Agent's Take: Five suggested changes to the next NFL collective bargaining agreement
Here are five things I believe should be changed in the next CBA
A work stoppage in 2021, once the current collective bargaining agreement (CBA) between the NFL and the NFLPA expires, has seemed inevitable because of Commissioner Roger Goodell and union executive director DeMaurice Smith's icy relationship. A lack of trust has defined the interactions of the two sides practically since the CBA was ratified in August 2011.
Surprisingly, reports of optimism about a new labor agreement being reached before the existing one expires have started surfacing. Preliminary discussions reportedly have been positive.
The current CBA has been consistently characterized as owner or team friendly. Goodell's broad powers over player discipline have long been a source for frustration for players. He has been described as judge, jury and executioner in this regard. Although Goodell has gotten plenty of criticism for seemingly applying punishments in an arbitrary manner, focusing on curbing his disciplinary power would be playing into the owners' hands. Areas where the players' side should try to make gains ought to be largely economic.
Ideally, franchise and transition designations would be abolished. The franchise tag is a powerful management tool that hinders players from getting fair market value and can depress salaries. It only directly affects a handful of players annually but the impact on salaries isn't limited to just the recipients.
Abolishment simply isn't going to happen in the next CBA. The designations have been in every labor agreement since the 1993 CBA implemented a system for unrestricted free agency. The NFLPA should have bigger priorities that can benefit players economically than the designation system during next round of labor negotiations.
Improve revenue split
Owners accomplished their main objective of reducing player costs in the current CBA. This was achieved by lowering the players' share of league revenues to an average of 47 percent during the ten years of the labor agreement. Most importantly, the players are getting 55 percent of league media (radio, television, etc.) with smaller percentage of other revenue streams. The overall split under the 2006 CBA was essentially 50/50. Getting the percentage up even incrementally would be consequential, particularly from league media, considering the NFL is targeting $25 billion in league revenue by 2027. Revenue was last estimated to be $14 billion. At the very least, pushing for a significant inclusion of new revenue streams, especially from gambling, should be part of the union's equation.
Modifying spending minimums
The CBA requires each team to spend 89 percent of the salary cap in cash over the four year periods of 2013 through 2016 and 2017 through 2020. The league wide spending must be 95 percent of the salary cap in cash during these same periods.
These spending minimums were met during the first four year period. Four teams, the Bills, Colts, Cowboys and Texans, reportedly are under the 89 percent threshold at the halfway mark of the second four-year period.
Four years is entirely too long of a timeframe to calculate spending requirements. The period should be reduced to two years, if not annually.
A new feature of the current CBA is the ability to carry over unused salary cap room from one league year to the next. This results in each team's actual salary cap (known as adjusted salary cap) differing from the salary cap set by the NFL, which is $188.2 million for the 2019 league year. Teams rarely carry over less than the full amount of the surplus. The average adjusted salary cap for teams in the 2018 league year was $188.71 million according to NFLPA data while the league wide figure or unadjusted salary cap was $177.2 million.
This fundamental change from previous CBAs has led to some teams annually having an abundance of cap room. For example, the Browns carried over $56.58 million of unused cap room from the 2018 league year after rolling over $50.12 million and $58.91 million of cap space from the 2016 and 2017 league years.
Spending shouldn't be based off the league wide salary cap. It should be derived from each team's actual adjusted salary cap.
The 95 percent spending minimum works better in theory than in practice. Since it's based off collective league wide spending, the higher spending teams can offset the lower spending ones in order to meet the threshold. It would be more beneficial to the players for each team to be required to reach a league wide spending threshold during the designated timeframe.
Some or all of these changes would force more team spending. A byproduct might be the beginning of a return of the incredibly shrinking NFL middle class.
Elimination of funding rules
Contrary to popular belief, guaranteed contracts in MLB and the NBA aren't collectively bargained. Guaranteed contracts became customary in these sports because of individual players exploiting leverage in contract negotiations.
The CBA requires that a team must place into an escrow account the amount of any guarantees in a contract other than those just for injury. The archaic funding requirement of guarantees in future contract years made sense in a different era when there were legitimate concerns about owners not being able to fulfill financial obligations. That hasn't been the case for quite awhile.
Teams use the funding rules as a convenient excuse as why something can't be done in player contract negotiations. I heard it on numerous occasions as an agent when negotiating contracts on behalf of clients. Now that I'm no longer an agent, a couple of team negotiators have told me that their owners have encouraged their use of the funding issue whenever it suits them.
The elimination of the funding requirement may not open the floodgates for guaranteed contracts in the NFL. It might first lead to an increase of guarantees in the later years of the contract. There would be one less impediment for either of these things since owners wouldn't be tying up money that could be put to other use.
Revamp rookie wage scale
Salaries at the top of NFL Draft were drastically reduced with the existing CBA implementing a rookie wage scale. Unproven commodities taken early in the draft were paid like Pro Bowlers without playing an NFL game. This was an easy sacrifice for the NFLPA since incoming players aren't considered a part of the union.
The latter years of these rookie contracts before the 2011 draft typically became unmanageable for teams when the players were highly productive because of astronomical cap numbers from earning close to the maximum value of a contract through salary escalators and incentives. This phenomenon led to immense leverage for the player where the extremely large cap numbers usually forced a team to re-set a positional market on an extension with a player friendly structure or let him become an unrestricted free agent once his rookie contract expired because use of a franchise tag was impractical. The current system has practically eliminated these occurrences.
All contracts for draft choices are currently four years with specific salary parameters for each draft slot. Teams have an option for a fifth year with first round picks that must be exercised after the third year of the deal. The period for exercising fifth-year options begins when a player's third NFL regular season ends. These options must be picked up prior to May 3 of the fourth NFL season.
The fifth year is guaranteed for injury when the option is exercised. The option year becomes fully guaranteed on the first day of the league year in the fifth contract year (this upcoming March 13 for the 2015 first draft picks).
The fifth year salary for the top ten picks is the transition tender, which is average of the ten highest salaries, for a player's position in the fourth year of his contract. The fifth year salary for players selected outside of the top ten (picks 11-32) is the average of the third through twenty-fifth highest salaries at a player's position.
Third through seventh round picks have a base salary escalator for their fourth year based on participating in a minimum of 35% of the offensive or defensive plays, whichever is applicable, in two of the first three seasons of their deals or an average of at least 35% play time in their first three seasons. The salary equals the lowest restricted free agent tender in the fourth year. The 2019 salary for 2016 third through seventh round picks that earned the escalator is $2.025 million.
A draft pick isn't eligible to negotiate his rookie contract until the conclusion of his third regular season. It is now permissible for 2016 draftees to sign new deals.
The rookie wage scale may have swung the pendulum a little too far in the other direction. First round pick contracts should be reduced to four years. The contracts for all other rounds would be three years.
The renegotiation rules under the 2006 CBA should return with the one year reduction in the length of rookie contracts. Players were allowed to renegotiate after their second year. Rookie contracts signed under that CBA were grandfathered with the old timeframe. This is how 2010 Patriots draft picks Rob Gronkowski and Aaron Hernandez were able to sign extensions in 2012.
Without a fifth year option, the impact of the franchise tag is somewhat lessened because a player can hit the open market a year sooner at an earlier age if receiving multiple designations. Restricted free agency would become more meaningful because of the number of quality players drafted after the first round that potentially could be available to sign to offer sheets. It is now almost exclusively reserved for undrafted rookies since they are required to sign three-year rookie contracts.
If the fifth year option has to be kept, the salaries should be increased. For top ten picks, the franchise number seems more appropriate. The transition number could apply to the rest of the first round. The option year should be a firm commitment where it's fully guaranteed upon exercise. In most instances, teams have seen enough from a player after three years to know whether the fifth year would make sense financially.
Uniform guarantee language
Contract guarantees void for a laundry list of reasons (suspensions under a league policy or by the team for conduct detrimental, failing or refusing to play, practice or report to the team, etc.). The conditions vary depending on team convention, the attention the agent pays to the language and his/her leverage in negotiations. In some cases, fines can trigger the voiding on guarantees.
Signing bonus forfeiture language used to run the gamut before because it was left up to individual agents. The NFL and NFLPA agreed upon uniform conditions where bonuses could be forfeited in the 2006 CBA. The conditions were further defined in the current CBA.
Uniform language on the voiding of guarantees would eliminate rookie holdouts like Bears linebacker Roquan Smith's last year. 2018's eighth overall pick missed the first two weeks of training camp because he and his agents objected to language where the Bears had the right to void his guarantees for an ejection or suspension from a game for violating NFL playing rules. A compromise was reached on the number of games in a suspension necessary to trigger voiding.
There are other areas that should be revisited like the substance abuse policy. As attitudes about marijuana continue to change in this country where recreational use is increasingly becoming legal in states, eliminating the drug from testing may be in order.
All players on the 53-man roster should be active on game day instead the 46 man limitation. This change would make 46-man roster bonuses in existing contracts payable unless a player is suspended or put on a reserve list (injured reserved, non-football injury or illness, etc).
Expansion of post-career health care is another issue. Football players face different medical challenges than baseball and basketball players because of the violent nature of the sport.
A substantial overhaul of the CBA isn't realistic. Players don't have the leverage to do so. Even with a work stoppage, billionaires can outlast millionaires. That's been a recurring theme in the NBA, which has had more labor disruption than the NFL over the years.
Pushing for gains in key economic areas should be a top priority for the NFLPA. It will be interesting to see whether the 18 game regular season some owners have long desired would be a potential union concession to make progress elsewhere.
The NFL's biggest incentive for labor peace might be how it should be beneficial for the next TV and media rights deals that mostly expire after the 2022 season. Labor stability would allow the league to negotiate new deals sooner rather than later.
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