NFL’s New Television Deal Likely Behind Teams Willingness to Restructure Contracts
It has become an NFL ritual, right before free agency opens, teams scramble to get under the salary cap and clear room to sign free agents. It usually means that teams will release players in order to create the space, but this off-season there was much more of a willingness by teams to restructure contracts rather than outright cutting a player and the reason might be very simple.
The salary cap is expected to go up in 2014. And not just up like it does every season, but significantly higher than normal because of the upcoming television deal contract that kicks in in 2014. That deal is expected to push the salary cap much higher than the two percent it moved this season and although there are no speculations at how high the number might be, it is supposed to be a significant jump.
Teams who have restructured contracts for players and converted their salaries into ‘bonus’ money, a higher salary cap down the road may cancel out the hefty cap charge at the end of a contract. For instance, when the Dallas Cowboys restructured Brandon Carr’s contract a few days ago, they paid a big chunk of his bonus money up front for this season and reduced his salary for the year, which lowered his cap number. Carr will still get all of his money but the Cowboys have added a higher cap charge to end of his deal because the bonus money is guaranteed and is spread out through the life of the contract. The same goes for Tom Brady’s new deal.
So while it looks like these players are taking less money, they are actually still getting the same amount or more but they are lowering their cap hit for this season and teams will pay more in the last few years of the contracts. It’s been common for teams to use this type of tactic in the past but it appears as though it was used much more this off-season.
NFL teams aren’t stupid and while it appears that some of these teams have crippled themselves in the future by restructuring contracts now, it looks like they are gambling that the salary cap will grow to a point where it won’t cost them as much as it could. Everyone knows that television deals are a huge part of sports and the NFL gets ratings better than any other sport, so it makes sense the new TV deal will boost the salary cap.
It may seem like your favorite team made a mistake by pushing money into the future but that isn’t likely to be the case. The salary cap is about get much higher in 2014 and beyond, so maybe your team knew what they were doing all along.
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