Salary Cap Nuggets - No. 3: Do teams in the playoffs face unfair salary cap issues? Salary Cap Charges vs. Player Benefit Charges

This series is called Salary Cap Nuggets because ‘nuggets’ is such an interesting word in English. It calls to mind chicken nuggets - tasty, bite sized and easy to eat. But it also calls to mind gold nuggets - small, but valuable.

The salary cap is a product of the Collective Bargaining Agreement (CBA), which is a 301-page contract between the NFL Owners and the NFL Players Association. In these articles, I try to explore just one or two small parts of the NFL salary cap defined in the massive CBA. Hence, Salary Cap Nuggets - small, bite-sized, easy to digest, yet valuable information for NFL fans.

The goal is to, one bite at a time, get a clear understanding of the salary cap.

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Click this link for handy access to all the Salary Cap Nuggets

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There’s a question that has bothered me for years, and to which I’ve never known the answer.

How do playoff teams handle the salary cap?

What I mean is, they have to keep playing after the regular season ends.

• Do they get a salary cap credit?
• Is there some other mechanism... some special dispensation that is used to allow them to keep paying their players?

Well, while reading the book Crunching Numbers this past week, I found information that answered that question.

Teams pay a lot of costs that relate to players (called, interestingly enough, “Player Costs), but, as it turns out — and this is something I just learned this week from the book — there are only two “buckets” for player-related costs:

• Salary Cap Charges; and
• Player Benefit Charges

Basically, anything that is not a salary cap charge is a “Player Benefit Charge” because the CBA just isn’t any more granular than that, which leads to some odd items landing in the “benefit” bucket.

The authors of Crunching Numbers had this to say:

The category of player benefits actually causes some confusion because many of the payments that are considered benefits seem like they are related to playing the game of football.

What you’ll see is that some of the items that end up in the ‘benefit’ bucket look like they should end up somewhere else, but — because ‘Player Benefit Charges’ are defined simply as any player cost that is not salary cap charge — the benefit bucket has to hold an odd assortment of costs that don’t seem to fit together neatly.

The one that seems, to me, the most unlikely to be found in “Player Benefit Charges” is first item on the right side of the chart below, which appears on page 20 of the Crunching Numbers book; that is, “Postseason Salary”.

Here’s the logic:

The league, via the CBA and its salary cap provisions, is aiming to create a “level playing field” for all 32 teams to promote parity and competitiveness. The basic test of the usefulness of the salary cap is whether it puts all 32 teams into the same circumstances - whether each franchise faces the same limitations fairly.

One obvious difference between teams is that twelve of them play in the post-season, and some teams keep playing — as many as three or four postseason games — until the Super Bowl winner is decided.

This raises a question about finding a fair method of administering the salary cap that allows for playoffs without either unfairly punishing or rewarding playoff teams in the salary cap calculations.

I expected to find some complex system of credits or adjustments in place, but what I’m learning more and more is that the CBA avoids complex formulas and adjustments.

It is, by design, primarily a pragmatic document.

The owners and players created a system that doesn’t require salary cap adjustments for playoff teams because postseason player costs are not charged to the salary cap.

This seems a bit counter-intuitive; how can the money paid to players for playing football during the playoffs not be counted towards the salary cap?

The logic lies in the idea that charging postseason playoff costs to salary cap would (i) create ‘unequal’ treatment between teams, meaning that the ‘level playing field’ would no longer exist; and (ii) a complex arrangement would need to be put into the system to re-level the field, and any such system would be flawed.

The pragmatic CBA avoids these issues entirely by simply saying that postseason player costs are not part of salary cap charges.

Since we only have two buckets for player costs, postseason player costs are classified as “Player Benefit Charges”, remembering that the definition of this category is any player costs that are not part of salary cap charges.

It makes a bit more sense, perhaps, since individual teams don’t foot the bill for the playoff costs, Instead, playoff money comes from a league pool — so, a benefit.

In the most recent playoffs, these are the amounts that were paid to players:

Wild Card Round:

• Division Winner: $29,000
• Wild Card Team: $27,000

Divisional Round: $29,000

Conference Championship: $54,000

Super Bowl Winner: $118,000

Super Bowl Loser: $59,000

Perhaps it would have been clearer (less confusing) to have given a different name to the second group of costs; perhaps instead of “Player Benefit Charges”, the category should have been “Other Player Charges”, but that isn’t what happened. The CBA defines the two buckets as shown in the chart above, and those are the labels used throughout the agreement.

This handy chart helps us casual fans identify what gets charged to salary cap and what doesn’t. Just remember that the “Player Benefit Charges” is a ‘catch all’ bucket for any player cost that isn’t charged to the salary cap.

Now, at least, I can stop losing sleep over the question of how playoff teams handle the salary paid to players in the post season.