Mike Florio at Pro Football Talk is reporting that the salary cap will increase from $123 million to “more than” $132 million (speculated to potentially reach $135 million), which is more than the $130 million reported last week. That $130 million was a surprise, because it is a greater cap than what was reported in December. That report in December was an increase from a report earlier in the same month that increased the projected cap from $123 million to $126.3 million.
The most interesting impact is that delay in the “true” cap number may end up helping NFL teams, intentionally or not.
Franchises should be able to negotiate out of both sides of the issue. NFL teams typically resist rising salary negotiations by arguing that their proposed rising salary already takes into account what the new salary cap should be (that is, they’ve already priced it in their contract offers to players and their agents) while also being able to set the initial negotiating terms based on the old, obsolete cap number at $126.3 million.
This doesn’t just affect teams negotiating with their own players, but the teams illegally tampering (that is, every team) by negotiating with players and their agents before the legal contact date of March 8th, most of which happens during the NFL Combine.
It’s well established in negotiation literature that the ability to set the first offer is extremely powerful, and will usually be used as the anchor point in dealings moving forward, even in the light of new information. It’s called the anchoring effect, and it overwhelms the power of new information, like how much money an owner or team is working with—an extension of confirmation bias that devalues new information in light of the anchor:
Psychologists have documented that when people make quantitative estimates, their estimates may be heavily influenced by previous values of the item. For example, it is not an accident that a used car salesman always starts negotiating with a high price and then works down. The salesman is trying to get the consumer anchored on the high price so that when he offers a lower price, the consumer will estimate that the lower price represents a good value. Anchoring can cause investors to underreact to new information.
Does this mean the NFL is cheating? No, but it does mean that they benefit immensely. Smart agents should know that they are operating at a disadvantage when it comes to information and propose percentage values of the cap, or convert offers they receive to percentage values and use those to negotiate instead of hard dollars.
There’s no evidence one way or the other that this is intentional, but it is a perfect example of a negotiating party leveraging their massive information advantage. In this case, the players are at least lucky that their (relatively) weak union was able to negotiate a price floor for their services, limiting the scope of the NFL’s advantage.
As for how it affects the Vikings: minimally, but beneficially. Teams looking to sign free agents are in a better spot than those that will delay their search for FAs for a few years because this unusual increase and unique negotiating position should relatively benefit those teams more. The increase from $126 million to potentially $135 million is the same amount of cap space that would be used to sign a high-value free agent like Alterraun Verner and Greg Hardy.
It also happens to minimize the importance of rollover space; which is space that teams are eligible to use from the previous year that they can leverage in this year. The Vikings only had about $800,000 in rollover cap after signing Josh Freeman, and it looks like the importance of that pales in comparison to the cap increase. Rolling over $4 million or so matters more in a year where the cap increases by only one or two million dollars than when it increases nine million dollars.
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I hate to sound dumb but how does that whole rollover thing work? Are there limits? How's it calculated? etc.
I'm not entirely well-versed on this, but there are no hard limits on the rollover, but there's a soft limit insofar as there's a salary floor over a four-year period of 89% of the total cap from 2012-2015. There is only so much space a team can give itself that would allow a rollover.
It is difficult to roll over a roll over, because I think the roll over from one year is pegged to a base cap instead of the "adjusted cap" they receive. That is, if the Vikings had $10M of roll over in 2013 (over $123M) and chose to bring that space into their 2014 cap (let's say the NFL cap is set at $135M in 2014) and spent $127M, they would only be eligible to roll over $8M even though they technically had $145M of space ($10M of roll over plus $135M of the baseline cap) to work with.
The calculation is fairly complex, but it usually ends up close to "space used" minus "space available".
"Space Used" is calculated by adding the base salary, a prorated signing bonus (which is just dividing the signing bonus by the number of years in the contract (up to five years) and applying it to each year (up to the first five years)) and any "likely to be earned incentives" plus the dead space from cutting players who had guaranteed money left on the contract.
Thanks Arif. I think I understand it better now but have to admit to reading it twice.:) I guess Jerry Jones never has to worry about rollover.
Good gracious Arif, the next one should be a decaf man!!
A simple reply to Bjohnny like. "Don't worry about feeling dumb, you're still smarter than Freds." would have been sufficient.
Maybe Jerrah had something to do with it?
Alterraun Verner could be a good pick up...might overpay a bit. But, it would be worth it. 23 passes defensed is pretty good, led the league. We could use a corner like that.
Ron Jaworski says he wouldn't draft Johnny football in the first 3 rounds of the draft......http://profootballtalk.nbcsports.com/2014/02/26/ron-jaworski-i-wouldnt-take-manziel-in-first-three-rounds/
I wonder if the ever raising cap increase this year is to keep the Cowboys and a couple of other teams from having to drastically reduce payroll to get under the cap.