Jump to content
Washington Football Team Logo
Extremeskins

The Consequences of Big Money


DjTj

Recommended Posts

There is no question that the Redskins are spending more right now than any other team in the NFL. The media can't figure out where all the money is coming from, and even to fans like us, the spending spree is a little bit surprising given that we are supposed to be in an age of parity.

The salary cap era wasn't supposed to look like this, and the Redskins are pulling it off with clever cap management and a wealth of cash on hand. The formula is actually pretty simple: give long-term backloaded deals and restructure the contracts before they get too expensive; convert all bonuses to guaranteed money when possible and spread the cap hits into the future; cut players that don't fit with the financial program. This strategy is almost foolproof: as long as the CBA is extended, we can keep restructuring and moving money into the future - "cap hell" is always on the horizon, but the horizon always stays the same distance away.

Even if the NFL's labor talks do fall apart and the Redskins do go through cap hell, there is a pot of gold on the other side in an uncapped environment where we can sign all the free agents we want.

There seem to be no negative consequences to this strategy ... but are there?

For one thing, we are overpaying ... in actual reality we aren't, because every one of these contracts will be restructured, but in terms of the market, we are pushing the upper bound. Because we just signed a strong safety for $30 million, other safeties around the league will ask for that much - our own safety, Sean Taylor, will likely ask for much more in a few years. We just paid a third WR almost as much as we pay our Pro Bowl record-breaking receiver. There is no doubt that we are driving the market up.

Even though some of our players may ask for more money later on, the consequences of this are also good for the Redskins. As we drive the market up, we make it more expensive for other teams to sign players, and we force every owner in the NFL to open up their checkbooks. In the long-term, this will mean that the NFLPA will be able to ask for higher and higher salary caps, which benefits a profitable franchise like our own. The higher the salary cap, the more we will be able to use Dan Snyder's deep pockets to our advantage. As the richest team in the NFL, the Redskins want the price of free agents to be as high as possible, because it will drive up costs for everyone, drive up the salary cap, and turn the market to our advantage. By leveraging our cap situation, we are creating what is almost an uncapped environment.

From Dan Snyder's standpoint, and the perspective of the Redskins, there is no better strategy - we spend to get better players, but we also spend to drive the market up, pushing the salary cap and putting pressure on other teams. As the big dog in this market, there is no downside for us when prices escalate.

...however, as fans, is this in our best interest? To remain the richest team in the NFL, the Redskins have to raise ticket prices and parking fees, they need to search for more revenue in places like credit cards and obstructed view seats, and merchandising ... and this money comes from our pockets. Adam Archuleta's $10 million is money that comes from fans. The more money we pay our players, the more money fans will have to produce.

There are also benefits to this, like a free messageboard where we can get inside information on the Redskins, and as informed fans, we are getting our money's worth more than most. Casual fans too, get to watch a great team play on TV for free without having to pay into the system. However, die-hard fans that want to go to the games and buy merchandise will have to pay more as the Redskins pay more. When the Redskins drive up the market for other teams, they certainly also drive up the market for their fans.

Is it worth it? I guess that's something we can all decide for ourselves ...

At least for myself, even though I'm noticing these consequences, I'm still very much on the bandwagon, and I'll still try to go to games, and I'll still buy Redskins gear, and I will be going nuts when Andre Carter gets a sack, Adam Archuleta recovers the fumble, and on the ensuing possession we run an option-pass with Antwaan Randle El throwing to Brandon Lloyd in the end zone ...

:point2sky You've still got me Danny - hook, line, and sinker...

Link to comment
Share on other sites

ugh

ur makin us have to read all of that?

They dumbing you down a little out there in Cowpuke country? Just kidding. Excellent post Dj and I'm with you 100%. We really couldn't ask for a better, more dedicated owner. Good thing he and the FO aren't the inept, bumbling fools everyone in the media seems to think they are. Keep shocking em Danny.

Side note: I can't believe some of these idiots are so clueless they think Dan is cheating and paying money under the table. Don't they get it, Dan invested a little of that money in some quality cap guys, too. We don't have a bunch of monkeys running the accounting department, is that really that hard to understand?

Link to comment
Share on other sites

GREAT post man! GREAT post! This is the sort of thread that will hopefully generate alot of intelligent conversation. Why no one in the media realizes that we always keep hell on the horizon, but never get there is beyond me. Honestly, as a casual fan, its taken me a while to come to a similar conclusion, but I still came to it. Professional football analysts should have realized this a long time ago. Why other teams don't do this is also beyond me.

One other point I would like to mention to add to how this way of managing the cap is good for the skins, is that we will always have the potential to sign the best free agents. Yeah, we love Santana Moss now, but by the time he is due the "big money," we will be well suited to retain him (because the salary cap will be higher), restructure, or cut him if he's not performing, and resign a younger, more talented receiver. It's a win-win situation with no apparent downsize. The important thing to me is not that a player gets a large 30 million dollar contract, but how much of it is garaunteed money, and how long the contract is (meaning how long we can spread the garaunteed money out, should we cut the player).

Link to comment
Share on other sites

There is no question that the Redskins are spending more right now than any other team in the NFL. The media can't figure out where all the money is coming from, and even to fans like us, the spending spree is a little bit surprising given that we are supposed to be in an age of parity.

The salary cap era wasn't supposed to look like this, and the Redskins are pulling it off with clever cap management and a wealth of cash on hand. The formula is actually pretty simple: give long-term backloaded deals and restructure the contracts before they get too expensive; convert all bonuses to guaranteed money when possible and spread the cap hits into the future; cut players that don't fit with the financial program. This strategy is almost foolproof: as long as the CBA is extended, we can keep restructuring and moving money into the future - "cap hell" is always on the horizon, but the horizon always stays the same distance away.

:point2sky You've still got me Danny - hook, line, and sinker...

thats how regan won the cold war--out spend everyone else till they go belly up....or in the nfl case until they come whining for us to share more money so they can compete.....yah great job fellas...compete away!:violin::allhail::pimp:

Link to comment
Share on other sites

Great post TJ. Theyve still got me too.

The big dog SHOULD be able to push the others around, TO AN EXTENT. The teams run successfully SHOULD get some small advantage over the have-nots. Just like any other business entity in a capitalist system.

The only point I disagree with is Snyder hurting the die hards. If he really wanted to be greedy about it, we wouldnt have a waiting list, he would just raise ticket prices until only the richest 90,000 fans could afford them, instead of selling out every game with 90k PLUS having a waiting list of >100,000 that WOULD be willing to pay for them.

From a purely economic standpoint, he is keeping prices artificially LOW, if you can believe that.

Link to comment
Share on other sites

The only point I disagree with is Snyder hurting the die hards. If he really wanted to be greedy about it, we wouldnt have a waiting list, he would just raise ticket prices until only the richest 90,000 fans could afford them, instead of selling out every game with 90k PLUS having a waiting list of >100,000 that WOULD be willing to pay for them.

From a purely economic standpoint, he is keeping prices artificially LOW, if you can believe that.

I disagree - Snyder is a business man. Any business can say "I'll only sell to the very select few people that can afford the very best" but if you do - you'd better not depend on TV ratings, merchandise sales, and over all community support. Think people would rush to find room for a new Stadium if he priced out the vast majority of skins fans? Think they'd buy hats?

Not saying he's a bad guy - he's going out and getting the players our coaches want. Can't ask more from an owner then that. Just saying that he isn't keeping prices low out of kindness.

Link to comment
Share on other sites

:doh: You've got to be kidding? If that's your feeling, this isn't the place for you.

:laugh: I dunno, there seem to be plenty of one line thread starters here to keep some of these people happy.

Example thread.

I want to keep Lavar.

Me too.

Yeah, Lavar is awesome.

Uh Huh.

:laugh:

In all seriousness this is a great thread DjTj, it really got me thinking about what's really going on. You hear so much speculation about cap hell it just gets old. It's good to know our front office knows what they are doing.

Link to comment
Share on other sites

This is a GREAT post, and a further example of why I have started coming here for all of my Redskins news and am getting sick of blowhards like Peter King.

Seriously, this board is a perfect example of the "citizen media" effect that political bloggers have been touting for a couple years. Glenn Reynolds worte a book called Army of Davids to that effect.

And to my mind, that's what ExtremeSkins has become. An Army of Davids. Except the bid difference is that not only are we that army, but we got Goliath Snyder on our side too!

:cool:

Link to comment
Share on other sites

great post and great follow up discussions. The only way i can see this not working, is if we reach the promise land and go through another dry spell of losing seasons and people get over the "feeling of community" that gibbs has brought back. Or in other words when the bandwagon fans jump ship when thigns don;t go as well as we all hoped for.

I will always be there to support the team whether it's going to the games and paying parking, or watching it on TV and buying gear the the Redskins stores. They need TV ratings too, so don't think that saving money by watching the game on your TV is not helping! Hail to em.

And I doubt it will ever get to the point where this town, VA and lower MD stop loviung this team!

Link to comment
Share on other sites

Great Post! As far as Synder reeling us in...Maybe Synder has to raise parking tickets etc b/c he has to split that revenue w/ the teams that are too lazy to generate that revenue themselves. May be a stupid question, could that be part of it?

Link to comment
Share on other sites

I agree with the premise of your post. But, I think that in trying to drive up the costs of free agents and coaches, and turning the tide in the franchises advantage, the goal is for the team to win. I honestly believe that Dan Snyder is a fan of the Redskins, and wants the team to do well. That is his number one goal. Making money is obviously a strong second.

On the other hand, the law of supply and demand does apply. As fans, this isn't great for us, because as the costs increase it affects us directly. But, for an owner, I can understand not being concerned if a small number of fans are priced out of attending games, when there is a waiting list with tens of thousands waiting to take their place. Maybe it's not great for the fans in general, but, I believe, the goal is still to put a winning team on the field over getting a few more dollars out of our pockets.

Link to comment
Share on other sites

I agree with the premise of your post. But, I think that in trying to drive up the costs of free agents and coaches, and turning the tide in the franchises advantage, the goal is for the team to win. I honestly believe that Dan Snyder is a fan of the Redskins, and wants the team to do well. That is his number one goal. Making money is obviously a strong second.

On the other hand, the law of supply and demand does apply. As fans, this isn't great for us, because as the costs increase it affects us directly. But, for an owner, I can understand not being concerned if a small number of fans are priced out of attending games, when there is a waiting list with tens of thousands waiting to take their place. Maybe it's not great for the fans in general, but, I believe, the goal is still to put a winning team on the field over getting a few more dollars out of our pockets.

Yeah, the goal is definitely to put a winning team on the field, and everything the Redskins are doing really plays into that - the higher we drive the market, the more we become the prime destination for top free agents because other teams simply won't be able to afford what we're offering. It all feeds on itself to put the Redskins in the best position to get the best players.

As fans, we can look at this as paying for better players - if the cost is passed on to us, what we're doing is paying more to get a winning football team. At least this past year, the Redskins certainly delivered, so I'll happily keep paying.

Link to comment
Share on other sites

Any wonder why "cash over cap" was such a big deal during the CBA negotiations? From ESPN:

What does the term "cash over cap" mean?

To comprehend the concept of cash over cap, one has to understand that the salary cap is just a bookkeeping number, one that can be massaged by amortizing signing bonuses, among other mechanisms. The cap has never been indicative of a team's payroll. For example, the Redskin organization, believed to be the highest revenue-producing machine in the league, has had payrolls well over $100 million the last few seasons, even while the highest salary cap level ever was in 2005, at $85.5 million. The difference between a team's true payroll and its salary cap number is essentially what "cash over cap" means.

I remember a lot of fans complaining about the media using the Redskins as an example when explaining that concept. The last week shows why they were justified in doing that.

There is no question that the Redskins are spending more right now than any other team in the NFL.

The salary cap era wasn't supposed to look like this, and the Redskins are pulling it off with clever cap management and a wealth of cash on hand. The formula is actually pretty simple: give long-term backloaded deals and restructure the contracts before they get too expensive; convert all bonuses to guaranteed money when possible and spread the cap hits into the future; cut players that don't fit with the financial program. This strategy is almost foolproof: as long as the CBA is extended, we can keep restructuring and moving money into the future - "cap hell" is always on the horizon, but the horizon always stays the same distance away.

Link to comment
Share on other sites

Our economic system is based on a free market, open competition and profit motive. The Washington Redskins are a VERY profitable organization. So, in the name of John Galt, who cares how much Daniel Snyder pays for his free agents? That is of course unless you root for, say, Da Bears. :doh:

Link to comment
Share on other sites

I liked your post as well and while I agree with your conclusion and the crux of your arguments, I'm not sure I can agree with everything that you said. Where I stumble is not having numbers to look at that support some of the premises you've made. After reading your post I decided to see just how Portis' contract compared to the other top running backs that have been signed recently. Unfortunately, All I could find was general information about these contracts. What I'm getting at is how much are the Redskins overpaying for Portis, if three years down the road his base slaary is less than the top four Rbs in the league? Is Archuleta's base salaries truly higher than the top safties in the leauge? Assuming it has to be at some point, is that five years from now or just three? You can see how that would make a difference, like you wrote, perhaps the Skins aren't really overpaying. I know sometimes people get enamored with the signing bonuses and the supposedly guarenteed part, but the recent departure of Coles and Arrington have taught me not all guarentees are the same. Did we pay more for Coles than Philly did for TO? Which cap hit was bigger since both were prematurely cut?

Last point/question I would like to add is the contract of Deion sanders. I remember at the time thinking this won't be so bad, they're going to cut him in three years before the backloaded part kicks in. Instead....well, you all know the rest.

I'm guessing part of the reason players sign with Washington is that Snyder is willing to guarentee so much up front, when God knows many, many, things could make that adventageous for a player more so than a contract with better base salaries spread out over the legnth of the contract. But hell, how much this factor in I couldn't began to know. Which just reminds me that I don't sh*t from shinlola when it comes to the true working of these contracts.

So I'm back to your conclusion as I undersood it. That is, it's working for Snyder; the cap hasn't been the problem everyone outside of Washington whishes it would be, therefore, it's working for me.

Good food for thought.

:2cents:

Link to comment
Share on other sites

Archived

This topic is now archived and is closed to further replies.

  • Recently Browsing   0 members

    • No registered users viewing this page.
×
×
  • Create New...