The current CBA expires at the end of the 2020 season, which will start to impact contract structures and decisions soon

The issue

Here’s an excerpt from a July 2018 article published on OverTheCap:

In March [Todd Gurley] will not only guarantee his 2019 salary but also his 2020 roster bonus of $7.55 million. Once that happens the cost to release Gurley in 2020 would be over $20 million on the cap. Because this is the final league year of the CBA there is no June 1 provision so they would need to absorb that full number if they were to cut him.

This is the first contract that seems to have some acknowledgement of a potential work stoppage in 2020 based on the roster bonus language.

This is a good reminder that the current rules regarding salary cap, rookie salary structures, franchise tags, and the like are only guaranteed to stay the same for three more seasons, and 2021 could not only bring significant changes to these CBA-controlled rules, but those changes could come at the cost of a labor dispute or work stoppage.

What does this mean for the Redskins?

My concern in this article is with the fact that NFL front offices need to be thinking about what is on the horizon three years hence, and become forward-thinking in salary cap management.

In my opinion, the Redskins are in a position to take advantage of the soon-to-be changing landscape.

The Redskins, personified by Eric Schaffer, have been very good cap managers since surviving the league-imposed $36m cap penalty in 2012-13. The team has generally put together a package of contracts for its own veterans and free agents that look 3 to 5 years into the future, and which retain a lot of control for the franchise. This doesn’t mean that the team hasn’t signed any regrettable contracts, or mis-evaluated any players, but the contract structures have been conservative and carefully structured to provide the Redskins with options in any case where they do make a mistake.

Having a conservative and demonstrably smart negotiator like Schaffer in charge as we approach a time of almost certain labor dispute and unforseen rule changes regarding cap, franchise tags, and contract structures should put the Redskins in a good position to make the best of the uncertainty that lies just 30 (or so) months away.

What kind of issues are we talking about?

The example from the OTC article — no June 1st designation available in the 2020 season — is just one of many potential sandtraps that may lie ahead.

Will teams be able to use the franchise tag in 2021? Jonathan Allen, Fabian Moreau and Montae Nicholson are three young players who — without extensions — will be free agents in 2021. Perhaps the approach to their contracts will be affected by the uncertainty about the ability to use the tag as it can be used now to retain a player on the roster.

Will the salary cap continue to rise at a rate of 6% or 7% per year? And if it doesn’t, what will that mean for cap management in 2021 and beyond? In 2009, the final year of the last Collective Bargaining Agreement, the league cap number was $123m. In 2010, without a CBA in place, there was technically no cap. That didn’t stop the league from penalizing teams like the Redskins (rant alert) who refused to participate in illegal collusion in the absence of a labor agreement (good faith collective bargaining is part of the requirements that allow the NFL to enjoy anti-trust exemption, first approved by Congress in 1961... end of rant).

The current CBA took effect in 2011, and it led to a significant reduction in the cap, which fell $3m from the ‘09 level to just $120m. The league cap number didn’t return to the ‘09 level of $123m until 2013.

The annual increases in the league cap number that we have come to consider as virtually automatic are definitely not guaranteed to continue when the current CBA expires after the 2020 season comes to a close. Should the front office start inserting language into contracts for veteran players that anticipates this uncertainty?

Will the new CBA continue the current approach toward ‘slotted’ rookie contracts based on draft position? The current system was created, in part, to protect teams from themselves — to prevent the situation that happened with the Rams and Sam Bradford and the Lions and Matt Stafford. Bradford was drafted #1 overall in 2009, the final year of the last CBA. He signed a 6-year, $78m contract with $50m guaranteed. Matt Stafford, the previous year’s top pick, had signed a 6-year, $72m deal with $41.7m guaranteed. The feeling was that teams were being forced to pay far too much to unproven rookies. Something had to be done.

But the move to limit rookie salaries was not just for the purpose of protecting teams against themselves. Since the salary cap is a pie with a specific number of slices, giving less to rookie players meant giving more to veteran players. In other words, the rookie salary structure is largely about reserving more cash for veterans.

Of course, the NFLPA may feel that the pendulum has swung too far the other way. The current structure of 4-year contracts ‘slotted’ by draft position, with a 5th year option for first-round picks, may be seen as being too disadvantageous for drafted rookies, who need to wait 4 to 5 years to cash in if they play well. That’s long time in a league with the average career span of the NFL. If the new CBA, due in 2021, increases the amount paid under the rookie wage scale; if it shortens the contract length to 2 or 3 years; if it eliminates the 5th year option — any of those changes could adversely affect teams’ salary cap mangement. Veteran contracts signed now may need to provide flexibility in 2021 and beyond that may be necessitated by changes to the rookie salary structure.

Summary

These are just a few examples of the issues and uncertainty that lie ahead with regard to salary cap, franchise tags, rookie pay structures and the like. Proactive, forward-looking front offices will have an advantage during the next two offseasons. For the first time in a long time, that description just might apply to the Washington Redskins franchise.