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20 Sep 2009

Under the Cap: Final Eight Plan

by J.I. Halsell

In my August 26 entry, entitled "Uncapped Leverage," I discussed the change in the accrued season requirement in order for players to be eligible for free agency, from four seasons to six seasons. This change is mandated by the Collective Bargaining Agreement to take effect in the uncapped year, currently slated for 2010. As I discussed in my earlier column, this tremendously hinders free agency from the players’ perspectives by forcing them to wait longer for their much anticipated second pay day. The uncapped year obviously presents players and clubs with an environment without a salary cap or team salary minimum; this environment has been discussed extensively in the media. Another aspect of the uncapped year, however, that has received very little coverage in the media. It's called the Final Eight Plan, and this change mandated by the Collective Bargaining Agreement completely alters the rules of free agency for clubs.

As it is today with a salary cap, when free agent season begins in March, all 32 clubs have the opportunity to acquire unrestricted free agents (UFA) in an open, competitive market. In an uncapped year of 2010, the Final Eight teams in the 2009 playoffs, meaning those teams participating in the Divisional round in both the AFC and NFC, will be limited in their ability to acquire free agents in the offseason after their post-season run.

The four clubs that make it to the Conference Championships in 2010 can sign the following three types of UFAs:

  • Any UFA who became a free agent by virtue of their contract being terminated before its expiration
  • Any of the club’s own UFAs
  • A UFA to replace each UFA lost by the club

Regarding this one-for-one UFA replacement, the contracts signed by the UFA replacement player must fall within the following parameters:

  • The first year salary must not exceed the first year salary contained in the new contract of the UFA lost by the team
  • Salaries in the future years of the replacement UFA’s contract may not increase by more than 30 percent of the first year’s salary
  • The contract cannot be renegotiated until one year after the signing date

For the four clubs that lose in the Divisional round, they can sign the same three types of UFAs as the clubs that advanced to the Conference Championships. However, these four clubs may also sign one UFA for a first year salary of more than roughly $6 million and any number of UFAs for first year salaries of no more than approximately $4 million. The $6 million and $4 million amounts are approximations because they will be determined by projected Total Revenues in the uncapped year.

Let's say the Arizona Cardinals lose in the Divisional round of the 2009 playoffs, and they subsequently lose their kicker, Neil Rackers, via free agency to a contract that has a first year value of $3 million. Under this scenario, the Cardinals could sign a replacement UFA to compensate for Rackers’s departure. This replacement UFA does not have to be a kicker and their first year salary cannot exceed $3 million. Moreover, the replacement UFA’s contract cannot provide for annual increases in excess of $900,000 in order to comply with the 30 percent provision. Additionally, in free agency, the Cardinals would be able to sign the other types of UFAs available to Divisional round clubs.

Another rule applied to the Final Eight clubs is a prohibition on those clubs from trading for UFAs they otherwise would not be eligible to sign as a result of the rules of the Final Eight Plan.

The Final Eight Plan takes the NFL from an "even playing field" model of free agency to an uneven playing field that is designed to work in favor of the 24 clubs that do not make it to the Divisional round, in an attempt to keep some level of competitive parity in an uncapped world. Essentially, the Final Eight Plan, among other things, places a salary cap on free agency for the final eight clubs, despite the absence of a league-wide salary cap. It’ll be a brave new free agent world in the 2010 uncapped year; things should be very intriguing if we get to that point.

Follow J.I. Halsell on Twitter @SalaryCap101

Posted by: J.I. Halsell on 20 Sep 2009

10 comments, Last at 24 Sep 2009, 7:55pm by Kyle.Brostowitz

Comments

1
by IAmJoe (not verified) :: Sun, 09/20/2009 - 2:13pm

Wow, that "The first year salary must not exceed the first year salary contained in the new contract of the UFA lost by the team" could be a real pain. If you lose a cheap UFA, you have to replace him with a cheap UFA? Ouch.

How would this work in terms of retirements? A retired player has no new contract by which to compare to his replacement, so would that part just be ignored?

3
by Israel P. (not verified) :: Mon, 09/21/2009 - 5:19am

However it works for retirement, it has to have a provision for unretiring afterwards. Just in the extreme and unusual case that some obscure player might want to do that.

6
by Neoplatonist Bolthead (not verified) :: Mon, 09/21/2009 - 8:56am

That would NEVER happen.

2
by bill prudden (not verified) :: Sun, 09/20/2009 - 8:48pm

I suspect that clubs which want to get players and spend money will have no trouble doing so:

1) Make a handshake sgreement with a UFA for him to sign a cheap deal and then wink wink re-do the deal after one year.

2) Contact players for other teams who are under contract and have them hold out until they are traded to you. Since only a small number of teams will be willing to pay them market-setting rates, the team holding them will have very little leverage to make the new team pay a high value in draft picks or other compensation. Think, for example, of Arizona / Anquan / NFC East teams that would love him in 2010.

If eight to twelve teams spend well under the existing floor, and two to six teams spend much more than the existing ceiling, then rules be damned, money will find a way...

Bill

4
by Scott C :: Mon, 09/21/2009 - 5:50am

If a team was caught doing #2, they would get a penalty from the NFL -- likely losing a few future draft picks. I'm sure it is still against the rules to talk to players on other teams that are under contract.

7
by dmb :: Mon, 09/21/2009 - 9:07am

(1) No agent worth anything would let his client agree to do this. What happens if the player sustains a career-threatening injury? If the team goes through with the new large deal, that alone would be crazy enough to merit investigation by the league. Since it would draw suspicion from the league AND would be a bad personnel move in the first place, no team would honor that handshake "agreement." So then the player is left with a screwed-up body, no career, and no payoff from his former career. The combination of on-field violence and non-guaranteed contracts already makes the NFL a risky livelihood for athletes; I sincerely doubt (and hope) that it never gets that crazy.

(2) As Scott C. pointed out, this is tampering. Although I'm not naive -- I know that teams willingly break rules -- I really doubt tampering this severe would become commonplace, because the first team it happened to would cry bloody murder (and rightfully so).

If wealthy teams are to try to get around these rules, I imagine the most likely strategy would simply to be to err on the side of "payment"; even if a large free-agent contract is a bust, it may become a worthwhile deal simply because of the future payroll flexibility it would entail.

8
by DrewTS (not verified) :: Mon, 09/21/2009 - 10:55am

Agree 100%. And to further harp on point #2, players try to hold out for trades all the time, and it usually doesn't work, especially if part of the deal is that the player expects a fat raise. The Anquan Boldin example originally mentioned is a perfect example of this. Anquan Boldin is still on the Cardinals, and he didn't get his raise. See also, Brandon Marshall.

5
by Jimmy :: Mon, 09/21/2009 - 7:03am

•The first year salary must not exceed the first year salary contained in the new contract of the UFA lost by the team
•Salaries in the future years of the replacement UFA’s contract may not increase by more than 30 percent of the first year’s salary

Where it says salary, does this mean total cap hit or base salary (chapter 11 or paragraph 9 or whatever it was called)?

9
by tuluse :: Mon, 09/21/2009 - 1:04pm

I would guess that it means total salary, so you wouldn't be able to give out big bonuses. Otherwise it would be a useless rule.

10
by Kyle.Brostowitz :: Thu, 09/24/2009 - 7:55pm

I think the term "Uncapped Year" scares people so much, that they fail to look at what it actually means. Everyone assumes that the NFL will turn into MLB, without realizing that this is essentially a "poison pill" in the CBA, that should motivate both sides to get a deal done. Neither side really wants to go uncapped.