NFL Salary Cap – Wrapping up Player Cost Amounts and Player Benefits

For those of you that regularly visit The Football Educator you’ve probably noticed a series of 9 somewhat “mundane” posts dealing with the various inputs into and definitions of Player Cost Amounts and Player Benefits.

These are the two primary contributors into calculating the annual NFL Salary Cap as legislated by the recent extension of the Collective Bargaining Agreement between the League (NFL) and the Players’ Union (NFLPA).  I saw a necessity to break this down in order to fully understand where revenues come from in professional football and where they are quickly sent.

Getting to the Salary Cap equation

TGC Salary Cap EquationSome fans that I’ve exchanged tweets and emails within the past have a somewhat contorted notion of the availability of resources for NFL owners to go out and sign new free agent players when the need might arise.  The answer to a hole at left offensive tackle or right cornerback is to wait for the TV checks to arrive in the mail and then go spend, spend, spend.

Sure, the Salary Cap is put in place to curb the otherwise overzealous coaches, GM’s, and at times owners from trying to BUY a Super Bowl Championship.  But CAP dollars don’t equal CASH dollars under this system.  An NFL club can hoard all the CAP dollars it wants (up to a certain extent under minimum spending rules) but it won’t buy them the next Peyton Manning on the market.

TGC Cash is KingIn the National Football League CASH is king and there are other obligations that NFL owners have with their cash that must be attended to.  Some of these are public, as stated in the financial responsibilities of Player Costs and Player Benefits.  But many are private and not shared openly with the general public and or the media.

It’s hard to imagine doling out close to a billion dollars to buy an NFL club and then not wanting to jump in the competitive fray of chasing a Super Bowl Championship, but do you honestly think that every club has the WILL to invest in a similar manner that some of the perennial playoff contenders do?  I think not.

TGC NFL Owner Empty PocketSo keep in mind that NFL owners do have to spend a reasonable amount (89% of the CAP as legislated by the CBA) to put together their rosters, but they’re also asked to cover a number of personal obligations (both seen and unseen) that CAP dollars just can’t buy.

Below is a quick review of the simple equation that leads to the annual Salary Cap.  Player Costs and Player Benefits are linked to the applicable posts that attempt to define a few of the details regarding the components that make up each of the two categories.  Mundane? Yes.  Essential to understand?  Yes.

A simplified equation;

Player Cost Amounts – Player Benefits / 32 NFL Clubs  = NFL Team Salary Cap

Player Cost Amounts 

Player Benefits

A few more details still need to be addressed in our next post to clean up the Salary Cap calculation.  Then we can move on to more exciting issues – spending the money.

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Comments

  1. […] NFL Salary Cap – Wrapping up Player Cost Amounts and Player BenefitsTFE summarizes the past 9 posts that have defined the components of the NFL Salary Cap equation; Player Cost Amounts and Player Benefits. […]

  2. […] NFL Salary Cap – Wrapping up Player Cost Amounts and Player BenefitsTFE summarizes the past 9 posts that have defined the components of the NFL Salary Cap equation; Player Cost Amounts and Player Benefits. […]