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What is the NFL's 89 percent spend rule?

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The NFL has a minimum spending rule of 89 percent over a four year period in the new CBA, but there isn't really a need for fans to be overly concerned about it.

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With the Jacksonville Jaguars nearly having $60 million in salary cap space to play with and no players of their own to really spend on, the expectation is that the team will be major players in the free agent market. With that is also the misunderstanding of what the 89 percent cash spending requirement means.

In short, it's not really as big of a deal as some (the NFLPA through media) have made it out to be. The Jaguars are currently sitting below the threshold, but missing it isn't some huge punishment that is a death knell to a franchise, it's just more of a negative perception, fair or not.

What is the 89 percent rule?

There is a belief that NFL teams must spend 89 percent of the salary cap to be in compliance with the new collective bargaining agreement. That is both simultaneously correct and incorrect. The rule does not apply to a singular season for teams, but applies to an aggregate total over the course of four seasons. Specifically through the course of 2013, 2014, 2015 and 2016. This means the team must hit the mark by the time the league rolls into the 2017 year, so March of 2017.

The Jaguars spent $96.6 million in cash in 2013 and $113.8 million in cash in 2014, which is 78.5 percent and 85.5 percent, respectively. With the projected salary cap in 2015 being roughly $143 million, the Jaguars would need to spend at least $127.7 million in cash, which is roughly $30 million based on what I show in my records of their slated cash spending already on the books.

Clearly, the team will have to spend in both 2015 and 2016 to make up the difference, but the NFLPA is manipulating the data here for PR purposes, which is completely normal. The team doesn't have to hit that mark this season, nor should they try to.

What is the difference in a cap hit and cash spending?

Most fans are familiar with the term "cap hit" by now, with regards to signing and cutting players and it's effect on the salary cap. There is a difference in what a cap hit is on the salary cap and what cash spending on the salary cap is.

For example: The Jaguars re-signed Sen'Derrick Marks in 2013, giving him a four-year deal worth $18 million. Here is how his cap hits were structured with the team.

As you can see, Marks' cap hit is more or less static across the tenure of his deal. The signing bonus is amortized through the course of the deal. Everything paid out to Marks in a given season adds up to what his cap hit is on a given season, even though his signing bonus of $800,000 was paid out in full when he signed the deal, it's "hit" on the cap is spread evenly through the life of the contract.

So how is the cash spending different?

As mentioned, Marks' signing bonus was paid in full when the contract was signed, so that full $800,000 signing bonus counts as cash spending in 2014. This is how the Jaguars will likely spike their cash spending going forward while they have loads of cap room.

This means if the Jaguars sign someone like tight end Julius Thomas in free agency and give him say a... five-year, $50 million deal with a $20 million signing bonus, this means that his cap hit is probably somewhere in the low teens while his cash spending hit on the 2015 season is close to $30 million, because the signing bonus is paid out in 2015, while it's amortized through the five years of the deal in the form of $4 million on the cap each season. Now, I doubt that the signing bonus will be in the range of $20 million for someone like Thomas, as Jimmy Graham recently got a big time deal with a $12 million signing bonus, but that's an example of how a team can easily spike their cash spending.

Doing something like a big signing bonus doesn't necessarily eat up huge amounts of cap room, either, since it's divided among the years of the contract. For instance, Thomas' cap hit for 2015 could be only something like $14 million, while his cash spending count would be somewhere around $30 million.

How much is 89 percent?

The total amount teams will have to meet at this point is unknown because the official cap number for the 2015 season hasn't been released yet and we have no idea what the cap in 2016 will be. The cap in 2013 was $123 million while the cap in 2014 was $133 million. When I wrote about this last season, I speculated the 2015 cap would be roughly $143 million, which is what it's being reported it likely will be (nailed it). This is what I calculated last season, based on me speculating what the numbers will be.

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.

What happens if you don't hit the 89 percent mark?

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.

The real bad thing would be the public perception that would follow, as it appears like you're not trying to win because you're not spending money, but we all know it's not that black and white with most teams. Teams need to spend money, but that doesn't mean they need to pay mid-level free agents like top-level free agents, because then you wreck the market.

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.

Basically, don't worry about it. It's not that big of a deal.