Shutdown Corner - NFL

Labor Update: 2011 salary cap set at $120 million

With many of the pieces in place for a new collective bargaining agreement, it's time for the NFL and players to get to work setting certain numbers — including and especially the per-season player compensation under the new agreement. A new salary cap must be put in place after the capless season of 2010, and the new cash-to-cap guarantees (which will require teams to spend anywhere from 90 to 100 percent of the cap number on player costs) will have some owners spending more than they have in many years … or ever.

We've broken down the approximate obligation for certain underspending teams based on a cap estimation of $124 million. That number came from the aggregate player costs per team in 2010, and as it turns out, we were pretty close.

According to ESPN's John Clayton, the 2011 cap will be set at $120 million, with over $20 million more per team allotted for ancillary benefits, which means that every NFL team will have to spend at least $108 million in pure player costs (not deferred payments and filmy rarely-to-be-earned incentives) this season. That mandatory floor hasn't been determined, but when the CBA is finally ratified and the league year begins, many teams will be doing some frantic restructuring — on both sides of the table. One way to help teams over the cap, according to that report, is the possibility of a one-player exemption per team in which $3 million could be taken out of the benefit pool and applied to the cap figure.

If the current projected transition dates remain in effect, teams will have three days to re-sign their own free agents starting on June 25, and with the free-agent target point bringing the fourth accrued player season as opposed to the six-year window in 2010, there will be many more players on the open market. Teams like the Carolina Panthers may have to spend more than $40 million just to hit that required floor, but with a first overall pick to be signed in Cam Newton(notes) and free agents the caliber of DeAngelo Williams(notes), Charles Johnson(notes) and James Anderson(notes), that money could get eaten up more quickly than anyone in the Panthers' front office could have imagined just a year ago.

Current cash-to-personnel numbers are approximate at best, but based on the figures given to us by Football Outsiders cap analyst Brian McIntyre, several teams will have a lot to do when the league year hits. According to the numbers we have, 18 of the 32 NFL teams are currently under the projected minimum obligation of $108 million (which may be higher based on the final cash-to-cap percentage), and some teams are tens of millions off at this time.

The Panthers, Kansas City Chiefs, Tampa Bay Buccaneers, Cleveland Browns, Buffalo Bills and Indianapolis Colts are the furthest off — though we can take the Colts off that list based purely on whatever they wind up doing with Peyton Manning(notes).

The bottom line with the new cap/cash structure is that you can expect to see many more front-loaded contracts to meet those numbers, and most likely a situation where contract figures and actual player costs are far more similar than they have been in a long time.

Some players may get back-end incentives, especially veterans trying to prove themselves, but the system put in place for all owners to invest shared profits into personnel should be a boon for all involved. This should reduce the justifiable resentment held by higher-spending owners toward the penny-pinching minority, and the increased floor allows the players to back off their overall revenue percentage and give the owners a taste of the expense credits they've wanted all along.

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