I was very confused when I learned yesterday that the NFL would be penalizing the Redskins and Cowboys for contracts they re-worked in the uncapped year. It seemed very strange because the NFL seemingly lets teams re-work deals all the time so that they can free up cap space. So what was so different about what the Redskins and Cowboys did that got them into trouble?
First of all, most teams normally use restructuring to free up cap space. The NFL seemingly knew that an uncapped year could be used by teams to circumvent future salary caps by dumping as much salary as possible into 2010 as the uncapped year. They warned teams against doing it a reported six different times with letters from the front office. Those letters apparently warned teams that they risked being punished under the rules of the new CBA if they engaged in activities that would lead to circumventing the re-established salary cap. The Redskins and Cowboys gambled, and if the NFL’s penalty holds up, they will be punished.
Still, what, exactly did they do that broke the rules?
The Redskins are the most egregious example. In 2010 the Redskins were slated to have a salary number of $141.6 million. This included large salaries and bonuses for Albert Haynesworth and Deangelo Hall. The Redskins had a $21 million option bonus for Haynesworth that they converted to a signing bonus. No problem there. Teams do this all the time. They convert it into a signing bonus and then they can spread the bonus out over the length of the deal. This routinely saves cap space for teams that owe superstar players large bonuses. The NFL has no problem with it.
The Redskins didn’t aim to spread the contract out, though. They aimed to dump it in 2010. The problem this time is that the NFL had this one uncapped year. The Redskins used a sneaky little provision in the contract called a “voidable” provision. This means that Haynesworth would take the $21 million signing bonus and then he could void his own contract at any time after 2010. Of course in order to void his deal, Haynesworth would have had to pay back his signing bonus or at least some arbitrator-determined unearned portion of it. As we all know, that was never ever going to happen. But that little provision allowed the Redskins to take every penny of Haynesworth’s signing bonus and apply it to 2010 as opposed to spreading it out over the length of the contract.
Taking all the salary in one season is fine in a normally capped season because you are taking the hit presumably under the cap to create future flexibility. The Redskins used this one-off season to create future flexibility because they have an owner with extremely deep pockets.
The Redskins did the same thing with Deangelo Hall and all of a sudden instead of taking $141.6 million in 2010, the Redskins took $170 million all at once. So all of a sudden when the new CBA got signed the Redskins and their fans were sitting flush and ready to go with $31+ million under the cap. The NFL deemed that to be abusive to the system, got the player’s association to sign off on it and the penalties were levied in the amounts of Haynesworth’s $21 million and Hall’s $15 million for a total of $36 million.
ProFootballTalk is making noise about how this equates to collusion of NFL teams against the player’s association and I don’t have much standing to disagree, necessarily. At the same time, it is in the best interest of the league to have some form of level playing field financially. If the NFL wanted to have some kind of “amnesty” rule like the NBA then it would have been fair because every team could have done it.
Say what you want about Roger Goodell and the NFL, but this is one of the nice things if your team is in a small market. Rich guys like Daniel Snyder and Jerry Jones push the limits of the rules because they have the most money and they don’t get away with it. Some may argue that these two teams played within the rules, but we should all be able to agree it was outside the spirit of the rules. It is in the NFL’s best interest to keep people from constantly pressing the boundaries of the rules.