2018 Salary Cap Analysis

[Deleted member 6794]

Time to make the donuts again.

We have now a stable picture with more clarity and a better understanding of the details.

2018 BIG PICTURE

Current 2018 cap space for the top 51 according to the NFLPA is approximatedly $10.8 mil ("Cap Room") compared to approximately $10.9 mil about a week ago. This suggests Joey Mbu is included in the top 51, bumping off another player out of the 51 who had a cap number about $100,000 less than his.

https://www.nflpa.com/public-salary-cap-report

From recent analysis, I've concluded that spotrac.com and overthecap.com should not be referenced for this number or other aggregate numbers.

Using the NLFP data and this source https://www.packersnews.com/story/s...ary-cap-space-entering-free-agency/410810002/ here's the aggregate basic math:

(1) NFLPA 2018 total available cap from the above link = $177.2 mil NFL cap + $3.9 mil carryover + $4.0 mil in unidentified credits and adjustments = $185.2 mil

[While we do not know precisely the nature of the credits and adjustments, one component appears to be "likely to be earned" 2017 incentives that were not earned that are "rebated" prior to the start of the 2018 league year. An example would be per game bonues not earned.]

(2) NFLPA "Prior Year Carryover" = $3.9 mil

(3) NFLPA "Team Cap" = $173.7 mil

(4) Dead Cap + any late adjustments (see Goodson in the above link as a possible example) = $7.6 mil (derived)

(1) = (2) + (3) +(4)

We can also derive the current top 51 cap committments without referring to spotrac or overthecap:

$185.2 total available cap - $10.8 mil remaining cap space - $7.6 mil dead cap + any late adjustments = $166.8 mil top 51 cap commitments

For what it's worth, this top 51 cap commitment number syncs fairly closely to overthecap ($165.5 mil) and spotrac ($165.8 mil), but the $166.8 mil should be deemed more accurate. We'll come back to this cap commitment later.

2018 REMAINING CAP FLEXIBILITY

Players 52 and 53 must be subtracted from cap space: $1.2 mil

The practice squad subtraction is at a minimum 10 players x 17 weeks x $7,600= $1.3 mil + $76,000 per playoff week. I'll us $1.5 mil for this number.

PUP and IR players count against the cap as well as their replacements on the 53 man roster, so some cap can be expected to be held in reserve for these eventualities. If the replacements are minimum salary rookies, the cap cost is about $500,000 per full season equivalent. I'll use $3 million as the reserve. 6 full season rookie equivalents is a healthy number, however you don't know if going to the street for a Howard Green might be called for. Unused reserve carries over to 2019.

Releasing certain players would generate cap savings, Bulaga being the most significant possible example, though that outcome is unknown and clearly dependent on his ability to play. Conversely, releasing a player whose dead cap exceeds his cap savings would bite into the cap, though I do not see any likely candidates in this category. I'll treat these as net zero considerations until events dictate otherwise.

These practical considerations reduces the NFLPA $10.8 cap room cited above to $5.1 usable for additional signings. It's still possible an Ahmad Brooks or Jahri Evans type signing is possible if injury or unsatisfactory performance requires shoring up a position or two.

Anything used now is that much less that cannot be carried over.

2019 OUTLOOK

If your expectation is, "make the playoffs and see what happens", then you can stop here.

My personal view is if the Packers win the Superbowl this season, then I can tolerate some roster rebuilding and year or two of retrenching if that's what's required. If they do not win, then that ultimate goal carries over to 2019 and we return to the annual FA and draft gnashing of teeth in fixing what went wrong. I certainly hope to be wrong, but I do not think this roster is championship caliber. Too much hangs on too many vets returning to former glories, or close to it, while too many first contract players must elevate. It could all come together at the end, but I don't expect it.

Though the NFLPA does supply existing 2019 contractual cap commitments, spotrac shows $152.3 mil for 52 players, or for 2018 apples to 2019 oranges, $151.7 mil in current 2019 top 51 cap commitments. This agrees closely with overthecap's $151.9 mil. Split the difference at $151.8 mil.

Note that the 2019 top 51 committments are only $15 mil less than the current ones, while the 2019 numbers do not include the following free agents:

http://www.spotrac.com/nfl/free-agents/2019/green-bay-packers/available/

I find this inauspicious. One can argue the cap will go up $10 mil or so, increasing the cost differential between the two rosters to $25 mil. However, the cost of valued free agents keeps going up at what seems to be a higher percentage rate than the salary cap increase percentage. The rich get richer, etc. etc. And if you do not win in 2018, the FA replacements need to be better than the guys replaced. Re-signing some of them to lesser amounts than currently does not improve the overall talent level. And the $25 mil could be a much lesser amount if Rodgers is renegotiated. The other possibility is that a sufficient number of first contract players ascend to a level of play sufficiently above their pay to compensate for losses. That's a highly optimistic view.

RODGERS CONTRACT WILDCARD

The 2019 numbers assume Rodgers plays under his current contract for 2019 with a cap number of $21.1 mil.

As noted previously, a scenario where, for example 5 years are added to the existing contract with a $100 mil signing bonus is untenable. This was the form of his last extension with smaller numbers. The signing bonus cap hit would be allocated over 2018 - 2022 at $20 mil per year. Not only would that put the Packers $9 mil over the cap right now before further necessary subtractions requiring some significant cuts to clear cap, it adds another $20 mil to the 2019 commitments.

What about just guaranteeing 2018 and 2019, no signing bonus, with the payoff coming is large, guaranteed amounts over the first few of the additional 5 years. For the total 7 years to average $35 mil, those back 5 years would need to average about $41 mil per year. To get to $35 mil per year over 3 years to stay at or near the top of the heap over that period, 2020 baloons to $63 mil. While this might seem palatable in the "2020 is too far out to consider" viewpoint, which I mostly share, that's a prohibitive baloon number while Rodgers might not be to keen on having to wait 2 years to see any of the raise in his pocket. Even still, $35 mil per is too low if keeping up with top earners as he goes along is in fact a negotiatiating point.

Rewriting the last two years of the current deal into a 7 new year deal could create a "cap friendly" structure with that $100 mil signing bonus and $1 mil in salary the first two years. That's break even cap-wise in 2018 and 2019, But the balooning of cap obligations starts in 2020 with very, very large amounts, something the Packers may not wish to look forward too.

Anything that involves something on the order of a $100 million signing bonus to defer as much cap hit as possible raises the question as to whether the Green Bay Packers, Inc. have that cash sum available not already committed to projected needs and reserve.

The overall picture improves if Rodgers is made to finish out the contract and then use the franchise tag in 2020 if performance warrants. I would not be averse to adding a very large "unlikely to be earned" incentive tied to winning the Superbowl to the existing contract for years 2018 and 2019. That probably wouldn't be all that appealing to any player given that outcome is largely out of his control. But it would be better than nothing, and something I believe most would be happy to pay if earned.

Just two short notes regarding your detailed analysis.

Money paid out to players during the playoffs doesn't result in an additional cap hit.

Hopefully Rodgers isn't seeking $35 million a season.

All of this got me to thinking, what happens if fans that left the game last year, don’t come back? What are the NFL revenue numbers going to look like then? There are some very intriguing scenarios that could affect free agency/salary cap/player contract structures etc.

The current TV deal, which runs through the 2022 season, is the main reason the salary cap has increased significantly over the past few years. With those numbers escalating to $3.1 billion during the final year I expect the cap to continue raising.

 

[PikeBadger]

Just two short notes regarding your detailed analysis.

Money paid out to players during the playoffs doesn't result in an additional cap hit.

Hopefully Rodgers isn't seeking $35 million a season.



The current TV deal, which runs through the 2022 season, is the main reason the salary cap has increased significantly over the past few years. With those numbers escalating to $3.1 billion during the final year I expect the cap to continue raising.

If they don’t come back then it would reflect in the next TV contract I guess. The league office has some work to do to clean up the mess.

 

[Deleted member 6794]

If they don’t come back then it would reflect in the next TV contract I guess.

True, the networks would most likely offer less money in a new deal after the 2022 season if the ratings continue to drop.

 

[PikeBadger]

It's based on TV contracts and I'm not sure when those will be renegotiated or expire. Eventually dropping viewership could affect this, but I do not think it's a linear relationship. There are a lot of things competing for our eyeballs and with so many things being viewed online, without commercials and "on demand" any time advertisers can have a larger captive audience, those are dollars better invested. NFL football games most likely will still draw huge money, even if viewership overall is down. the concentration of viewers at that time will be much higher than a lot of other programing where 10,000 people might be watching at any hour of any day.

regardless, most of the people I see talking about the non football issue are people that never took time out of a Sunday to watch a game anyway. Don't get me wrong, football has it's obstacles to retain fan viewers and some of this could blow up, but so far, a lot has been hot air. Nobody I know has stopped following football that actually followed football before. Some say they have, yet they know what's going on with Rodgers and his contract, or that we drafted 3 WR that are tall and fast.

Just the opposite with me. The majority of people over 50 that I’ve talked to quit watching the NFL last year. Disclaimer: I live in a state where college football is more popular than pro football.

 

[HardRightEdge]

2019 Cap - we are in the exact middle of the league right now for 2019 cap liabilities. The 14 expiring contracts is not alarming to me at all. We are in better shape than just about everyone else in the league. The only team I could find with less free agents is the LA Chargers with 12. Actually found a couple of Super Bowl teams with more than 30. The big unknown at this point is as you stated, the Rodgers contract restructure. All of this got me to thinking, what happens if fans that left the game last year, don’t come back? What are the NFL revenue numbers going to look like then? There are some very intriguing scenarios that could affect free agency/salary cap/player contract structures etc.

"Middle of the league", on its face, is never auspicious. While one can note Philly's top 51 is currently $32 mil over the cap for 2019 relative to a $187 mil cap, on the other hand the Rams are $72 mil under that cap. Then one has to get into the weeds on who the FA's are, what re-signings or FA replacements would cost, and how promising their first contract bench players might be. That's a lot of weeds I'm neither prepared nor inclined to wade into than other than to note the well-publicized Aaron Donald impending contract and that at least in both case their QBs are under contract already for 2019.

I come at it from the perspective of whether the Packers look to me like a championship team now and, if not, what might be required to make it so the following year and what that might cost. From the "now" perspective, I'm not seeing it. Of course a 10 win playoff team is always the minimum expectation, but Packer teams better than this have not made it through the playoff slog. There are too many question marks: an overhaul of of the D-backfield with rookies and second year players (King and Jones) with disappointing rookie seasons under theit belts, coverage ILB, backups for injury prone OLBs, the right side of the O-Line, the #2 wideout. Then there's the question of whether Rodgers can still make all of the Rodgers throws, such as those move-right-throw-left bullets from 3/4.

This year's cap cost for Graham, Wilkerson, Williams and Lewis is about $13 mil, two or three of which may be rotational players, just to plug other holes. Graham and Williams cap costs go to $12.7 mil and $6.4 mil in 2019 with $8.9 mil dead cap between them, which reflects the true 2 year cost to plug those holes. Wilkerson and Lewis will be gone. A Wilkerson resurgence is being counted on to improve the pass rush; if he does in fact resurge and the win is not achieved, that cost will go up just to stay in place.

Then we pile on top of that Matthews, Cobb and Clinton-Dix FAs in 2019 in addition to Wilkerson. Then you have a couple of possible core players in Clark and Martinez who might be looking for that post-3rd. year extension in the "who else yah got" equation.

From 30,000 feet, the key to winning is getting performance equal to cap cost from vets and performance well above cap from first contract players. That requires stacking good drafts. That has not happened.

If nothing else, this picture goes toward illustrating why Rodgers does not yet have a contract that many assumed would have happened by now. Management might also share my concern as to whether Rodgers can still make all the throws justifying the kind of money being talked about. If "pay the man" was the #1 priority, the Packers would not have signed most of those FAs, would not have made that offer to Fuller, and would have gone to a 2 year plan. The cornerback draft was Plan B, not Plan A, in a kind of hedged approach.

I'm not critical at all of this draft; I think those first two picks get an A grade and have the best potential since the Matthews/Raji draft when considering the bonus 1st. rounder next season. But it was Plan B. Plan A in my opinion, expecially given the organizational overhaul that reaches from the President's responsibilites down to the roles of assistant coaches, is to get back to the playoffs now. Clearly, the perception was there was a lot more wrong with last season than just Rodgers absence.

As for the future of the salary cap, I thought during the 2016 fall off in ratings we would have seen the impact by now from declining ad revenue. Not so. It's pretty evident the cable and dish companies see the NFL as a key defense against cord cutting and will pay up at the expense of margins. Futher, the NFL keeps layering on-line and mobile contracts for supplemental revenue. I'm sure they're pleased as punch with the Supreme Court ruling opening up legalized betting. At the least, it should add more eyeball hours of viewership. At the most, they may secure licensing rights and revenue from the bookies.

It's starting to look like the cap increases will continue on pace until the new CBA after 2020.

 

[HardRightEdge]

Thanks, HRE. And thanks for all of your time and effort on the cap.

Despite my less than sanguine outlook, there is a silver lining. That's likely to be the last full-blown breakdown for a while for readers to slog through.

 

[HardRightEdge]

A note on TV ratings and revenue:

The ratings for the last couple of Olympics were disappointing and the network rebates to advertisers were well publicized. What I don't recall reading is whether the Olympic committee in turn had to pay rebates back to the networks in kind though one would expect networks to try to negotiate that point.

I have not heard of NFL networks rebating advertisers and the chart in the following link explains why, at least for the 2016 season:

https://www.recode.net/2017/9/6/16260498/nfl-season-2017-advertising-ads-prices-decreased-viewership

While the regular season ad spend declined in 2017 by 1.2%, that's far less than the 2 year decline in ratings would justify.

https://www.fiercecable.com/video/nfl-tv-ad-spending-down-1-2-for-2017-season

And that's just the regular season. The playoffs and especially the Superbowl may have put the ad spend in positive territory.

Even with a decline in viewership, there isn't much argument that the NFL remains the most valued property in all of broadcast media. While the slowing growth in ad spend would be concerning, there isn't much to suggest the NFL is being impacted with yet another $10 billion growth in cap. If memory serves, the players share is heavily skewed toward TV revenue, which further reinforces that picture. Given the high demand for NFL rights, it would not surprise me if the there are no NFL rebate provisions in these contracts if ad spend slides.

Cord cutting is such a threat to cable and dish business models, I would not be surprised if they would tolerate this property as a loss leader if it means slowing the bleed in subscribers.

Then there are new sources of revenue. As noted in passing in a previous post, new money from on-line and mobile is coming in. Check out this $500 million per year deal reported toward the end of the the 2-year lackluster ratings period:

https://www.cbssports.com/nfl/news/...eal-that-should-make-mobile-streaming-easier/

Even if the NFL is paying some rebates to networks they're making it up and then some in other areas.

Also, there's the question of whether the NFL will be able to extract licensing fees from the newly authorized nationwide legalized betting. Even if the bookies balk, expect the NFL to take them to court. Extracting an additional pound of flesh may be in the works.

Add it all up and it looks like free sailing into the post-2020 CBA.

 

[Deleted member 6794]

While the slowing growth in ad spend would be concerning, there isn't much to suggest the NFL is being impacted with yet another $10 billion growth in cap.

If the cap increases by $10 billion for next season the Packers shouldn't have any issue signing Rodgers to a cap friendly extension

 

[HardRightEdge]

If the cap increases by $10 billion for next season the Packers shouldn't have any issue signing Rodgers to a cap friendly extension

...with being the operable expression.

 

[HardRightEdge]

True, the networks would most likely offer less money in a new deal after the 2022 season if the ratings continue to drop.

The post-2020 CBA negotiation should be interesting. That's far enough in the future that I'm barely willing to contemplate the ramifications, but with a lot of media contracts expiring in 2021-2022 time frame, projecting revenue should be a major sticking point with owners trying to project a less than rosy scenario and the players arguing the opposite.

 

[HardRightEdge]

Money paid out to players during the playoffs doesn't result in an additional cap hit.

Hopefully Rodgers isn't seeking $35 million a season.

Thanks for the playoff note. Pretty sure I knew that but forgot. It is a trivial amount in the above analysis pretaining to PS weekly pay.

We do not know what Rodgers is looking for. He made a passing comment last year that he thinks he's due for raise. We do not know anything beyond that but rumor and speculation. Management says "soon", but that's vague enough as to mean anything prior to the end of next season. And wanting and doing are two different things.

Rodgers bought a piece of the Bucks. Rodgers' recently retired girlfriend is from Beloit and she seems seems to be a more down-to-earth better fit than the mercurial previous one. Marriage and kids? Who knows. If so, that's a further connection to the region.

If Rodgers view of his post-football future is expansive and tied to the region, that would be a reason to temper demands so as not to appear as a d*ck. To take one example, the rumored demand for option clauses to all but guarantee he remains the highest paid player, that would appear to be highly d*ck-like regionally if in retrospect that onerous drain on cap results in not getting that second championship for the current millenium and dampen any further ambitions in the region. I would share in that assessment were it to transpire as such.

So, there's another blind conjecture to chew on.

 

[HardRightEdge]

Considering that I haven't seen many teams getting themselves into too much trouble with the league (Dallas and Washington in 2012?) in regards to the cap, as well as Ball historically doing a great job with the cap, I'm not going to lose much sleep over it. Fun conversation, but it reminds me of trying to figure out what compensatory picks we will or won't get.....sometimes very fuzzy math.

Dallas and Washington got in trouble over the uncapped 2010 season. That prior CBA had no cap for 2010 which, as an aside, accrued to the Packers advantage that season taking on one of the highest player expense totals in the league, second highest if memory serves.

Despite that year being uncapped, the league had some rules in place to prevent rich teams going wild and abusing the core principle of "competitive balance". Dallas and Washington violated those rules and got fined. I think we've gone over this before.

I always wondered how the Packers avoided that fate. It may have been because of the very high number of IR players that year with the additional cost of replacements being an exemption or some other arcane consideration.

Today, mechanisms are in place to make it impossible to go over the cap once the league year starts. From the start of the league year, ususally in early March, up to final cut downs just before opening day, the top 51 players must be under the team's cap. From opening day to the end of the season, a team's 53 man roster, PS, PUP and IR players, and any dead cap, i.e., everybody, must come in under the team cap.

The league office approves all contracts. If a contract puts a team over the cap during the league year that contract will not be approved. Everybody by definition must be under their cap during the league year.

Now, Philly is some $30 mil over the cap for 2019. That's OK because it's outside the current league year. Their 2019 cap obligations will have to be reduced to an amount under their 2019 cap space by the start of the league year next March. Period.

Now, I imagine through some incompetence Philly could be slow-footed in cutting the guys needed to get under that 2019 cap space in time for the start of the 2019 league year. The league is not going pick players to be cut to get them under the required amount. Then a fine would be in order, money or picks or whatever the CBA calls for. This doesn't happen.

 

[HardRightEdge]

That was in reply to your thought this isnt a contending team. If it turns not to be, the guys we have signed are expendable. If we are contending, there isnt much a problem.

First, I did not say this is not a "contending" team. I would expect 10 wins which puts them in that category. I do not consider it a "championship caliber" team, one that has the characteristics that put it at the top of the heap.

After a few weeks last season I commented on how New England's defense didn't have what was required, the Rams and some other early contenders didn't seem to have all the peices, the Packers included, that Philly looked like the clear favorite. I don't know how to explain it other than to say they had "the look". And they were actually so good as to get it done with a backup QB. In my book, that qualifies as "championship caliber".

This Packer team is not that in a typical season. It could change with the rapid ascension of a number of first contract players by playoff time. Maybe a flurry of contenders lose their QBs or other key players to injury opening the door. That's wishful thinking, though. It would be my wish, but not my expectation. But as for the injury part, the winning part is the wish but I don't celebrate injuries to anybody, Packer or otherwise. You have to expect your best to beat their best, and that is as it should be.

 

[HardRightEdge]

The Packers could restructure the contract of either Matthews or Cobb as well.

Did you inadvertantly omit the ?

I think that train has left the station if it was ever boarding in the first place. First, players can say "no". And really how much would there be to gain for 2019 without a "cap friendly" rewrite of the current year extending out to 3 years or more? The best you could do is take the current year cap hit and spread it over two years with signing bonuses that have to be paid for in cap in the years following. Those kinds of moves would have made sense if they could have been negotiated back in the FA period to use the cap savings to double down on "win now" with some additional free agent signings. It's a little late for that. At this juncture, under a two year plan, if you don't win in 2018 then you're doubling down with the same players in 2019, with no net cap savings, and less than auspicious prospects that they will be playing at or near the past glories that are needed.

At this juncture, better to bet on a return to those past glories this season under these deals as a path to winning. If you do win, then the adverse 2019 consequences of them entering FA can be accepted. If you don't win and those players past glories are not achieved, the consequences of the extensions are worse than if you had stood pat. Their dead caps would make moving on from those players prohibitive just as if the Graham move turns out to be a bust you're stuck with him next season.

The more likely source of a cap gain would be with Bulaga. There's the report he was asked to renegotiate and declined. There's a packers.com report that Spriggs spent the offseason in Green Bay bulking up to 32o lbs. The effort is in contrast to McCarthy taking a veiled shot at his work ethic in the early part of last season. This comes on the back of improved play toward the end of last season. Evidently the dislocated knee cap was not as serious as it sounded.

While there are plenting of question marks surrounding his play and development, if this one player shows he's panning out in preseason (as opposed to assuming a whole bunch will in the rosiest scenarios), and Bulaga is not ready to play, the two remaining years on Bulaga's contract contain $11.5 million in cap savings that would accrue to 2019 assuming they don't run out and use it in 2018 for other players. That would improve the picture.

 

[HardRightEdge]

If the cap increases by $10 billion for next season the Packers shouldn't have any issue signing Rodgers to a cap friendly extension

I'd say that was more of or gaffe than a , but duly noted.

 

[Deleted member 6794]

The post-2020 CBA negotiation should be interesting. That's far enough in the future that I'm barely willing to contemplate the ramifications, but with a lot of media contracts expiring in 2021-2022 time frame, projecting revenue should be a major sticking point with owners trying to project a less than rosy scenario and the players arguing the opposite.

I'm curious if the owners are interested to get a TV deal extension done before negotiated a new CBA or vice versa.

Dallas and Washington got in trouble over the uncapped 2010 season. That prior CBA had no cap for 2010 which, as an aside, accrued to the Packers advantage that season taking on one of the highest player expense totals in the league, second highest if memory serves.

The Packers had the seventh highest payroll as of mid-September in 2010 with Washington and Dallas clearly spending more than any other team in the lesgue that year.

Here's a link to the numbers I found:

https://profootballtalk.nbcsports.c...alary-cap-numbers-if-there-were-a-salary-cap/

I think that train has left the station if it was ever boarding in the first place. Those kinds of moves would have made sense if they could have been negotiated back in the FA period to use the cap savings to double down on "win now" with some additional free agent signings. It's a little late for that.

While there are plenting of question marks surrounding his play and development, if this one player shows he's panning out in preseason (as opposed to assuming a whole bunch will in the rosiest scenarios), and Bulaga is not ready to play, the two remaining years on Bulaga's contract contain $11.5 million in cap savings that would accrue to 2019 assuming they don't run out and use it in 2018 for other players. That would improve the picture.

I wrote the post you replied to at the start of April. It's true that it's all but a given that it's too late to renegotiate the contracts of either Matthews or Cobb at this point.

FWIW the Packers would actually save close to $13 million in cap space over the next two seasons by releasing Bulaga before the start of this one.