by Mike Sharkey
Staff Writer
The National Football League’s salary cap isn’t brain surgery. It may be more complicated. It isn’t an off season job. It’s a year-round job that needs work every day. There’s really no “getting it” because “it” changes all the time.
For every fan that calls sports talk radio with a good grasp of the cap and what they think their team (around here that’s likely the Jaguars) should do with its cap room, there are 10 fans totally confused by the salary cap and its intricacies.
Sports talk show hosts get questions like these all the time:
My team has $19 million under the cap. What should they do with it?
Or, my team is $10 million over the cap going into this year. What are they going to do to get back under and stay competitive at the same time?
How can they pay one person so much when there’s a salary cap?
Good questions and none of the answers are easy. In less than a month, the NFL version of the hot stove league will begin (in baseball, that’s known as the off-season when teams trade, cut and re-sign players). You’ll hear terms like “transition player” and “franchise player” and “salary cap” many times over. The talking heads on ESPN will speculate for weeks on end about players and teams and who will spend what on whom.
Rather than speculate ourselves, we decided to sit down with Paul Vance, the vice president of football operations and the general counsel for the Jacksonville Jaguars. Vance is the team’s salary cap guru. He doesn’t evaluate players — that is head coach Jack Del Rio’s and vice president of player personnel Jack Harris’ (Jack and Shack) job — he evaluates whether the team can afford that player. We agreed not to talk about specific players the team may be interested in and Vance agreed to explain the cap. Vance has been with the team in some capacity since 1994, when he joined the franchise as general counsel. He is from Buffalo, graduated from the University of Rochester and earned his law degree from Columbia in 1973. Vance came to the team after 21 years of private practice in Connecticut.
In layman’s terms, what is the NFL salary cap?
“It’s the limit on what a team can spend on players each season. It applies each season and the presumption is the system, as it exists today, will continue. It’s the accounting system for the cap that is so unique and leads to the confusion.” Vance explained the biggest issues regarding the cap centers on the signing bonuses that teams give players. Those bonuses are amortized, meaning that an $8 million signing bonus spread over four years actually only counts $2 million a year toward the team’s yearly cap for the life of the contract.
What is the biggest misconception surrounding the cap?
“The misconception that a lot of teams have and fans have is that you can move cap room forward relatively indefinitely. The analogy of that is that of a wave. If you push water with your hand, you are going to produce a wave. Eventually, that wave is going to lap over and crash back down. Players aging is like the wave getting higher. When the wave gets too large, it comes crashing down. Then you have to underspend and that can lead to stress on the field. When you get rid of the older, expensive players and sign younger, cheaper players, you suffer for a while.”
What is the Jaguars’ philosophy in regards to the cap?
“We are approaching a time when teams have 10-12 years of experience operating in a cap system. We have adopted the approach that we are going to build with our younger players. The draft is the key source of talent in the league. You want to resign your core players and only use free agency to supplement your team.
“Our philosophy is based on a number of things. One, we recognize the value of younger players and the draft. Two, we want to be in position and have the flexibility to take advantage of the player opportunities that come up. Flexibility is a key factor. Three, we understand the economy of change in the league and we adopted the view of spending cash each year roughly equal to the cap.
“Our best approach, based on the size of our market, is to have a revenue stream that allows us to spend cash to match the cap each year.”
What is the NFL cap for the 2006-07 season and how much room do the Jaguars have?
“The new cap year starts in March and we are under the cap, but I don’t have specific numbers at this time. The informal reports have us between $10 million and $15 million under the cap, but that doesn’t include tenders on players we control, those on injured reserve or those contracts we want to extend or players we want to re-sign. It also doesn’t include draft picks or undrafted free agents. But, we are comfortably under the cap.
“As for the overall cap, we haven’t been given the formal number, but it will probably be between $92 million and $95 million. Under the collective bargaining agreement, it can’t go down.”
Vance said the cap has risen to nearly $100 million after starting at about $38 million when the Jags first entered the league in 1995. As new TV contracts worth billions of dollars get signed between the networks and the NFL, the yearly cap goes up. “Every time there’s a new TV deal, the team revenues increase fairly significantly.” Vance said the next big TV contract will be signed after the 2011 season, but he declined to speculate on how much it may be worth or how it will affect teams.
What’s the process in determining whether the Jaguars pursue a player or not?
“Jack is the coach and Shack is in charge of the personnel side. I oversee the cap in negotiations. My job is to make sure Jack and James understand where we are under the cap. Jack and James look at the team’s weaknesses and look around the league. Then, we all sit down and look at the team’s cap room. We research other contracts in the league. We make rankings based on market value and decide who to go after with recognition of staying under the cap.
“It’s not dissimilar to what people do with fantasy leagues except ours goes on day after day. We do not have the luxury of sitting down the first day of August and picking our entire team.”
How long is the salary cap process each year?
“It’s 365 days of the year. At any time of the year a player may become available. The opening day of free agency is March 3 and we are planning and restructuring (contracts) for that. June 1, some veterans will get cut. There will be cuts in training camp. We cut a number of veterans last year and kept rookies that we thought would help us more.”
How stressful is it dealing with the cap, the players and their agents?
“I don’t find it particularly stressful. You have to deal with a lot of choices and be able to think on the run. I spend 5-6 hours in preparation for every hour I spend on the phone. We have thought about where a player is, we get information on his agent, we evaluate his physical condition and we try to find out if he would be happy here in Jacksonville as a third receiver and contributing on special teams.”
Vance said agents are like real estate agents in that they are trying to find their clients a job in the same way a Realtor is looking for a home for their client. Offers and concessions are made until a deal is either reached or negotiations fall apart.
“My job is to assess how likely we are to sign the player or am I just bidding it up for someone else and wasting our time. I don’t want to become known as someone who underspends or is a bluffer. Agents want good market value for their clients. They don’t want bluffers or someone making outrageous demands.”
Vance believes one of the most important aspects in dealing with agents is creating an atmosphere of trust and respect on both ends. “The relationship with the agent is more important than the tactics.”
How are agents to deal with?
“By and large they are not creeps. They operate in a system that’s difficult. If they did what’s ascribed to them, their business would be down. Most of them have good relationships with the teams, butt no relationship with each other. The biggest problem the agents have is getting hired. The rookie market creates crazy pressures and there is quite a bit if agent changing among players.”
You hear that an “uncapped” year is coming. What does that mean? Will teams be able to spend whatever they want on players for one season and what will that mean the next year when the cap goes back into effect?
“The Collective Bargaining Agreement runs through March of 2008. Under the terms of the CBA, the ‘06 year is the ‘last capped year’ meaning the ‘07 season could be an ‘uncapped year.’ There are a myriad of rules that are different for the last capped year and the uncapped year. Those rules have aspects that are bad for the players and aspects that are bad for the teams.”
Vance said the key to avoiding a season in which the teams with higher revenue streams spend outrageous money on one-year contracts for free agents in a effort to win the Super Bowl is for the players and the league to reach a new CBA before the ‘07 season.
“Those rules could come into play if there is no deal. The net effect will be a significant reduction in the cap room that teams have.”
Vance added that no one is real sure the exact effect, both short term and long term, that an uncapped year would have on the league. In fact, if it happens, the real issue may be the ‘08 season and how teams would adjust from a year of free-spending to having to conform to a cap again.
How do the Jaguars approach the draft each year?
“The problem is people think the draft is scientific. We try to make it scientific. We do the best job with planning that we can, but even with your best job you may miss. On average, everyone has missed in the draft at some point. You may get a Rasheen Mathis in second round, but you can’t beat yourself up if a pick doesn’t work out. All you can do is be consistent and make the best picks possible. In the long run, that helps with the cap. You want to add depth and strength to your roster.”
What’s the biggest issue facing the Jaguars this off season?
“The cap is not an issue, it’s something you have to manage every day. There are areas we want to strengthen and you always want to add depth. Why is this a 365-day-a-year job? Because not all the players are available at the same time. Players become available all year long.”