It’s official. There will be no salary cap in the NFL next season.
At first glance, it would appear that richer, more successful teams will start spending more money on the players they want to keep, and the league’s average salaries and team payrolls will undoubtedly rise. This was viewed as a worst-case scenario a few years ago when it was thrown into the Collective Bargaining Agreement as a way to put pressure on the NFL to get a new deal done before the 2010-11 season. But this new rule is far from a worst-case scenario. The Byzantine salary structure of the league is about to get a whole lot simpler.
Here’s why the capless year may be a stroke of genius: the NFL – and all of its teams – are rich enough that this is a good idea. The league is pulling in more money than ever, and their revenue-sharing policies are stricter and more inclusive than any other professional sports league. Teams share television deals, and everyone gets an enormous payout from the league office for merchandise, TV rights, and more. There are 1,800 players in the NFL, each making an average of $1.4 million, and teams are still worth an average of $1 billion dollars. That’s insane money.
This is a testament to the NFL’s financial strength: everyone can afford to pay everyone else whatever they want. Also, unlike other leagues, the bad teams are still rich enough to make serious moves. Take the Detroit Lions, for example: they’ve gone 1-31 over the last two seasons, but have made some tremendous acquisitions this offseason. They’ll likely compete for the playoffs.
Predictably, though, there is a darker side to all this money. There is little financial security for most players – as many large contracts are non-guaranteed – and no matter how much money a team has, good players don’t want to play for bad teams.
The NBA, on the other hand, doesn’t have the luxury of large, short-term contracts, and their product is tanking quickly as a result. The NBA will lose almost half a billion dollars this year. How can the owners possibly keep paying both their stars and a luxury tax when each team loses tens of millions of dollars a year? In contrast to the NFL, where bad teams frequently sell out, good clubs in the NBA struggle to reach three-quarter capacity. The Atlanta Hawks are an exciting team on the rise, yet they play every home game with a quarter of their arena empty. One of their best players, Josh Smith, is even from Atlanta, and still nobody shows up.
The NBA has four teams that average a sellout every game. The NFL has eight. Only six teams in the NFL sell less than 90 per cent of tickets every game. The NBA has 15. Just to compare, the NHL has 12 teams that average sellouts and 10 that don’t hit 90 per cent – cities are polarized. We’re about to see the NFL reap the benefits of putting out a great product out week after week. Here’s the lesson: when it’s about the game, people show up. When it’s about the stars, they don’t.