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Cap-tastrophe?

Feb 20, 2006, 8:31 PM EDT

You can reach Rich Tandler by email at WarpathInsiders@comcast.net

Over the weekend, two almost identical articles by Pete Prisco of CBS Sportsline and Len Pasquarelli of ESPN.com came to almost identical conclusions in regards to the Redskins salary cap situation. They both claimed to have talked to a trio of cap experts from various places and these experts told them that the Redskins were in a cap situation that was so untenable that they may be forced to make drastic cuts to get under the cap. The Redskins, they say, may be forced to play the 2006 season with 15-20 rookies making the minimum in order to get in compliance with the cap rules. There would have to be an unprecedented bloodbath in regards to the roster.

As those two writers are notorious for their frequent anti-Redskins biases, their pieces were immediately met with derision from all around Redskins nation. “There they go again,” was the common refrain.

Well, this observer, accused of being a homer far more often than he’s called anti-Redskins, is here to tell you that, as painful as it may be to say it, what Pete and Lenny said is by and large true. If there is no extension of the collective bargaining agreement (CBA) before the free agency period begins on March 3, the Redskins will officially take up residence in the dreaded cap hell. The Redskins took a gamble and, as of right now, it looks as though they may well lose it.

The gamble they took was to insert roster bonuses into the contracts signed by Marcus Washington, Clinton Portis, and others. Since these bonuses are not guaranteed, they all count towards the 2006 salary cap, pushing it up to a number that is some $20 million over the limit, which will likely come in at $95 million.

The Redskins had to structure those deals in that way in order to make them acceptable under the current collective bargaining agreement between the NFL and the NFL Players Association. The gamble that they took was that the CBA would be extended and revised before the ’06 free agency season began. That would allow them to guarantee the roster bonuses for those players, meaning that they could spread out the impact over the life of the contract. That would, for example, lower Shawn Springs’ cap number by some $2.3 million, Portis’ by $2.25 million. The cap savings by this accounting procedure would total $15 million. The rest of the overage could easily be handled by cutting some fringe players and restructuring some other contracts.

It was a reasonable gamble at the time the contracts were drawn up. The NFL and the NFLPA have never before gone to the brink of an uncapped year, which is what 2007 would be under the current CBA, before extending the agreement. However, we find ourselves about 10 days before free agency starts and a CBA extension does not appear to be imminent. In Sunday’s Washington Post an NFLPA representative said that the chances of reaching a deal were not very good. That doesn’t mean that it can’t happen or won’t happen. It means that every minute that passes without a new agreement pushes the Redskins a minute closer to entering cap hell.

Without a CBA extension the Redskins will need some very creative measures, some very painful decisions and/or some unprecedented cooperation by many players to get under the cap. There will be an article here Tuesday on WarpathInsiders.com that will look at some creative options. Right now, though, let’s focus on the latter two.

One of the problems with cutting players is that with the contracts structured as they are and the fact that most of the contracts are pretty new, there isn’t much money to be saved in releasing a lot of players with big camp numbers. For example, LaVar Arrington counts about $12 million towards the ’06 cap, but releasing him would result in a slightly higher cap charge than that because of uncharged money already paid to him. It’s like being upside down on a car loan, when the car is worth less than the payoff amount. Cutting Arrington would the put Redskins further away from the goal of being able to get under the cap. The same is true of such players who might be considered expendable in a crisis such as Mark Brunell and Davis Patten.

Now, to be sure, there are players that the team could release that actually could save money. Some of these players are ones that the Redskins would rather not cut such as Marcus Washington, Ladell Betts, Jon Jansen and Joe Salave’a. However, the Redskins could cut those four plus Taylor Jacobs, Renaldo Wynn, Pierson Prioleau, Philip Daniels, James Thrash, Cory Raymer, John Hall, Patrick Ramsey, Walt Harris, and Matt Bowen and still be about $8 million shy of being able to make it under the cap.

To realize the maximum cap savings, which are obviously necessary, these players would have to be replaced with rookies earning the minimum salary. Thus the “15-20 rookies” alluded to by Prisco and Pasquerelli.

The Redskins will not release all of the players on the list above. To make up the difference and to clear the remaining cap space they will have to restructure some contracts and, in the process, ask some players to give back real money.

This doesn’t happen very often. Usually when you hear about a player redoing his contract to help the team create cap room he doesn’t give up a dime. It’s usually just a matter of deferring something or guaranteeing all or part of a salary to spread out the cap hit. The player is not, as many believe, “taking one for the team” when he cooperates in such restructurings.

But it appears that if the Redskins are going to be able to scrape under the cap without losing some key players in the prime of their careers some players are going to have to take a pay cut, plain and simple. And if they don’t, well, the Redskins will enter another level of hell altogether.

Again, more on that in an article here on Tuesday. The point here is to tell you that, without a CBA extension, Chicken Little (and Pete and Lenny) will be right. The sky will be falling. A whole slew of players that have been solid contributors will be gone. There will be so many young players on the roster that the team mascot will have to be changed to Barney. The Redskins won’t be able to afford any free agents; heck, they won’t be able to afford cab fare for a free agent from Dulles to Redskins Park.

There is the possibility that a CBA extension will get done and none of this will have to happen. It’s very difficult to assess the chances of that happening; it may not look good now but a breakthrough in the negotiations could occur at any time. But if it doesn’t, well, things will get ugly. If you’re a Redskins fan, keep your fingers crossed, hang a horseshoe in a appropriate spot, be on the lookout for four-leaf clovers, or whatever you do to try to bring on good luck. This isn’t typical media anti-Redskins spin.

It’s the real thing.

  1. Anonymous - Feb 21, 2006 at 3:25 PM

    Rich,
    Any idea about how many other teams would potentially be hurt if the CBA isn’t done? The Redskins can’t be the only one. If there are enough teams that could get hammered by this problem, and it becomes enough of an issue, then perhaps NFL will recognize this as a bad thing and find some solution.

  2. Anonymous - Feb 21, 2006 at 11:21 PM

    If the CBA isn’t extended, won’t this become an uncapped year, and help the skins tremendously?

  3. Anonymous - Feb 22, 2006 at 10:50 AM

    No, 2007 would become an uncapped year.

  4. Joe - Feb 22, 2006 at 11:30 AM

    I don’t know if I’d call this “cap hell.” It sounds like we might lose a lot of veteran players that we all like. It will be very disappointing to see those guys continue their careers elsewhere. However, if the intention is to get to an uncapped system, then 2006 will be the bitter pill that we have to swallow. Once 2007 rolls around Snyder will be able to spend any amount that is needed to keep the “Core Redskins.” Clearly, an uncapped system benefits the Redskins.

    Personally, I don’t think Snyder’s intention is to have an uncapped system. I think he just wants the Bengals and Bills to keep their hands out of his pockets. To accomplish that, Snyder has to show that he’s willing to suffer through 2006 to get to an uncapped system. If the low revenue teams believe him, then hopefully they’ll back off their demands for his local revenue.

    I have to imagine that there will be some sort of compromise before March 3. But if it doesn’t happen by then, and the Skins have to start cutting players, there will be no incentive to ever discuss revenue-sharing again.

  5. Anonymous - Feb 22, 2006 at 8:32 PM

    conceptually, if there’s no new CBA, so the redskins, would also have a problem, there would also be conceptually an uncapped year the following year.

    So, couldn’t the redskins simply restructure all the contracts, to the minimum with the conception that the following year, the sallaries could rise tremendously, perhaps throw a signing bonus into the equation to make it worthwhile to the player.

    Now, restructering so many contracts, could be difficult, but would it horribly be so? Or if they restructure contracts, does that make the entire current signing bonus come due, thereby making the situation worse?

  6. Rich Tandler - Feb 23, 2006 at 12:58 AM

    Thanks for your comments, all. Sorry it’s taken me a couple of days to get back to them.

    The Redskins and Chiefs would have the toughest time getting under if there’s no new CBA. About half the teams in the league are over, but most of them have some spare parts that they can cut (see the Jets and Ty Law) and they can get under. It’s a bad thing for the NFL for other reasons, but only the Skins and the Chiefs need to get it done to help get under the cap.

    Good points, Joe, but keep in mind that many of the veteran players will have to be replaced by rookies making the minimum.

    And, no, you can’t pack money into an uncapped ’07. See the reference to the 30% rule in the article. Players aren’t going to give up guaranteed money for a promise of riches next year. It’s not a fiscally responsible thing to do.

  7. Anonymous - Feb 24, 2006 at 3:11 AM

    rich, my comment was more along the lines of, sign them to a long term minimum contract, w/ a huge signing bonus to make up the shortfall (so that the guaranteed money is there). This would lower the cap hit, but give them the guaranteed money, this year. Then you can renogitiate in the uncapped year to make things sane again?

    or would the end of the CBA cause signing bonus to not pro-rate over the length of the contract?

    I can’t believe there’s not a way to correct things, it just has to be worthwhile to the player.

  8. Rich Tandler - Feb 24, 2006 at 7:26 AM

    Under the current CBA, you can only spread out a signing bonus over four years instead of the maximum of seven so that and the 30% rule would, for the most part, preclude doing something like that.

    That doesn’t mean that there’s not a way to get it done. The capologist at my site has come up with a way to make it happen, it’s a free article at WarpathInsiders.com.

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