DeMaurice Smith: Fuzzy Math and Negotiations

I've been going over the transcript of the exclusive interview SB Nation had with NFLPA head DeMaurice Smith to make sure I was able to fully understand what I listened to on Friday morning. Smith had some explosive comments regarding NFL's lead negotiator Jeff Pash's comments about the NFLPA only wanting to discuss money at the negotiating table. As far as what I didn't understand and needed to get a better grasp: DeMaurice Smith's math.

I'm not a mathematician and neither is Smith, but something about his math and what the NFL owners were making and pocketing didn't make sense to me. Let's try to break it down after the jump.

During the exclusive interview with SB Nation, Smith went on for a long while about the "good deal" that was proposed to the NFLPA by the NFL on Friday. DeMaurice Smith repeatedly reference the proposed deal as what would have been seen as the "worst deal in the history of sports." How did Smith qualify his statement?

Like this:

Smith made note that the salary cap under normal league growth would be about $155 million, which is assuming only a 5% growth from 2010 to 2011 whereas the league has been averaging 8-9% growth each year. However, for Smith's breakdown of the financial's we'll use his $155 million cap number for 2011. Smith also made note of an unknown fact that each NFL team did not pay player benefits in the 2010 uncapped season, saving the owners $10 million per team, for a league wide savings of $320 million. Below is a chart showing what the projected cap number would be under the now defunct CBA and what it would be under the NFL's proposed deal, and what DeMaurice Smith deemed as "savings" for the NFL.

Year NFLPA NFL "Savings"
2010
$320M
2011 $155M $141M $448M
2012 $163M $147M $512M

 

Smith then goes on to say that each year under the NFL's proposal, the NFLPA's split of the revenue would decrease each season. "Last year we were at 48.9%. We've had a fifty-fifty split of all revenue with the NFL since approximately 1991. 60% is after they take their billion off the top. Once you include all revenue, it's been a fifty-fifty split since about 1991," Smith told SB Nation on the call.

It seems Smith is assigning the cap being lowered for each team as "savings" for the 32 clubs. "So you take $320 million from '10, $448 million in year one or 2011, $512 million in 2012 - I come up with $1.36 billion. By the time you get to 2012, that's the first two years of the deal. $1.36 billion out of the first two years alone. Progressively worse from there after. Going back to the three points where we started, the reason why I believe it's the worst deal in the history of sports is," Smith explained.

Here in lies the problem with DeMaurice Smith's usage of the salary cap levels as a basis for revenue and money being saved or pocketed: The salary cap is just that. It's a cap. It's not a single check cut to each NFL franchise that can be spent and the left over pocketed. It's a limit on what a team can spend. The cap itself in all reality isn't important.

In 2009, the last time a salary cap was in place, it was set at $128 million. Of the 32 NFL franchises, 31 teams were under the cap. The only team who was "over" the salary cap were the New Orleans Saints, by $1 million. The average given the total salary numbers across the league were teams being under the cap by $18.9 million. So, even using Smith's "savings", it wouldn't be close to the same amount teams weren't spending when the cap was in place.

As I said before, the cap is not an accurate way to look at where teams are "saving" money. Proposing a lower cap isn't money directly in owners pockets. I was speaking with John Bena of MileHighReport.com, as we were both trying to understand where exactly Smith was coming from. Bena brought up a fantastic point about how the cap isn't relevant, but the salary floor is actually what's important.

While both sides are doing a great job of spin, I love how nothing is brought up regarding the Salary Cap floor.  Sure, if the cap drops from $156 million to $142 million it looks like a big deal.  

How many teams spend to the Cap anyway?  

In 2009, the cap floor was $107.9 million on a cap of $128 million.  The Owners offer - if it is honest and true - said that there would be a guaranteed cap floor of 90% for the first three years.

In the example above, that would have been a floor of $115.2 million, or $7.3 million more per team.

So, while Smith can thrown out that a $14 million give back per team is reason to walk, that number is fake because not all teams will spend to the cap number anyway.  

The floor IS a real number because teams HAVE to spend to that number.  $7-$10 million per team is $224 - $320 million back to the Union.

It's a very complicated and convoluted process, but in the points Smith made to us and examining them, it just seems like fuzzy math. If the proposed salary cap of $155 million is lowered to $141 million, teams aren't necessarily saving anything. They're also not pocketing $14 million dollars.

Now, it's also very possible I'm completely missing the point and it's way over my head. I'll freely admit that, but something about the discussion just didn't sit right.

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