The reason for the uncertainty is the fact that the Collective Bargaining Agreement is set to expire in two years. The CBA was designed to squeeze both players and owners well ahead of its expiration, encouraging both sides to extend the agreement before it expires.
The last two years of the CBA contains poison pills that, while not fatal, limit the dollars that can be paid to players. The first problem is that signing bonuses can only be spread over four seasons. The $16 million bonus paid to Walter Jones last year as part of his seven-year, $52.5 million contact counted $3.2M against the cap in 2005 and beyond. If the same bonus were paid to Steve Hutchinson in 2006, it would count $4 million over the next four years. That $800,000 difference may not seem huge, but consider that the Seahawks signed Joe Jurevicius to a one-year, $850,000 deal in 2005.
The second, and perhaps biggest, problem in 2005 is the fact that contracts may not increase more than 30% into 2007 from 2006. In the past, teams could “leverage the future” to fit players on to the current year. In 2005, the Seahawks signed Andre Dyson to a deal that only counted $1.14M in ’05 but jumps up to $4.26 in ’06. If the Seahawks were to pursue a player like Dyson in 2006, he would have to accept far less money.
The third problem is that teams are less able to clear cap space by cutting veterans after June 1. Essentially, here’s where the Grant Wistrom contract becomes an issue. He’s due to make $3.5 million in base salary in 2006. While he’s been a very good player at times, many could argue that he hasn’t lived up to the 6-year, $33 million deal inked in 2004. If the team were to ask him to take a pay cut, he could easily refuse, knowing that the Seahawks would actually lose $3.5 million in cap space (not the same as his $3.5 million salary, just coincidence). Under the old rules, they could threaten to cut him after June 1 and spread the cap hit into 2007.
2007 is the infamous “uncapped year”. Isn’t that good for Seahawk fans? Doesn’t that mean Paul Allen can spend his billions and buy up every good free agent out there? Sadly, the uncapped year comes with the restriction that players must have 6 years experience before they can hit the open market. Currently, 4-year players (guys like Rocky Bernard) can be free agents. Does two years really make that much difference?
It makes ALL the difference.
Rookie contracts are normally three to five years in length. A good player in the NFL usually only gets one chance at a big payday - the first contract after his rookie deal expires. Take Ken Hamlin, for example. Assuming he comes back in 2006 and plays at a high level, he would otherwise have earned his big payday. In the uncapped year, virtually the entire draft class of 2002 and 2003 is impacted by this restriction: they are forced to either negotiate with their own team, or wait another year for 2008.
Another, more esoteric, provision of the uncapped year is the final 8 teams left in the playoffs are not permitted to sign unrestricted free agents unless they first lose one. This rule shouldn’t have much impact, because there will be very few premium free agents available.
And what awaits in 2008? Does the union de-certify, forcing the league to play under the rules of U.S. District Judge David Doty, while lawyers argue over whether or not the NFL Draft is even legal? If the uncapped year takes place, could it ever come back? To what extremes will the owners go to impose their will on the players?
Everyone seems to have an opinion about Shaun Alexander, but one fact is indisputable. If the CBA isn’t extended in the next 10 days, he will lose millions in potential contract guarantees. In traditional unions, each member is asked to make roughly equal sacrifices to attain common goals. Sports unions are forged from a different kiln. Guys like Grant Wistrom and Matt Hasselbeck and Walter Jones received their big paydays. Alexander and Steve Hutchinson must now sit back and wait. They would be foolish to sign deals knowing that a new CBA could be struck, which would make their new contracts antiquated before the ink is even dry.
The latest reports estimate the 2006 salary cap will be between $92 million and $95 million. If I assume $93 million, and also assume the Seahawks give tender offers to their three restricted free agents (Seneca Wallace, Wayne Hunter and Josh Brown) and their one exclusive rights free agent (Jordan Babineaux), then the Seahawks have between $18 million and $19 million in cap space. If the Seahawks make Hutchinson their franchise player at $6,983,000, that will leave $11 million to $12 million to re-sign Shaun Alexander, Rocky Bernard, Marquand Manuel, Joe Jurevicius and any new faces the team wishes to add.
Tim Ruskell and Mike Reinfeldt have their work cut out for them. The first step will be to plan for two potential worlds: The world with a new CBA and the world without.
Much of what I’m describing here is technical and assumes some prior knowledge of how the salary cap works. Click my column archive to view prior articles about the salary cap or you can e-mail me at email@example.com. You can also share questions on our fan forum.