The 2014 NFL salary cap is reportedly going to now be $133 million and steadily increase each season. This means the Jacksonville Jaguars will have well over $50 million in cap room to spend if they so desire, but they can also just sit on all of it they wish.
But what about the 89 percent cash spending rule under the new collective bargaining agreement, you ask? It's not what many think it is and in reality the Jaguars shouldn't really be effected by it.
89% spending from 2013 through 2016
The typical misunderstanding with the 89 percent rule is the belief that teams have to spend 89 percent of the cap each season, meaning with a cap of $133 million they would need to spend at minimum roughly $118.4 million. This is incorrect, because the rule does not apply to a single season, but is a cumulative number over the course of four seasons.
For the 2013 season, the Jaguars spent only 70 percent cash against the cap which means they have catching up to do to reach the 89 percent mark, but that actually works out with how the team has hit the reset button. It's likely the Jaguars hand out some bigger contracts in free agency this offseason, which will help that number, and they could extend some players and/or sign more free agents in 2015 if they feel they're poised for a run.
Cap Hit vs. Cap Spend
We're all familiar with the term "cap hit" when talking about cutting and signing players, but what is the difference between a cap hit and cap spending?
As an example, the Jaguars recently re-signed defensive tackle Sen'Derrick Marks to a four-year, $18 million deal. As far as cap hits, this is what his deal looks like:
As you can see, part of what effects Mark's cap hit are his signing bonuses and roster bonuses paid out each season. So, what is the difference between a signing bonus and a roster bonus when talking about cap hits?
Signing bonuses are fully guaranteed, pro-rated through the duration of the contract. This means they are spread evenly through the life of the deal, so as you can see Marks' $800,000 signing bonus is paid in $200,000 chunks each season, evenly. Roster bonuses on the other hand are paid in the full amount for a specific year if a player is on the roster by a certain date.
Now, what about the cash spending part?
Now, while the Jaguars have Marks' signing bonus pro-rated over his four year deal, at least in regards to the cap, they physically paid him the $800,000 towards cash spending in the 2014 salary cap. So as you can see Marks' cap hit in 2014 and cash spend hit in 2014 are different.
So once again, if the Jaguars sign someone like free agent center Alex Mack to a big fat new contract, whatever signing bonus they give him will count against the 2014 cash spending and effect the cumulative requirement of 89 percent after the 2016 season.
For example, simply signing Alex Mack to a deal that has say a $16 million signing bonus will jump the Jaguars cash spending in 2014 up to 70 percent. Signing someone like Michael Johnson as well to say a $12 million signing bonus will push it to 75 percent, so on and so forth. This does not include rookie contracts into the equation, either.
Naturally against the cap those signing bonuses would be pro-rated over the course of their deals, but for cash spending purposes they would count in full on the season in which they signed.
How much is 89%?
The total figure for how much teams will need to spend to hit the 89 percent mark is unknown at this point, because we do not know the salary cap figure for the 2015 and 2016 seasons. The reported final figure for the 2013 season is $133 million while the figure for 2012 was $123 million.
For now, I will guess that the cap going forward will increase at least as much as it did this season, because the TV contract revenue is going to be enormous going forward.
This means from 2013 through 2016, the total salary cap will be (and this is pure speculation and probably dead wrong) $555.19 million, meaning that every NFL team will have had to have spent $494.41 million in cash over that for year period to hit the mark.
Where are the Jaguars, do they need to spend more money?
As it stands right now, the Jacksonville Jaguars spent only 69 percent cash towards the cap in 2013, which isn't a big surprise considering the only new contracts they handed out were minimal deals. So the short answer is yes.
Right now for the 2014 season, the Jaguars sit at roughly 63 percent cash against the cap, but that number will surely increase once free agency begins and the team signs one or two higher priced free agents, as some expect. Their projections for 2015 and 2016 currently are significantly lower as expected, but they will also have a lot of contracts coming and coming before then, so it should increase without issue.
What happens if you don't hit the 89% mark?
You have to relocate your franchise to London.
The penalty for not reaching the 89 percent spend requirement over the four year cumulative period really isn't that bad. A team will have to give the money they're short by to their own players (via NFLPA-determined distribution). This means there really isn't much of a penalty, other than your own players get somewhat of a bonus, for a lack of a better word. You do not incur fines, you do not lose draft picks. You just have to spend the required money in some manner.
This means that it doesn't really behoove a team to throw around massive deals and signing bonuses to get to the mark. It's still likely going to have teams handing out big signing bonuses rather than allowing the NFLPA to divvy up the unspent cash, but it's not really something fans should be stressing out over.
(h/t to Chris at Dawgs By Nature)