Salary Cap Analysis

[Schneed10]

Originally Posted by 70Chip

Third, if there is a new CBA and I realize the clock is ticking, the overall revenue pool will go up because of the demand from smaller teams to include more revenue streams. In addition, the players share of that overall pie will be higher because this is Upshaw's central demand and he cannot face his members without some victory on this front. Therefore isn't it likely that a renewed CBA means that the cap will spike way up and save the Redskins from the article's hellish scenario? Would this increase the 2006 cap or would the affect/effect be delayed?

I would like to hear from our resident experts, Schneed and Canuck. Their projections are a little more crowd pleasing. Am I right in my basic asessment? No CBA = bad news for us and all other teams over the cap in 2006 and, Renewed CBA = much higher caps bail us out. I know we've been over this but the article makes it seem that we are screwed regardless and I don't see it that way.

I think you're onto something there. Crazy Canuck can help me out and correct me if I'm off base, but here's how I understand things. Upshaw is asking that the revenues be distributed based on Total Football Revenues, which includes all NFL revenues, from TV deals and local revenues. The owners have agreed to that at this point, agreeing that the entire pie of NFL revenues should be eligible for revenue sharing. What they can't agree on is what percentage of that pie should go to the players. Players are asking for 65%, owners are proposing 59%.

In 2006, this is what the current situation looks like:
Players get 64.5% of DGR (Designated Gross Revenues). Included in DGR is TV Revenue, ticket sales etc., but not local revenues like stadium naming revenues. This amounts to $93 million in salary cap space for each team.

But now, owners at this point have agreed to share more than just DGR, they've agreed to share Total Football Revenues (TFR), which amounted to $5.8 billion in 2005. If the two sides settle on a percentage somewhere between the 59% and 65% impasse, here will be the salary cap limits:

65% of TFR: (65% x $5.8 billion) / 32 Teams = $117.8
64% of TFR: (64% x $5.8 billion) / 32 Teams = $116.0
63% of TFR: (63% x $5.8 billion) / 32 Teams = $114.2
62% of TFR: (62% x $5.8 billion) / 32 Teams = $112.4
61% of TFR: (61% x $5.8 billion) / 32 Teams = $110.5
60% of TFR: (60% x $5.8 billion) / 32 Teams = $108.7
59% of TFR: (59% x $5.8 billion) / 32 Teams = $107.0

Now, what I don't know is whether or not those numbers would go into effect for 2006, or if they'd go into effect for 2007. If they don't go into effect until 2007, then the $5.8 billion used in the calculation would be a higher number (because the NFL's total revenue grows each year). That would mean the cap limits would be even higher than what's projected here.