NFL teams spending at exorbitant rate
In the NFL, they call it the Rule of 51 — only the top 51 salaries count toward a team's salary cap.
During an offseason in which NFL teams are spending on free agents more like Major League Baseball teams do, it's the Rule of 89 that is unexpectedly accelerating player salaries.
In a marked contrast to the rather conservative spending of a year ago, NFL owners have committed nearly $1.75 billion to free agents in one week's time, although a great percentage of that is non-guaranteed phantom money that never will be paid. Still, nearly $648 million is guaranteed.
The bottom line: Teams are spending more on players because they have more money and because they're being forced to by an often-overlooked provision in the 2011 labor agreement between the 32 NFL teams and their players.
As part of the deal, teams are required to spend 89 percent of the salary cap on players over a four-year period that began in 2013. Teams didn't quite feel the urgency to spend in the first year, but they are now.
It's one reason the Raiders, who had more than $60 million of salary cap space when the free agent signing period began March 11, gave deals of $15 million to offensive tackle Austin Howard, $12 million to former Steelers linebacker LaMarr Woodley (he'll be a defensive end in Oakland), $11.3 million to James Jones and $11 million to defensive lineman Justin Tuck.
An unexpected bump in the salary cap also is accelerating salaries. When the 2013 season ended, there were predictions the cap would climb from $123 million to only about $126 million; instead, it's jumped by more than 8 percent to $133 million, with predictions of similar rises in upcoming seasons that might quickly push the cap up to $160 million.
The increase significantly helped the Steelers, who were $15 million above the cap two weeks ago, and it possibly provided enough of a cushion that they could absorb the $14.1 million in salary cap space they'll devote to Woodley's contract over the next two seasons.
They also cleared enough space to give out a $25 million deal to safety Mike Mitchell, with $5.25 million guaranteed. They also tendered a contract to outside linebacker Jason Worilds, who could wind up getting more than $10 million guaranteed in an anticipated long-term contract.
The cap is climbing in part because of growing TV revenues; the $3 billion-a-year network TV deal extensions with CBS, Fox and NBC that were announced in 2011 kick in this season and run through 2022.
Also, CBS is paying an extra $250 million for about half of the Thursday night TV package. And there will be more revenue coming soon from the next Sunday Ticket deal; DirecTV's current, exclusive contract runs out after this season.
Despite having expensive quarterback contracts — the kind that, in the past, severely limited some teams in free agency — the Saints (Drew Brees) and Broncos (Peyton Manning) are taking advantage by being among the biggest spenders.
Denver gave deals of $57 million to Aqib Talib, $30 million to DeMarcus Ware, $22.5 million to T.J. Ward and $18 million to Emmanuel Sanders; New Orleans, in cap trouble only last week, signed former Bills safety Jairus Byrd for $54 million and re-signed Zach Strief for $20.5 million.
If nothing else, such deals are gradually altering the perception that the owners were slam-dunk winners in those 2011 contract negotiations. The money says both sides won — big.
As former Colts executive Bill Polian said, “Nothing is free in free agency.”