http://www.nationalfootballpost.com/Chris-Johnson-and-the-30percent-rule.html Chris Johnson and the 30-percent rule by Andrew Brandt APRIL 29, 02010 Print This When the “opt-out” provision of the renegotiated 2006 Collective Bargaining Agreement (CBA) allowed for an uncapped 2010, the idea of a year without a salary cap was thought to be a potential windfall for the players. Teams like the Redskins and Cowboys, it was thought, would engage in unfettered bidding for all the best players, becoming the Yankees and Red Sox of football. Spending on players would rise dramatically. Well, not so much. The 2010 league year – the much-hyped uncapped year – has been, at best, business as usual in the NFL. More realistically, it has been business as management would like it. With no spending floor, teams have not had minimum spending levels and have each set their own “cap” at a figure likely lower than before. APMike Bell was the only restricted free agent to change teams this offseason. Veteran players with high salaries are being shed; restricted free agency saw one player (Mike Bell) change teams, and benefits to players that totaled roughly $10 million per team last year have been cut. Now, another unfortunate side effect of the uncapped year is rearing its head on some of the league’s top young players. 30-percent rule restrictions The 30-percent rule, found in Article XXIV, Section 8 (b) of the CBA, states that renegotiations/extensions entered into in the 2010 league year may not increase per year from 2009 to 2010 or beyond more than 30 percent of the 2009 salary. For example, if the 2009 salary is $2M, the maximum available in 2010 is $2.6M, in 2011 it’s $3.2M, etc. The theory behind the rule was to prevent the dumping of disproportionate amounts of compensation into a year with no cap to regulate spending. The rule was another quid pro quo for what was expected to be an uncapped windfall for players. Especially affected are rising players in the middle of their rookie contracts, all structured with low salaries and previously paid bonuses. The latest player expressing some discontent with his situation is Titans running back Chris Johnson. Johnson is not attending offseason workouts, but his frustration is probably more directed at the system than the Titans. The 30-percent rule is stunting potential deals for young ascending players such as Johnson; receivers DeSean Jackson, Steve Smith (Giants) and Sidney Rice; running backs DeAngelo Williams and Joseph Addai; linemen Ryan Kalil and Nick Mangold; and linebackers Lamar Woodley and David Harris. Frustrating for teams APChris Johnson led the league in rushing yards with 2,006 in '09. Team officials – assuming there was a budget for extensions, which may be rare -- are equally frustrated about not being able to lock up these young players, as it would make good business sense to do so now rather than later. Whether it’s simply a convenient excuse or reality, their hands are tied. As Titans general manager Mike Reinfeldt told the Tennessean newspaper, “With all these deals, the 30-percent rule makes it very, very hard to do.” Johnson made $385,000 in the second year of his rookie contract last season. Under the rule, he’s limited to an increase of $115,000 this year and each year beyond. Signing bonus There is one way around the 30-percent rule, but no team wants to use it. According to Article XXIV (7)(b)(iv) of the CBA, a signing bonus (or a payment that is treated as a signing bonus) does not count toward the rule. In the event the Titans are willing to give Johnson a five-year, $40-million extension, they could satisfy the 30-percent rule in the salary portion of the deal by giving him roughly $37M in signing bonus. No team wants to structure a deal with 80 percent or more in guaranteed signing bonus, money that is essentially gone the moment the player signs the contract. Teams are much more willing to structure large base salaries that may be guaranteed in the future to allow for the possibility of recovery and forfeiture. Although players are frustrated, agents understand. As agent Ben Dogra of the powerful CAA group, which represents a few players in this situation, including Williams, Addai and Panthers lineman Ryan Kalil, said, “For this year at least, your hands are tied.” The rule is a true impediment to getting something done with a rising young player, as these deals likely will not happen until next year at the earliest. As a result, these players become further casualties of the uncapped year.
Wonder how they worked around it, with the Kevin Kolb deal........did they give him the majority of it in a signing bonus?
I'm sure Tanny and crew are well aware of this and may explain all the losses we've had this offseason: TJ, LW, Faneca, Lito, etc.
This rule is something that all GMs have been aware of for sometime. Jason on nyjetscap.com goes into good detail about what can or can't be done in terms of a contract standpoint in the uncapped year. Here is the real issue: What is the cap in 2011 and beyond? Right now players get 60% of the revenue. Owners want that to change so they get 60% of the revenue so they can pay for these huge stadiums. Until there is some idea as to what the cap will be in 2011 (how the revenues will be distributed) and how much the cap will increase by its tough to sign some big players to long term deals. Sure Kolb got signed, but he isn't going to take up a decent amount of cap like mangold and harris would, at least not right now.
I was wondering about this for awhile now....... a signing bonus is pro-rated throughout the contract, correct? In theory, could Woody give Revis and Mangold a huge "roster bonus" this year, with a smaller signing bonus, and average salary in order to circumvent future cap restrictions? (that is if the new stadium hasn't sucked him dry :wink: )
Wasn't Brandon Marshall an RFA that changed teams? I know he was traded, but still I think he should have been mentioned.
He was a RFA and therefore the 30% rule doesn't effect him. He fell under the 4 to 6 year extension on restricted free agency in the uncapped year. Same as Leon and Braylon were this off season. Technically the Jets could give Braylon a large extension but I don't think they had any interest in giving him a big signing bonus.
obviously the gm's are aware of it. A lot of fans are aware of it as well, but a large portion of the fans don't understand why teams aren't giving their young studs a big second contract during the uncapped year. I hope this article explains this.
This is going to be a terrible rule moving forward, putting pressure on the teams as well as the players to get a CBA in place. If David Harris becomes a free agent then the Jets can sign him back for whatever, as any other team can do, however the Jets have no way to lock him up before that happens because his value on the free market will be more than anything the Jets can do under the rule to retain him before he hits free agency. This rule could totally screw up the Jets moving forward if we go through a lockout year in 2011 without getting a CBA in place at the end of the lockout. The players will have no incentive to settle because they want to go to free agency to determine their actual value and the teams will not be able to prevent them from doing so by making market level pre-emptive offers before the player hits free agency.
I really hope they go to a soft cap in 2011 that'll let the NFL teams resign their veterans without the whole contract counting against the cap, a la the NBA.
The people that are whining about their teams not paying bank to players in an uncapped year have such a small attention span that they wouldn't read this article anyway. It's easier to whine than to think.
It sure seems like a matter of interpretation to me. 24.8.b doesn't specifically mention extensions and renegotiations as the article states. It deals with contracts entered into during a capped year. Granted, a contract initially entered into during a capped year and extended in a non-capped year would likely qualify under the 30% rule, but we see plenty of contracts under this CBA which didn't follow that heading into this season. Either way, the section specifically states: Again, only an implication that those contracts cannot be extended. However, I don't see anything stopping teams from tearing up old contracts and entering into new ones. If Woody wanted to, in other words, he could increase the contract number of players due for FA next season by simply offering new deals that start this season and extend into the future. Again, the section applies to contracts "entered into in a Capped year", which certainly doesn't apply here. If we want to get some of our players under contract for the future, negotiate a new contract and tear up the old one. Of course, Section C, which actually deals with renegotiations and extensions says absolutely nothing about the 30% rule.
It's a stupid rule that doesn't take into account the reality of later round (meaning after the first half of the first round) players turning into stars. It's a completely broken mechanic that will achieve the goal of keeping teams from paying a lot of upfront money during an uncapped year while ignoring the fact that two-thirds of all players that are actually re-signed to new contracts get substantially more than a 30% raise, many getting like 300%+ raises per their performance. I'll be really pissed if this rule is still around come next spring. It's just stupid.
Here's what upsets me about this article: the CBA itself doesn't say that a new contract is limited by the previous year. In fact, it's not even talking about contracts signed in an uncapped year. It specifically says "No NFL Player Contract entered into in a Capped Year". There is nothing in there to prevent a player who earned x dollars last year from signing a new contract that triples his salary last season. Otherwise, Brandon Marshall couldn't have gotten his fat new contract, especially since many speculate his first year is his tender value. The references to 2011 are pre-opt out. Change 2011 to 2009 in that whole section. The only other reference I've seen to the 30% rule has to do with attempting to get around the F8P in an uncapped year. I haven't seen anything in there that says contracts entered into in an UNcapped year have to follow 30%. It seems it's just old contracts, which merely precludes renegotiation and extension on a strict basis. It doesn't prevent teams from going into an entirely new contract. I'd imagine agents feel hampered only because the teams their players play for don't want to massively increase their players' contracts this season by starting whole new contracts. Again, there might be a part of the CBA I haven't read that deals with it, but the one referenced in the article certainly doesn't prevent teams from locking up their young stars.
