NFL Spending Spree

I think in a few years, Redskins and Ravens fans will be grateful that they did not have a lot of salary cap space this offseason. With the NFL making an upward adjustment to the salary cap, causing it to rise about $20M in one year, some teams like the Niners and Dolphins are suddenly in a position to really spend to fix their immediate needs.

Of course, by escalating the going rate of all players, the players who are in a position to cash in this year are effectively shortening their own careers. The beauty of the salary cap, as it normally functions, is that salaries rise at an articially flatter rate than they would under open market conditions. Consider, if a constraint was not in place, how much a team like the Redskins would overpay big-name players just to keep them off the market. With the cap in place, and with mechanisms such as the franchise tag and transition tag, the salaries do not rise as quickly. When salaries rapidly spike, as they have this offseason, the price of the franchise tag (average of top-five salaries for that position) also rapidly increases. Players are effectively running the risk of pricing themselves out of the league prematurely, or having to take a humiliating pay cut. That being said, it's hard to fault a Nate Clements for cashing in when he's an ACL tear away from being unemployable in his chosen profession.

Worse yet is the guaranteed money in almost all of the recently-signed contracts. If a Patrick Kerney or Leonard Davis gets injured, or just doesn't play up to expectations, the team faces salary cap hell for the duration of the contract. By missing out on this spending spree, the Ravens and Redskins most likely will avoid the salary cap landmines that the free spenders are sure to face.

And steel yourself now for the year of the hold out. Because the NFL effectively uses a pegging system to determine rookie salaries, if one team near the top of the round overpays its rookie because a) they can; and b) they want them in camp with all their new free agents, there will be a pile-up towards the back of the round. Thriftier teams, which not coincidentally don't have high draft picks, will not pay inflated prices for a low first round pick just because a chronic screw-up team at the top of the list overpaid. The better-run teams will certainly face holdout rookies this offseason.