For all the "Chicken Littles" out there tonight, just want to refresh everyones memories about some basic principles of NFL Economics 101: #1 - There are 32 teams in the NFL, all with salary cap space to play with. #2 - There was a big jump in the salary cap ceiling, giving a good 10-15 teams with a substantial amount money to play with. #3 - This years crop of FAs is not as talented nor deep as past years available FAs (due to teams signing core players to contract extensions). What is the result of these 3 factors? Teams with a lot of cap space (aka the 49ers) are paying obscene amounts of $$$ and eating up alot of salary cap space on players that are simply not worth it in the long run. This year we have the perfect storm of demand exceeding the supply of quality players, coupled with the high overall availability of salary space (aka "cheap money"). The result is a predictable hyper-inflation market in FA with teams getting into obscene bidding wars. For those who have purchased houses within the past 2-3 years in the hyper real estate market, that was the same effect (high demand + low supply + cheap $ in the form of low interest rates = hyper real estate market). Within a few days, all the "cheap money" will dry up and the FA market will correct itself. Those teams who gorged in the first few days will pat themselves on the back, but it won't be too long (i.e. one or two years) before buyers remorse kicks in. In the meantime, everyone needs to relax and see how the rest of FA period and draft unfolds before jumping out any windows.
If there is one good thing that comes of these big signings, it will be cuts of quality players due to cap issues.
Everything stated above is Damn Right! Is there anyway the mods can make this thread automatically appear in response to every thread and post that attacks the FO for not signing big name FAs so far? Maybe make it a sticky up at the top and then merge all the "Chicken Little" threads with it. Nice work Klecko73
I think your logic is a little flawed. The salary cap went up about $7mm this season and is projected to go up $7mm next season based on a revenue share of 57%. In 2009 and 2010, not only will league revenues go up, but so will the percentage dedicated to the salary cap, 57.5% and 58%, respectively. So, the market will not "correct itself" in a few days, more likely, it will be a few years. The deals signed yesterday will be less than the deals signed next year and so on. Basically, I don't think the big deals will hurt the teams, if they were structured appropriately. The market will only "correct itself" when players decline to be extended because they want to test the market thereby creating a higher supply of available talent...again, that's a few years down the line. Clements got $22mm guaranteed. I am assuming that it is not all signing bonus, but rather guaranteed salaries over the first few years. What that does is not spread all $22mm (or almost $3mm a year) out over the life of the contract, but takes advantage of the cap space the 49ers have this and next season. That way, they won't take a huge hit when they cut him a few years down the line to avoid paying the big, back-loaded salary dollars that made the deal a nice round $80mm or $10mm per.
I agree you will have the same phenomenon next year also. What I am talking about is this feeding frenzy at the beginning of FA. You have 20-30 guys making obscene money because teams are throwing money away like Pacman Jones at strip club. Eventually all of the '07 money will run its course. But you still will have lots guys standing around next week who can still play the game but didn't cash in this week. Then cap shrewd teams can come in with more leverage and gets some bargains.
Part of my post was saying that the big $$$ spent yesterday will not really hurt the teams going forward due to the increasing cap. Furthermore, the guys standing around next week can play, but won't be nearly as good as the guys who will have signed new contracts. Also, there will still be a ton of cap money out there, so teams won't have any leverage and you will see the Ashley Lelies and David Macklins of the world getting current high quality starter money. It is highly doubtful that in the new world of the $3mm per year FB there will be any "bargains."
Excellent post. If the Jets are in good cap shape in 2 years they'll be able to scoop up a really good free agent a lot cheaper than they can now.
What the top free agents can get is determined by who is able to bid and how much. The splurge this year on mediocre free agents is going to lessen the ability of teams to bid next year and the year after. The difference in a year is that top tier free agents will be looking at far fewer suitors who have 25 million in cap space to work with. A few teams will maintain a lot of cap room and will be in a position to make the offers that the top guys are looking for. I'm hoping the Jets have that leverage although I'm mindful that signing a top tier free agent generally does not add much to a team.
We should use our cap space to resign our best players long-term, like they did with Cotch. The FA market is pretty crappy this year, Porter and Duckett being the only "names" I'd be looking at right now.
I agree 100%. Teams don't win in the NFL by overpaying for free agents. This year's free agent crop is weak. I'd much rather see the Jets build through the draft and by signing free agents that are worth more than their contracts. The only way to win in the salary cap world is to have a team of players that outperform their contracts. If everyone spends $100 million, the winning teams have players that play at a level that is higher than that. Clements or Thomas will get contracts that they will never be able to live up to. Clements is not the best defensive player in the NFL, but he is the highest paid one right now. Will he earn that contract - doubtful. So everybody calm down and let's see where this team is by training camp, not one day into free agency.
You are missing the point. The TV money is just going to continue to increase. Alos the falling US dollar is making everything more expensive including professional atheletes. While it is important not to spend too much there is no bumper crop of free agents around the corner. As teams continue to learn how to manage the salary cap less and less quality free agents will make it to free agency.
