with many more in the 50 to 99 million category but nobody complains about that. Sport fans just love to complain about high salaries but in today's world, sport figures really don't come close to the salaries of highly successful CEO's or many other professions, they are just reported more by the sports media.
Salaries in the entertainment industry are based on profits and as long as profits continue to grow, salaries will expand with them. 25 years from now, fans will wonder what all the fuss was about after salaries go up 10 to 50 fold from today's numbers just like they did in the last 25 years. Right now sport salaries are peanuts compared to other professions.
I think this is pretty rare. It probably only happens to actor / actress once in their life time (I'm thinking like Will Smith around the time MiB came out). He might have made 100 million in a single year, but it would be rare.

The more important part though, is that Will Smith wasn't on a team with a salary cap where he took a large percentage of it. Movies are budgeted by different companies and different people.

The actor / actress analogy would only fit if a player was playing for multiple teams and getting paid by each.
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Old 06-28-2012, 09:40 AM    (permalink
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The NFL is in the entertainment business and the salaries its stars receive are minuscule compared to what an actor or actress can make in a season and all their money is guaranteed. At leat half a dozen actors and actresses make over 100 million a year with many more in the 50 to 99 million category but nobody complains about that. Sport fans just love to complain about high salaries but in today's world, sport figures really don't come close to the salaries of highly successful CEO's or many other professions, they are just reported more by the sports media.
Salaries in the entertainment industry are based on profits and as long as profits continue to grow, salaries will expand with them. 25 years from now, fans will wonder what all the fuss was about after salaries go up 10 to 50 fold from today's numbers just like they did in the last 25 years. Right now sport salaries are peanuts compared to other professions.
I don't think that anybody said that players are overpaid or complained about the salaries. Sports fans are pretty sophisticated when it comes to salary issues, as they relate to the pricing mechanism.

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