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The Money Pit

Who wins, who loses, and who’s gonna get rich thanks to an unexpected bump to the NFL salary cap

While the football world has been transfixed by one of the more intriguing draft classes in recent memory, a crucial piece of news has flown under the radar: The NFL’s hard salary cap is about to rise dramatically. If the reports are true — and teams have spent the past four days making roster decisions as if they are — the swollen cap will fundamentally change the way teams are building their rosters and affect hundreds of would-be transactions around the league. It can be a get-out-of-jail-free card or an opportunity to lock up a star player (or steal somebody else’s), but either way, the impact is already being felt.

After various reports over the past month suggested the salary cap might rise by a larger-than-expected amount, Adam Schefter tweeted last Friday that the league’s cap will rise by about $10 million and come in near $133 million, an increase of more than 8 percent. Perhaps even more noticeably, Schefter’s source suggests the climb won’t stop there, projecting the 2015 cap figure to be $140 million and the 2016 cap figure to come in at a whopping $150 million.

When that news broke, the music from newsreels about the Roaring Twenties started playing in NFL team offices. It was once customary for the cap to rise by a healthy amount on a yearly basis, but once the league and its players agreed to a new collective bargaining agreement at the end of the 2011 lockout, it looked like those bumps were a thing of the past. As I wrote last March, the 32 NFL franchises had gotten used to cutting coupons after years of largesse. After rising by an average of 8.6 percent in the decade preceding the new CBA, the salary ceiling was rolled back after the lockout and hasn’t yet returned to its 2009 peak. As you can see in the table below, the prescribed increases for 2014-16 restore the spending bumps to their former levels:

In speaking to a number of front-office personnel around the league, I was told their teams had been planning for the 2014 season as if the cap was going to undergo a small increase, one in line with the 2013 jump of 2 percent … until, that is, they started hearing otherwise a few weeks ago. The league calculates the cap figure as a negotiated percentage of different revenue streams,1 so while the exact figure is still being hammered out by the league and the players’ association, it seems pretty clear that a rise driven by an increase in revenues is on the way.

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So Which Teams Win … and Which Ones Lose?

An increased cap helps teams in a number of ways. Most obviously, for teams that expected to be drowning in salary commitments, the extra breathing room allows them to hold on to players they might have needed to let go and even creates the possibility of new signings. (You can chalk up Carolina’s franchising of Greg Hardy to the new cap, but more on him later.) More subtly, teams will have more flexibility in handling the salary rises that are baked into most every NFL contract, which will allow them to avoid the restructurings that inevitably lead to early releases and cap trouble down the line. A typical middle-class veteran with steady rises in his contract, like Kansas City’s Mike DeVito, is more likely to play out his entire deal when the league is awash with cap space.

It’s also going to make those players who are hitting the free-agent market very happy. Most teams and cap analysts tend to view contracts in terms of their value across the first three years, since those seasons almost always contain the vast majority of the guaranteed money, with players often renegotiating or finding themselves released after the three-year mark. If Schefter’s report turns out to be accurate, teams will be preparing for hefty cap increases over the next three years and be far more comfortable offering today’s free agents much larger deals than they otherwise would have. In other words, it’s a good day to be Eric Decker. But not so much for other folks. This is definitely …

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1. … bad news for the Seahawks and Broncos.

Last year, our two Super Bowl participants took advantage of their short-term cap space to sign a number of veterans on one- or two-year deals for moderate salaries. The Broncos rebuilt their defense on the fly with Terrance Knighton, Shaun Phillips, and Dominique Rodgers-Cromartie, while the Seahawks built a dominant defensive line by adding Cliff Avril and Michael Bennett after their long-term market failed to materialize.

It’s difficult to see those same teams capitalizing on undervalued veterans in this year’s marketplace, because the amount of available cap space should allow the league to invest heartily. Rodgers-Cromartie signed what amounted to a one-year, $5 million deal last offseason; this year, he should receive three times that much in guaranteed money. Not only will he get paid, but this year’s version of Rodgers-Cromartie — somebody like Sam Shields — should get a multiyear deal with a significant guarantee, too. Everybody wants to play for a winner, but it’s difficult to pass up the financial security of a long-term deal.

2. But it’s even worse news for the Browns, Jaguars, and Raiders.

If everybody has more money to throw around, the deep pockets of the league’s worst teams look far less appealing. Players aren’t always going to take the best financial offer, but under a tight cap the Raiders might have been able to pony up twice as much guaranteed money for somebody like Michael Johnson, an upper-echelon free agent who should come in with around $20 million in guarantees. Now, it’s easy to imagine a more competitive team like the Vikings or Titans targeting him while making a competitive offer with $18 million or so in guarantees.

3. This could fuel spending sprees by the, er, less responsible teams.

Having extra cap space is great, but some teams see a little window and spend like they’re trying to remake Brewster’s Millions. I’m looking at you, Colts. Last year, as one of the few teams around the league with plenty of cash to burn, Indianapolis delved into the market on Day 1 and gave above-market deals to a variety of mediocrities; contracts for the likes of Darrius Heyward-Bey, Greg Toler, and Erik Walden were panned at the time and look no better one year later. The same is true of the Dolphins, who have moved on from general manager Jeff Ireland but still have the same ownership and head coach in place, and the historically bleak Daniel Snyder regime in Washington, which — in a note that should leave the hearts of Washington fans cold — will have significant cap space for the first time since the lockout.

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Which Players Are Affected?

Those are the market effects you should expect to see on a leaguewide level, but how will that actually affect the free-agent classes of 2014 and beyond? Teams can always change their plans, but I think these moves are all far more likely to happen with a $133 million cap. Let’s look at five scenarios, starting with an oft-rumored move that would have put a Hall of Fame candidate on the market.

1. The Cowboys don’t have to cut DeMarcus Ware.

When I wrote about Dallas’s salary woes in October, I noted that cutting Ware was Dallas’s most obvious path to getting under the cap. Such a move would turn Ware’s $16 million cap hit for 2014 into $8.6 million in dead money, saving the Cowboys $7.4 million in space and clearing him off the books for future investment. I didn’t think the Cowboys would actually be brave enough to cut Ware this offseason, but over the past few weeks, they had begun to talk publicly about forcing Ware to either restructure his deal or be released from the team. Neither Ware nor agent Pat Dye have publicly budged.

With an extra $8 million of cap space lying around, the Cowboys can be more flexible. They will still likely want to restructure Ware’s deal, but the additional dough will allow them to make a far more palatable offer. They could also use that $8 million to swallow the savings they would have received from releasing Ware this year and hold on to him under the terms of his current deal for another season before moving on, when they would realize a savings of more than $12 million. Before this news, it seemed likely the Cowboys would have to do something about their star pass-rusher. Now? They have options.

2. The Saints get flexibility with Jimmy Graham.

New Orleans, one of the league’s most cap-strapped teams, already ensured it will keep its star receiver around for another season by slapping the franchise tag on him before yesterday’s deadline. The only question now is determining which position Graham actually plays. You’ve probably heard about this problem by now: Graham is nominally listed as a tight end, but if you’ve seen him suit up, you know he moves all around the formation and spends plenty of time as a wide receiver. Naturally, Graham also wants to be paid like one; the franchise tag for a wide receiver this offseason is a guaranteed one-year deal at $12.3 million, while the tight end tag guarantees the selected player only a bit more than $7 million.

With the larger cap, the Saints can afford to pay Graham either figure, although they would surely prefer the $7 million hit. They’ve already lopped off $16.9 million by releasing defensive stalwarts Jabari Greer, Roman Harper, and Will Smith, but the Graham decision will begin to affect their decisions on offense. The Saints could save $2.4 million on their 2014 cap by releasing Lance Moore, or save $2.9 million by waiving Pierre Thomas; if Graham had been found to be a wide receiver and the Saints were forced to pay him $12.3 million under the tight cap, they almost surely would have had to let Moore and Thomas go. Now, even if Graham’s paid like a wideout, they can choose to keep those longtime contributors for another season.

My suspicion is that the two sides will eventually come to terms on a long-term contract that will pay Graham about $10 million per season. It would benefit both parties: Graham would procure some level of security and become the highest-paid tight end in league history with a salary approaching that of the league’s star wideouts, while the Saints would get cap relief this season while ensuring they don’t have to deal with this same problem again next season. If the Saints try to apply the franchise tag on Graham for a second consecutive season, his cap hit will rise by 20 percent, regardless of which position he’s designated as playing.

And if they don’t come to terms, I expect all parties involved will come to an agreement that designates Graham as a hybrid wideout–tight end in terms of the franchise tag, just as the Ravens did when Terrell Suggs challenged to be tagged as a defensive end several years ago. Graham lined up in the slot or out wide on 67 percent of his snaps last year, so if the hybrid designation treats his snaps proportionally, his franchise tag will come in at about $10.5 million.

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3. The Panthers GM hasn’t stopped dancing yet.

If any team needed cap space this year, it was the Carolina Panthers, whose remarkable 12-4 campaign in 2013 had given way to serious questions about the makeup of the 2014 roster. The odious contracts handed out by Marty Hurney had put the Panthers into cap hell, and while Dave Gettleman restructured a few deals to create some room, it still seemed unlikely that Carolina would be able to find the space needed to ensure that star defensive end Greg Hardy would remain with the team for another year.

That extra $8 million might have saved Carolina’s bacon. It’s just enough to allow the Panthers to lock Hardy up with the franchise tag while giving Carolina some much-needed leverage in long-term contract negotiations. A Hardy extension would likely require a big signing bonus with guaranteed base salaries in the second and third seasons of a six-year deal, which would allow Carolina to save the big cap hits for 2015 and 2016. By eliminating the market for Hardy for at least one more season, that sort of deal will look far more palatable than it did a week ago.

The Panthers are still in rough shape financially, though. Three-quarters of their starting secondary are unrestricted free agents. There are bad deals up and down the roster from the Hurney era that won’t go away until 2015 (at the earliest), and Gettleman added one by giving kicker Graham Gano a four-year, $12 million deal.2 The Panthers also need to carve out cap space to give extensions to Cam Newton and Luke Kuechly, two of the biggest bargains in the league. And when left tackle Jordan Gross retired last week, it opened up another huge hole on the Carolina roster while creating just $300,000 in salary-cap space. The extra space doesn’t save Gettleman from cap hell, but it does allow him to keep Hardy, one of his star players, down there with him.

4. Michael Bennett is less likely to stay in Seattle.

Perhaps no player was squeezed more by last year’s cap than the former Buccaneers star, and while he made the most of his year with the Seahawks, his response to the idea of taking a hometown discount to stay in Seattle was to note, “This is not Costco.” After settling for a one-year, $4.8 million deal a year ago, it’s time for the 28-year-old Bennett to get paid.

The Seahawks are in great cap shape this year, especially since they released Sidney Rice and Red Bryant after their Super Bowl win. Next year — and beyond — is a different story. Their cap space will be swallowed up by new deals for many of their young superstars, starting with Richard Sherman and Earl Thomas before getting to Russell Wilson. It will be exceedingly difficult for the Seahawks to give Bennett a long-term deal that pays him like a premium player. And with Hardy off the market and Ware possibly behind, the market’s supply of 4-3 defensive ends is shrinking.

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5. St. Louis can feel better about keeping Sam Bradford.

If you take everything the Rams say publicly about their incumbent starting quarterback at face value, they intend to hold on to Bradford for one more season and use the second overall pick in this year’s draft to upgrade somewhere else on the roster, likely drafting an offensive tackle, yet another wide receiver, or even trading down to somebody who needs a pass-rusher and wants Jadeveon Clowney.

Bradford’s mammoth contract, as the first overall pick under the terms of the old CBA, locks up $17.6 million of St. Louis’s cap in 2014. The Rams could save $10.4 million by cutting bait and moving on from their oft-injured starter, but with the extra money they have to spend, they can use the space to retain Bradford for one more year while making improvements elsewhere. They could choose to re-sign Rodger Saffold, who was impressive during a short stint at guard, or give disappointing cornerback Cortland Finnegan one more chance to prove he is worth the five-year, $50 million deal he signed two years ago. If the Rams want to give Bradford one more chance to prove he’s their franchise quarterback, the space allows them the flexibility to do so.

♦♦♦

And obviously, that’s just the beginning: The higher ceiling will affect dozens of other moves over the next few days. The Patriots will be less likely to retain Aqib Talib with more teams able to accommodate the salary for an elite cornerback. An extension will be more likely for Justin Houston in Kansas City. Washington, of all teams, could return to its rightful place as offseason champions, competing for a key contributor or two even after franchising Brian Orakpo this week. After a year when the salary cap was squeezed and spending was sparse, 2014 promises to be a return to the free-spending days of the past decade. Get ready for a whirlwind March.

Filed Under: NFL, St. Louis Rams, michael bennett, Carolina Panthers, Cleveland Browns, Jacksonville Jaguars, Oakland Raiders, Seattle Seahawks, demarcus ware, Dallas Cowboys, Bill Barnwell

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Bill Barnwell is a staff writer for Grantland.

Archive @ billbarnwell

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