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The 2011 CBA Has A Salary Cap "Carry Over" Clause


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#1 ICanSleepWhenI'mDead

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Posted 21 January 2012 - 01:43 AM

The current 2011 CBA is publicly available, and runs a little over 300 pages (including attachments).  It contains the salary cap rules because those rules were agreed upon by the owners and the NFLPA as part of the collective bargaining process.  Here's a link to the current CBA:

http://images.nflpla...les/2011CBA.pdf

About the only thing I can remember being less clearly written than the salary cap rules is the federal tax code.  So let me say right up front that I could be wrong about this.  But I think I found a section of the CBA that allows teams to carry over unused salary cap room from one season to the next if they choose to do so.

So if that's true, how come we've never read about it in the press or heard the talking heads on ESPN mention it?  That's a fair and good question that I could only speculate about.  But nonetheless, I'll show you what the relevant parts of the 2011 CBA actually say about the matter - - you can form your own conclusions about whether I've interpreted them correctly.

Like many legal documents, the 2011 CBA starts by defining some of the terms it uses.  Here are a few you need to know:

From the Article 1 definitions at pages 1-4 of the CBA:

Quote

"League Year" means the period from March [_] of one year through and including March [_] of the following year, or such other one year period to which the NFL and NFLPA may agree.

* * * * * * *

"Room" means the extent to which a Team's then-current Team Salary is less than the Salary Cap (as described in Article 13), and/or the extent to which a Team's Rookie Salary is less than the Year-One Rookie Allocation (as described in Article 7).

* * * * * * *

"Team Salary" means the Team's aggregate salary for Salary Cap purposes, as caluclated in accordance with the rules set forth in Article 13.

* * * * * * *

"Salary Cap" means the absolute maximum amount of Salary that each Club may pay or be obligated to pay or provide to Players or Player Affiliates, or may pay or be obligated to pay to third parties at the request of and for the benefit of Players or Player Affiliates, at any time during a League Year, in accordance with the rules set forth in Article 13.

So now you have skip ahead to Article 13, entitled "Salary Cap Accounting Rules," which starts at page 90 of the CBA.  Article 13 contains 8 subsections and runs on for about 20 pages.  But buried in subsection 6 (entitled "Valuation of Player Contracts"), you find this little gem at page 96:

Quote

(v)  Carrying Over Room.  A Club may "carry over" Room from one League Year to the following League Year by submitting notice in writing signed by the owner to the NFL no later than fourteen (14) days prior to the start of the next League Year indicating the maximum amount of Room that the Club wishes to carry over.  The NFL shall promptly provide a copy of any such notice to the NFLPA.  The amount of Room carried over will be adjusted downward based on the final Room available after the year-end reconciliation.

That sure sounds to me like any team that is under the salary cap for the current 2011 League Year can simply give written notice to the NFL that it wants to add any unused 2011 Salary Cap to its maximum allowable Salary Cap for 2012.  I keep reading that the Bills are considerably under the 2011 Salary Cap.  If the Bills continue to follow an internal policy of counting signing bonuses in full in the year actually paid, they will ALWAYS have unused salary cap room every single year.

My question - - Will Ralph Wilson bother to send a written notice to the NFL next month asking to have the Bills unused cap room "carried over," or will he squander the opportunity to gain that competitive advantage?

If you want to win the Super Bowl, why wouldn't you simply always tell the NFL that you wanted to "carry over" unused cap room rather than losing it?  If I've interpreted the CBA correctly, somebody in the media ought to ask Wilson/Littmann/Nix/Overdorf if they plan to "carry over" this year's unused salary cap room, and if not, why not.

Has anybody even heard of this "carry over" provision before?

Edited by ICanSleepWhenI'mDead, 21 January 2012 - 01:57 AM.


#2 Zulu Cthulhu

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Posted 21 January 2012 - 05:52 AM

The clauses you cite seem pretty straightforward and I think you've interpreted them correctly.

The question that remains is how much room as defined by the CBA the Bills actually have. If it's significant, of course a team committed to winning would surely send notice to the league to carry it over and potentially spend more the next year. I'm not sure the Bills fall into that category of team, however.

Good digging BTW.

#3 Why So Serious?

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Posted 21 January 2012 - 08:18 AM

Why don't you do some digging on spending in the NFL.

When you realize that 32/32 NFL teams are under the cap. MANY by a greater margin than the Bills you'll understand that if true, carrying over "cap room" wouldn't be a competetitve advantage.

#4 NoSaint

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Posted 21 January 2012 - 09:04 AM

Haven't many teams done this regularly with bonus money? I don't remember the ins-and-outs but (un?)likely to be earned bonus money being at the core of the carryover issue if I'm remembering correctly. I'm on my phone but encourage you to google around on the topic some

Edit: Did a quick google and this is the first article to pop. Only skimmed but it seems to be on the subject (quality not vouched for as it was a brief glance on my part).

http://www.sportsage...o-be-earnednot/

#5 Tom

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Posted 21 January 2012 - 09:05 AM

I understand the Eagles have been using this for years.....

#6 8and8Forever

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Posted 21 January 2012 - 10:00 AM

View PostICanSleepWhenI, on 21 January 2012 - 01:43 AM, said:

The current 2011 CBA is publicly available, and runs a little over 300 pages (including attachments).  It contains the salary cap rules because those rules were agreed upon by the owners and the NFLPA as part of the collective bargaining process.  Here's a link to the current CBA:

http://images.nflpla...les/2011CBA.pdf

About the only thing I can remember being less clearly written than the salary cap rules is the federal tax code.  So let me say right up front that I could be wrong about this.  But I think I found a section of the CBA that allows teams to carry over unused salary cap room from one season to the next if they choose to do so.

So if that's true, how come we've never read about it in the press or heard the talking heads on ESPN mention it?  That's a fair and good question that I could only speculate about.  But nonetheless, I'll show you what the relevant parts of the 2011 CBA actually say about the matter - - you can form your own conclusions about whether I've interpreted them correctly.

Like many legal documents, the 2011 CBA starts by defining some of the terms it uses.  Here are a few you need to know:

From the Article 1 definitions at pages 1-4 of the CBA:



So now you have skip ahead to Article 13, entitled "Salary Cap Accounting Rules," which starts at page 90 of the CBA.  Article 13 contains 8 subsections and runs on for about 20 pages.  But buried in subsection 6 (entitled "Valuation of Player Contracts"), you find this little gem at page 96:



That sure sounds to me like any team that is under the salary cap for the current 2011 League Year can simply give written notice to the NFL that it wants to add any unused 2011 Salary Cap to its maximum allowable Salary Cap for 2012.  I keep reading that the Bills are considerably under the 2011 Salary Cap.  If the Bills continue to follow an internal policy of counting signing bonuses in full in the year actually paid, they will ALWAYS have unused salary cap room every single year.

My question - - Will Ralph Wilson bother to send a written notice to the NFL next month asking to have the Bills unused cap room "carried over," or will he squander the opportunity to gain that competitive advantage?

If you want to win the Super Bowl, why wouldn't you simply always tell the NFL that you wanted to "carry over" unused cap room rather than losing it?  If I've interpreted the CBA correctly, somebody in the media ought to ask Wilson/Littmann/Nix/Overdorf if they plan to "carry over" this year's unused salary cap room, and if not, why not.

Has anybody even heard of this "carry over" provision before?

Makes sense, but why would you ever do it?   What happens in the year AFTER the carryover year, when your cap number falls by whatever your carryover amount was?    You guessed it, you are cutting half the team to get under the number.   It is a very short term opportunity if you were under the cap in a particular year.   Sort of a Dan Snyder esque "all or nothing strategy"  where you go for the huge payroll for one year only to have to cut half the team the next year to get under your true cap number.   Insane.   No owner is going to do that.

#7 NoSaint

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Posted 21 January 2012 - 10:11 AM

View Post8and8Forever, on 21 January 2012 - 10:00 AM, said:

Makes sense, but why would you ever do it?   What happens in the year AFTER the carryover year, when your cap number falls by whatever your carryover amount was?    You guessed it, you are cutting half the team to get under the number.   It is a very short term opportunity if you were under the cap in a particular year.   Sort of a Dan Snyder esque "all or nothing strategy"  where you go for the huge payroll for one year only to have to cut half the team the next year to get under your true cap number.   Insane.   No owner is going to do that.
Or.... You could put bonuses in one year. And keep salaries lower in the future.

You don't pay guys the same amount every year.

Edited by NoSaint, 21 January 2012 - 10:12 AM.


#8 HalftimeAdjustment

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Posted 21 January 2012 - 11:45 AM

View PostNoSaint, on 21 January 2012 - 10:11 AM, said:

Or.... You could put bonuses in one year. And keep salaries lower in the future.

You don't pay guys the same amount every year.

Aren't bonuses required to be spread out for cap accounting purposes?

#9 NoSaint

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Posted 21 January 2012 - 12:04 PM

View PostHalftimeAdjustment, on 21 January 2012 - 11:45 AM, said:

Aren't bonuses required to be spread out for cap accounting purposes?
absolutely not. only signing bonuses get spread. the bills utilize roster bonuses which hit in one year. this is one way the cash to cap is a pretty good system once you take the initial hit of cycling through contracts. depending on the language used, i am pretty sure the bills paid fitz a 10m roster bonus when he resigned last year. instead of eating up 2.5 per year the next 4 years, the roster bonus (if im correct thats what they used) hit 100% in last year. all the cash went to last years cap using up 10m we were already under in 2011, and giving us 7.5m over the next 3 years that would otherwise be accounted for already if it were a signing bonus.

it also prevents dead money when you cut someone early, as you dont have to accelerate all the money. hence if the bills cut fitz it wouldnt accerate that 7.5m all into the 2012 cap. its spent, it hit the books in the year it was spent and you can move forward to the next deal with a clean slate instead of having old bonuses hanging over you when you manage the roster.

Edited by NoSaint, 21 January 2012 - 12:09 PM.


#10 Beerball

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Posted 21 January 2012 - 01:14 PM

link

Quote

Cap control

Why so few contract extensions at the end of the year?
Not sure, although certainly not for lack of Cap room. NFL teams collectively had more than $300 million of unused Cap room when the 2011 books closed Saturday.

What happens to all that unspent Cap room?
The new CBA allows teams to carry forward unused Cap room. Thus, some teams will be bringing over $20 million of 2011 Cap room with them into 2012, adjusting their Cap upwards by that amount.

link II

Quote

Cap Room

The new CBA has, for the first time, provided teams a valuable benefit: the ability to carry over remaining Cap room into the following year.

In the past, teams would have to go through the charade of “dummy incentives” in order to bring forward Cap room into the next year. I would usually negotiate with our third-string quarterback in the final week of the season with a bonus of “$10 million for 7 touchdown passes.”

The $10 million would then count on the existing Cap and, when unearned, be credited to the next year’s Cap (although there was a scary moment one year where the player with the bonus, Craig Nall, ended up playing most of the final game due to having clinched our playoff spot!).

Teams no longer need to go through that charade.  Thus, teams will have adjusted Caps of much more than the projected 2012 Cap number of around $125 million. A team like the Buccaneers, for example, with $25 million remaining in Cap room, may have an adjusted 2012 Cap of close to $150 million.

The question for the NFLPA is: will teams actually spend all of this Cap room? Keep in mind, there are no team spending minimums until 2013, and teams can “free ride” this year and next.


#11 Sisyphean Bills

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Posted 21 January 2012 - 01:23 PM

Somehow, I don't think Buddy Nix keeps the unspent cap money in stacks of bills in his desk.

#12 Beerball

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Posted 21 January 2012 - 01:27 PM

View PostSisyphean Bills, on 21 January 2012 - 01:23 PM, said:

Somehow, I don't think Buddy Nix keeps the unspent cap money in stacks of bills in his desk.
Somehow I don't think that Littmann, Brandon  and Overdorff plan to move that unspent 2011 money into 2012, but I hope that I'm proven wrong.

#13 NoSaint

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Posted 21 January 2012 - 01:31 PM

View PostBeerball, on 21 January 2012 - 01:14 PM, said:


ah - so they officially did recognize most teams doing what i earlier spoke of, and just allowed it. interesting update.

#14 FrankReichComeback

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Posted 21 January 2012 - 01:33 PM

Is it just me...or did the Bills have a a LOT of cap space that they never used going into the season?

#15 Sisyphean Bills

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Posted 21 January 2012 - 01:52 PM

View PostBeerball, on 21 January 2012 - 01:27 PM, said:

Somehow I don't think that Littmann, Brandon  and Overdorff plan to move that unspent 2011 money into 2012, but I hope that I'm proven wrong.
I'm not sure how many executives would be willing to give back their bonuses to their company so it could spend more on the rank and file.  Wasn't there some unhappy customers sitting around in cities, parks, etc. recently?

#16 Carey Bender

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Posted 21 January 2012 - 02:23 PM

View PostHalftimeAdjustment, on 21 January 2012 - 11:45 AM, said:

Aren't bonuses required to be spread out for cap accounting purposes?
No, that's the "cash to the cap" basis that the Bills use.

View PostFrankReichComeback, on 21 January 2012 - 01:33 PM, said:

Is it just me...or did the Bills have a a LOT of cap space that they never used going into the season?
It depends on the basis that the cap space is determined by. The Bills along with the majority of the teams in the league use the cash to the cap basis. My assumption is the lists that come out amortize the bonuses over the entire contract.

#17 Beerball

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Posted 21 January 2012 - 02:29 PM

View PostSisyphean Bills, on 21 January 2012 - 01:52 PM, said:

I'm not sure how many executives would be willing to give back their bonuses to their company so it could spend more on the rank and file.  Wasn't there some unhappy customers sitting around in cities, parks, etc. recently?
This is money UNspent in 2011 that can be added to the 2012 cap.  I'll bet you several teams take advantage of this as a way of improving their team.

#18 Carey Bender

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Posted 21 January 2012 - 03:12 PM

Quote

Cap Room

The new CBA has, for the first time, provided teams a valuable benefit: the ability to carry over remaining Cap room into the following year.

In the past, teams would have to go through the charade of “dummy incentives” in order to bring forward Cap room into the next year. I would usually negotiate with our third-string quarterback in the final week of the season with a bonus of “$10 million for 7 touchdown passes.”

The $10 million would then count on the existing Cap and, when unearned, be credited to the next year’s Cap (although there was a scary moment one year where the player with the bonus, Craig Nall, ended up playing most of the final game due to having clinched our playoff spot!).

Teams no longer need to go through that charade.  Thus, teams will have adjusted Caps of much more than the projected 2012 Cap number of around $125 million. A team like the Buccaneers, for example, with $25 million remaining in Cap room, may have an adjusted 2012 Cap of close to $150 million.
http://www.nationalf...ks-on-2011.html

#19 silvermike

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Posted 21 January 2012 - 03:32 PM

The question is if you carry over cap room, are you still bound by a floor on the new amount?

#20 Beerball

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Posted 21 January 2012 - 03:44 PM

View Postsilvermike, on 21 January 2012 - 03:32 PM, said:

The question is if you carry over cap room, are you still bound by a floor on the new amount?
Good question for 2013. In 2012 teams won't be required to spend a certain amount, the calculation is based on all teams combined.  Starting in 2013 I would guess that you would be required to spend up to the league cap, but good question.