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In a Perfect World: A Look Back at the 'Skins Major Offseason Moves

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View Poll Results: Which would have been better, "my plan" or how things actually worked out?
Ramseyfan's plan (yes I know hindsight is 20/20) 3 9.68%
Dan Snyder/Joe Gibbs' plan (how the offseason actually played out) 28 90.32%
Voters: 31. You may not vote on this poll

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Old 07-23-2004, 06:14 PM   #61
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Quote:
Originally Posted by hurrykaine
Another thing to consider, Ramseyfan, is that the cap number increases by atleast 3-4 million every year.

In 2001, it was around 67 million,
In 2002, it was 71.1 million
In 2003, it was 75 million,
and this year it is almost 79 million.

Assuming the same pace keeps up, in 3 yrs, the cap will be close to 93 million - which will give us an extremely decent cushion against deadmoney and backloaded contracts from the current roster. When Gibbs, Cerrato and our cap experts say they have a plan and they're not concerned about the future cap, I assume this is what they're referring to. Plus, it is conceviable that we could get the likes of LC, Samuels, etc. to restructure.
Actually, the cap this year was increased to $80.582 million, due to higher-than-projected league-wide DGR (Defined Gross Revenue). As Hogskin pointed out, and as I have explained repeatedly in the past, the salary cap is projected to see a significant spike in 2005-2006, due to the new TV deal that will have to be consummated in that timeframe.

As a frame of reference, let's look (once again) at the salary cap over the past 10 years:

  • 2004: $80.582 million
  • 2003: $75.007 million
  • 2002: $71.100 million
  • 2001: $67.400 million
  • 2000: $62.172 million
  • 1999: $58.353 million
  • 1998: $52.388 million
  • 1997: $41.450 million
  • 1996: $40.777 million
  • 1995: $37.100 million
  • 1994: $34.600 million

Notice that nearly $11 million spike in 1998? That was a direct product of the last TV deal that was negotiated in January of 1998. It was after this deal was put in place that league-wide DGR really started to swell, and the salary cap surged along with it (as the cap is a pre-determined percentage of DGR).

Considering the booming popularity of the NFL over the past few years, it's not incomprehensible that the cap spike in 2006 could well exceed the one seen in 1998. The cap spike in 1998, which was $10.938 million (or a whopping 26.39% increase over the previous year's cap!) would obviously pale in comparison to the $22.85 million spike the cap would see in 2006 if the cap were to increase by the same percentage as it did in 1998.

However, let's be a little more conservative than that, and assume that the market value increase for the TV deal-- and thus the DGR and salary cap-- begins to level off at some point. Let's say that the percentage increase in the cap in 2006 is only half of what it was in 1998. Even then, you're still looking at a 13.2% increase, which would boost the cap by $11.43 million dollars-- still exceeding the '98 increase by half a million dollars!

Now if you consider that the average annual growth in the salary cap since the 1998 TV deal has been 7.46%, that would give us a projected 2005 salary cap of $86.593 million. Increase that by our conservatively estimated $11.43 million boost brought about by a 2006 TV deal, and that gives you a projected 2006 salary cap of $98.023 million. Again, that's a conservative estimate. It's entirely possible that figure could be in the $105 million to $110 million range.

So yes, Dan Snyder may have paid more than the market value for some of the players he recently acquired, and yes, the backloaded nature of their contracts will indeed rob the team of some cap space at some point-- that's inevitable-- but what isn't so certain is that this franchise will ever actually go to "salary cap hell", or "purgatory" or "jail". I would expect there will be a few cap cuts along the way, and the team will carry its standard amount of dead money around over the next 5-7 years, but what most of the salary cap alarmists fail to recognize in their repeated damning of the Redskins' cap finances is the mollifying impact of the 2006 TV deal.

Yes, the Redskins have a lot of big contract numbers coming up in 2006, but there's going to be a pretty forgiving salary cap in 2006 as well... at least according to the terms of the current CBA, which expires in 2007 (which happens to be an "uncapped" year). Now what happens after that is up to the owners and the NFLPA. More than likely, there will be a new CBA or an extension of the current agreement in place before the 2007 NFL year begins, and that "uncapped year" will never come to fruition. But the 2006 cap allotment (65% of DGR) is set, and you can be darned sure that Dan Snyder and Jerry Jones-- two of the league's biggest revenue generators-- are going to fight to see that their competitive edge in the free agency market (the ability to project greater buying power through the use of large, prorated signing bonuses, and other cap tricks) is not taken away from them in 2007 and beyond.
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Old 07-23-2004, 09:13 PM   #62
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thanks for an informative post, that's kinda what i'd figured... they'd just push it further down the road... it'd give them a disadvantage with dead money vs. other clubs, but as long as the growth continues, they can sustain the creative accounting for a while.

I didn't realize has much the cap has balloned in such a short amount of time though...
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Old 07-23-2004, 11:22 PM   #63
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yeah that's pretty crazy and pathetic that the salary cap has gone up $46 million in just 10 years.
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Old 07-23-2004, 11:30 PM   #64
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Thanks for the terrific, informative post, Joe.
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