What's Wrong with the NFL's Salary Cap Penalty Against the Redskins

I'm mad as hell. But first, the facts:

At 2:55pm on March 12, 2012 Adam Schefter tweeted that "NFL is taking away millions of dolllar of salary-cap space from Cowboys and Redskins for how they front-loaded deals during uncapped year." Eighteen minutes later, Shefter tweeted that "Cowboys lose $10 million in cap space, Redskins lose $36 million in space. Can split it over 2012 and 2013 any way they want. More at ESPN." Three minutes after that, Schefter reported: "All that money goes to 28 other teams -- $1.6 million each -- except for Saints and Raiders, who don't get any but don't lose any." This news broke two and a half days after the Redskins had agreed to trade three first round draft picks and a second round draft pick to the St. Louis Rams for the number two overall draft position, in order to secure the right to draft Robert Griffin III on April 26, 2012. The news also came 25 hours prior to the opening of free agency, where prior to this news, the Redskins had been under the impression that they had over $40 million in cap space to use to build a roster to support their rookie QB.

Later that afternoon, the NFL released the following statement:
The Management Council Executive Committee determined that the contract practices of a small number of clubs during the 2010 league year created an unacceptable risk to future competitive balance, particularly in light of the relatively modest salary cap growth projected for the new agreement’s early years. To remedy these effects and preserve competitive balance throughout the league, the parties to the CBA agreed to adjustments to team salary for the 2012 and 2013 seasons. These agreed-upon adjustments were structured in a manner that will not affect the salary cap or player spending on a league-wide basis.
The NFL stated that it would not explain these penalties further.

So leaving aside the speculation about how the penalties were calculated and why certain teams were punished, the Management Committee Executive Council ("MCEC") raised the issue of an unacceptable risk to future competitive balance, and the parties to the CBA - the owners and the player's union - agreed to dock the Redskins and the Cowboys in the 2012 and 2013 seasons.

Let's break that down a bit:

No Rule Violations

You'll notice what's not in the MCEC's statement: a rule that the Redskins or Cowboys violated. That's because they didn't violate any rules. They simply didn't bow to the NFL's empty warning that they should behave as if there was a CBA in place or ... we'll get you and your little dog too. But it's the NFL's fault that 2010 was an uncapped year - neither the Redskins nor the Cowboys made that happen. They simply played by the rules that existed (or didn't). It's not like the 2009 salary cap was rooted in morality such that teams should follow it even if it weren't a rule, like rules against, say cheating by filming your opponents in practice or deliberately trying to injure another person. The 2009 salary cap was a rule with the same moral force as an expired parking meter ticket. Again, and this should be the determining fact: there was no salary cap in place in 2010 and it was the NFL's fault there wasn't a cap.

Unacceptable Risk to Future Competitive Balance?

The goal of the salary cap system is to create competitive balance among the NFL teams. That's admirable, and we should all support the rules that are designed to maintain a fair and balanced NFL. But that doesn't mean teams should go beyond the NFL's rules and impose additional restrictions on themselves that they decide to be in line with the spirit of the salary cap and salary floor rules. What the MCEC appears to be saying here is that the Redskins and Cowboys violated no rule, but are being punished for creating an unacceptable risk to parity, not now but in the future. How can a penalty for creating an unacceptable risk that something that might hurt an abstract goal of the NFL in the future be legitimate? The NFL also has the goal of presenting a family friendly television broadcast - does that mean they could penalize Rex Ryan today for posing an unacceptable risk of being overheard dropping F bombs in future broadcasts?

When you create a precedent as fuzzy as this, it's basically a license for the MCEC to act however they feel, without any accountability or any attempt to demonstrate the fairness of their actions. Where's the line between an acceptable risk to future competitive balance and an unacceptable risk? Is it a dollar amount? Is it a specific number of player contracts?

And lets also take a moment here to reflect on what actually happened after the supposedly anti-competitive salary behavior in 2010. I guess the NFL's point is that in 2010, they were scared that the Redskins' uncapped payments would unduly free up cap space in 2011 and beyond, such that they would have a competitive advantage against other teams who followed the 2009 rules in 2010 out of the goodness of their hearts. But those payments went to Albert Haynesworth ($21 million) and DeAngelo Hall ($15 million). Before the 2011 season, Haynesworth was traded away for basically nothing. In 2011, Hall had his worst statistical season and was ineffective in coverage. The Redskins won fewer games in 2011 than in 2010. So the NFL is saying that, to create competitive balance, the Skins should have had less cap space in 2011, which means they'd have less money to entice good players with, which means they'd probably have been worse. If the Redskins were worse in 2011, there would have been less competitive balance in the NFL. Nice logic MCEC. I should note that the 8-8 Cowboys didn't make the playoffs in 2011 either.

Penalties for Bad Soothsaying?

The second rationale for the MCEC's penalties involve the growth rate of the salary cap after 2010. If in fact a CBA existed in 2010 that said the cap will grow at about 1% each year, then maybe the MCEC's argument that the penalty is appropriate "particularly in light of the relatively modest salary cap growth projected for the new agreement’s early years" would make some sense. But there was no CBA in 2010 and certainly no projections of future salary caps in any future hypothetical CBA. In 2010, the Redskins and Cowboys had absolutely no idea what the salary cap in 2011 would be - in fact, it was possible that there would be no salary cap in 2011 or ever again. If there was a cap, it was certainly possible that it would go up substantially. Only in 2011, when the new CBA was signed, did it become apparent what the salary cap in 2011 and beyond would look like. So the MCEC justifies its penalties for 2010 conduct by saying the Redskins and Cowboys should have predicted the future CBA's salary caps and realized their paltry growth rate would magnify the competitive advantage of their 2010 actions? Sorry DC and Dallas, you should have been better at predicting the future.

A Year Late

If the MCEC had issued these penalties at the start of the 2011 season, they might be slightly closer to legitimate. At least in that case, you'd have whatever nebulous threats the NFL made in 2010 actually made effective in a timely manner. If don't recall last summer, the owners and players spent a fair amount of time talking about how things should be handled in 2011, and while I haven't read the CBA, it's my understanding that it doesn't say diddly about penalties for 2010 salary moves. So this decision comes out of the blue, a year late, with an absurd explanation that the Redskins and Cowboys didn't break any rules but did things in 2010 that would make them too much better than the rest of the NFL last season (again, records of 5-11 and 8-8) to not get punished in 2012 and 2013.

A Day Before Free Agency Begins

As recounted above, this news was handed down one day before free agency begins. The Redskins and Cowboys organization have no doubt been working hard to prepare for free agency, developing strategies for their offseasons based on what they have to work work, namely their cap room. Not only does this throw a huge monkey wrench into all that planning, think of what this news does to the teams' ability to sign free agents, who might decline to join a team for no other reason than they are unsure whether the league will allow them to get paid at their contract rate. If I'm a free agent in demand, I wouldn't want to go to a team with that kind of uncertainty. Oh, and as to the Redskins in particular, there's that little issue of the trade of four top draft picks with St. Louis, agreed to when the Skins were looking at around $40 million to use in free agency. Think that trade wouldn't be affected by cutting $36 mil from that number?

Double Punishment

Even if these penalties were legitimate, the MCEC appears to have bribed the players' union into not opposing it by double punishing the teams. I'll explain what I mean about double punishment. Let's say everyone agreed that a team violated the salary cap by $10 million. To remedy that violation, there's two ways you can do it. One way is to dock that team $10 million in salary cap space, the other is to allow all the other teams to get a pro rata share of the $10 million in extra cap space. Either way, you make amends for a $10 million violation with $10 million of either punishment or compensation. But the way the MCEC penalties work, the Redskins and Cowboys lose a combined $46 million in cap space, AND the eligible teams get a pro rata share of the $46 million - that's a $92 million swing. The reason this happened appears to be that the player's union wouldn't agree to cut $46 million out of their players' pockets for non-violations of any rule in 2010, so the MCEC extorted their consent by a) threatening to lower the 2012 salary cap; and b) bribing them by adding $46 million to those teams that bowed to the NFL's illegitimate request that teams not pay their players market salaries in 2010. Classy move, MCEC. And by classy, I mean capricious, vindictive and petulant.

2010 Underspending Goes Unpunished

2010 was both an uncapped year and an unfloored year, meaning that unlike 2009 when teams had to pay their players at least $109 million in the aggregate, teams could pay their players way less. At least five cheapskate teams plummeted through the 2009 floor in 2010, paying their players less than $90 million altogether. But this behavior, which hurts the players and sends a clear message that these teams do not want to win but rather want to make more money for their owners, does not pose an unacceptable risk to competitive balance?

The Cowboys' Unexplained Discount

Some commentators have noted that the Redskins' penalty equals the 2010 payments to Haynesworth and Hall, but the Cowboys $10 million penalty is $7 million short of that team's cap-ignoring payment to Miles Austin in 2010. Why the discount, or rather, why the lack of a discount for the Redskins?

The MCEC makes this guy look like King Solomon.

Legitimacy's Requirements

For these penalties to have any semblance of fairness and legitimacy, they need to be accompanied by far more explanatory details and at least a spreadsheet or two. We would need to see the "warnings" that the NFL issued in 2010, and the specific behavior they told teams to avoid. Even today, NFL news feeds are rife with stories about cap maneuvering through restructuring and bonus payments. Assuming the NFL won't be penalizing all these teams in say, 2014, for these actions, they need to come forward with an explanation of why what the Redskins and Cowboys did in an uncapped year is worse than the fundamentals of "capology." Further, we'd need to see a spreadsheet of every team's salary decisions in 2010, and the line at which good management becomes anti-competitive.

There's also no explanation for why these extreme penalties are proportional to the "unacceptable risks" caused by the teams. The penalty for the Redskins amounts to fully 30% of a season's roster cost. If each player were paid the same amount, the Redskins would have to go into Opening Day short 16 players if they took the penalty all in one year. The fact that they can split the penalty over two years is little relief, as it still amounts to the same insanely high cost, just suffered more slowly. For comparison, in response to Spygate, one of the most blatantly anti-competitive scandals in the league's history, the NFL took away one first round draft pick, which is far less severe than 30% of a roster. Even if there were a violation of a rule here, the only appropriately proportional penalty would be to assign the disputed 2010 payments pro rata to the rest of the team's salary caps.

These penalties are unfair, illegitimate and tone deaf. This wasn't some simmering issue that people were clamoring for the NFL to deal with. Maybe a few owners were ticked off about this when it happened, but wasn't the teams' mediocrity in 2011 enough to dispel their annoyance? Now you have the NFL screwing over two franchises at an incredibly inopportune time for wanting to pay their players market salaries in 2010.

The Redskins and Cowboys should fight these penalties as hard as they can.
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