CBA Nonsense: The League Strikes Back

In an unexpected move, for NFL fans, the league announced that it will be removing cap space from the Dallas and Washington Redskins. The Cowboys will lose $10 million in cap space and the Redskins will lose $36 million; the teams have the option to displace these fines over the next two years in any way they choose. The fines come in response to “excessive” and “abusive” contract restructuring during the uncapped offseason two years ago. For those that have forgotten, in the year preceding the NFL lockout, the league went through an uncapped offseason where team salaries were unleashed from the typical floors and ceilings, under a collective bargaining agreement (CBA). This uncapped year came as a result of the owners’ decision to opt out of the then current CBA, and inability to reach a new agreement before 2010. During this time frame the Cowboys restructured Miles Austin’s contract and paid him $17 million so that the bonus would not be prorated across the life of the contract. The Redskins performed similar movies with Albert Haynesworth for $21 million and DeAngello Hall for $15 million.

Restructuring contracts to convert base salary into bonuses is a common strategy used by teams to free up cap space for the immediate future. The move is a bit of a gamble as the conversion typically turns salary (due over the life of the season) into a bonus (due at the signing of the contract), making all the money guaranteed. What was different, and frankly smart by these two teams, was that they restructured the contract in an uncapped year. The Cowboys and Redskins wrote massive checks upfront and used the uncapped year to limit the cap hit in future years under these contracts.

So, if this a practice typically employed by teams, then why are the Cowboys and Redskins being punished? It is not entirely clear at this point, but it appears that the 28 other owners in the league agreed with commissioner Roger Goodell, that teams should not create “crazy contracts” during the uncapped year. This was not a rule written anywhere in the CBA, it was simply a backroom agreement that some, but clearly not all of the teams wanted. Several parts of this punishment are upsetting and should scare fans going forward.

The Contracts

While the league is now kicking and screaming about these contracts, they were all approved in 2010. All new contracts must be submitted to the league offices for approval, and none of these contracts were voided at that time. The question then becomes, if the league did not have a problem with these deals in 2010, why are they making a fuss now? The answer lies in the very root of this whole debate; because the teams did not violate any rules. In order for the league to void a contract, an agreed upon rule must be broken. Nothing the Redskins or Cowboys did in 2010 violated the rules in place and thus the contracts were approved.