homegame

The NFL's K-Shaped Economic Recovery

 NFL free agency begins next week and by necessity it will be a buyer's market. Strange but true, many of the sellers are perfectly OK with that situation.

The league salary cap for this season is $182.5 million, an 8 percent decline from 2020, due to the Covid-related revenue losses of last season. Gate receipts aren't the main source of NFL income, but they do add up to a tidy sum. The main way teams "manage" the cap is to backload contracts so as to push the financial day of reckoning as many seasons off into the future as possible, assuming an ever-rising tide of income will make that day less painful, so the Covid shock has left a number of franchises with dreadful formal cap situations. The Saints and Eagles have to reduce cap payroll (never to be confused with actual payroll) by over $60 million capbucks. 

Other teams have oodles of capbucks to spend if they wish. This is a mixed blessing, since the main way teams acquire such imaginary fortunes is to stink on ice for seasons on end, with constant roster turnover and no veterans worth keeping driving payroll down. So to no one's surprise, two of the biggest cap fortunes belong to the Jaguars and Jets.

As Bernie Sanders could predict if he cared about football, there are many more franchises who are in need of more cap space than those with space to use. Therefore, not only will unrestricted free agents find fewer and lesser offers, veterans with 2019 market rate contracts may face release into the cruel market if their teams need to shrink their putative spending under the cap.

Sounds like another page in the world's longest sports book "How NFL Players Get Screwed by the Owners," doesn't it. And it is, kind of. And yet it may not be. The Cap Crunch of '21 also offers wise veterans the chance to bet on themselves with an excellent chance of a big payday NEXT March or the March after that.

As an example, let's take offensive tackle Trent Brown. It was learned this week that Brown was traded from the Raiders, who're cap-stressed, to the Patriots, who have a nice number of cap millions to play with. Brown will reportedly sign a one-year, $11 million contract with New England, a considerable pay cut from the $16 million he made with Vegas last season.

Brown MIGHT come off as relatively poorly as those numbers suggest, but then again, this deal could work as well for him as for the Pats. He's an excellent player when healthy but has trouble being so. Assume he's healthy and productive for New England in 2021. Brown does. He will then be a free agent once more in 2022, a veteran with a burnished CV.

He will also be a free agent entering a much different market. The Cap Crunch of '21 will almost surely be followed by the Cap Explosion of 2022 or maybe 2023. The NFL is negotiating a new set of TV contracts with its broadcasting partners and its demands are not modest. The producers of Broadcast Television's Last Hit Show are seeking 100 percent increases in rights fees from its network partners. According to reports that have been denied by all sides and thus appear quite credible, NBC, CBS and Fox have all agreed. Disney/ESPN is said to have balked, but they'll knuckle under. The threat of losing pro football to a streaming service such as Amazon Prime will keep the Mouse in line.

Twice as much TV money means the cap will go up, way up. It has to, since its based on a percentage of revenue. Players entering the market will find more takers offering bigger contracts. The guys signing one-year deals on short money this year will be the "what's the world coming to" contracts of tomorrow.

For Bill Belichick, who loves a bargain, and whose team, to be polite, has multiple needs on both sides of the ball, this spring offers the chance to acquire useful players as short-term solutions to those needs. As is always the case, some of those bargains will be more than worth it and some won't be. But at least there's the possibility Belichick can buy enough buckets to match the leaks in the Pats' roof -- all but the one that most needs fixing.

The owners would have to adapt the 1952 playing rulebook to alter the iron law of NFL economics. There's never gonna be a buyer's market for quarterbacks worth a damn. Dak Prescott is proof of that. The Cowboys QB staged a multiyear battle of wills with Jerry Jones, the most powerful and headstrong owner of them all, and Prescott won going away. He has reportedly agreed to a four-year, $160 million contract. This, in the year of the Cap Crunch and coming off a season in which he was injured for almost all of it.

Prescott is an excellent player, but nobody would put him any higher than fifth best among current QBs. (There's Patrick Mahomes, Aaron Rodgers, Deshaun Watson and yes, Tom Brady at the top). That might even be generous. Yet the Cowboys had no alternative but to make Prescott the highest paid player in league history on an annual basis because losing him was unthinkable.

The Pats already suffered the unthinkable. They lost Brady. The cost of finding even a stopgap 2021 quarterback is likely to range from $10 million for the Gardner Minshews and Ryan Fitzpatricks out there to $25 million for the services of Jimmy Garoppolo, assuming the 49ers want to dump him, which many NFL observers do and I don't. There would go a significant portion of all New England's dandy cap space, for a short-term kludge at the game's most important position. Most unsatisfactory, that.

It is hard to imagine Belichick trading way, way up in the draft to pick a rookie QB, betting the next five years or so of New England's future on the riskiest card in the personnel deck. But the cold logic of the NFL's K-shaped salary structure indicates it might be his only real chance to put the Pats' in working order to leave for a successor. Teams with superior quarterbacks on rookie contracts get the most out of their cap space no matter what that number is.

Belichick seldom trades up in the draft, it's true. But he has done it.

Belichick has never picked a quarterback in the first round, it's true. But he never had to. He had Tom Brady.

And now he doesn't.

posted by Michael Gee @ 10:10 AM