SSFFL Player Acquisition and Retention Overhaul Proposal

Why Change The Player Acquisition and Retention Rules? Fallen out of line with the NFL Talent recognition is penalized Salary Cap is at the same time too restrictive and too easily manipulated Too punitive for injuries

No Longer Like NFL Salaries decline each year, rather than increase No signing bonuses Guaranteed contracts paid on termination, rather than on signing Choose how long draft picks are signed Restricted Free Agents are restricted one extra year Franchise rule does not match Bidding on Players is wide open, allowing sniping

Salaries Decline A 7-0 contract is really; –X1 = 7-0 –X2 = 6-0 –X3 = 5-0 –X4 = 4-0 –X5 = 3-0 –X6 = 2-0 –X7 = 1-0 – Total = 28 over 7 years No player would sign such a contract Creates a situation where the better players are earning less than mediocre players, which leads to hold outs

No Signing Bonuses The only guaranteed money in NFL is signing bonus (there are a few exceptions) Signing Bonus, more than any other factor, determines where a player will choose to play Most of the compensation for a player comes from the signing bonus Signing Bonus is evenly distributed over contract for salary cap purposes (up to 6 years)

Guaranteed Contract Payout on Termination In the NFL, a guaranteed contract is paid up front through a signing bonus In the SSFFL, a guaranteed contract is paid out only if the player is cut, or has years purchased back In the NFL, termination of a contract with guaranteed money means all the guaranteed money that hasn’t counted against the cap already will count now

Signing Draft Picks In the NFL, an owner can expect to pay within a draft slot for the player –The #1 pick will almost always get more money than the #2, who will get more than the #3, etc. First round draft picks get signing bonuses Second round picks get contracts Third through seventh round picks get the minimum if they make the team In the SSFFL, the owner decides what commitment he will make.

Restricted Free Agents In the NFL, a player is restricted for 3 years, not 4 During a player’s first 3 years, a team can choose to sign the player for the minimum in order to keep the player, or release him to free agency In the year of restricted free agency (after 3 years in the league), an NFL team gets compensation if they offer enough to the player prior to free agency

Franchise Rules In the NFL, a Franchised player is franchised for only one year, at the average of the top 5 salaries at his position this year –He can be exclusive, or non-exclusive In the NFL, a Transition player is a one year contract at the top 10 salaries from the end of last year In the SSFFL, the franchise contract is in essence a career contract, and there is no Transition contract

Sniping In the NFL, all negotiations are semi-open. The press announces the length of the contract and the dollar amount. What the salaries are each year and what the signing bonus are kept secret until the contract is signed. In the SSFFL, you can wait to snipe the player.

Talent Recognition is Penalized Minimum contract is 4x larger than NFL minimum in relation to the salary cap per person. No protection for player rights after first year Roster is slightly smaller than needed

Minimum Contract Too Big In the NFL, the Salary Cap is $109 million, while the minimum salary is $285,000, which is.25% of the cap, or 14.1% of the average per player In the SSFFL, the Salary Cap is 55 years, while the minimum salary is 1 year, which is 1.82% of the cap, or 54.5% of the average per player.

No Protection for Player Rights after First Year In the NFL, the team has the sole option as to whether they will retain a player for the first 3 years of his career In the SSFFL, because time = cap, a player with less than the average salary becomes a free agent after his first year Because the minimum salary is 4x larger in the SSFFL, many draft picks do not get signed for more than the minimum, or end up on the practice squad

Roster is Too Small NFL Roster = 42.1 players for positions we start. –That comes out to 32 players for us because of starting 13 players vs. 17 starters in the NFL. Provides opportunity and space to hold players for development

Salary Cap Too Easily Manipulated and Too Restrictive Buybacks of years now part of plan when bidding on players – Manipulated Cutting guaranteed contracts is no penalty to the cap – Manipulated For a full roster with full cap, the average contract per player is almost 2 years – Restrictive Is almost impossible to sign all draft picks -- Restrictive

Manipulated Teams now plan out when they will buy years back from players when they bid –This manipulates the salary cap because the team is getting around the standard decline. A 7-0 that has 5 years bought back in the second year goes from 28 over 7 to 14 over 3, but only will count as 10 over 3 for cap purposes. –In the example above, the cap would go 7,2,1 for 3 years. In the NFL, the cap hit would have been 7,11,10 for the three years. When you cut a player with a guaranteed contract, there is no cap hit. –In the example above, if instead of 5 years being bought back, the player was cut in the 2 nd year, the 21 years that were eliminated by cutting the player would all come against the cap. Instead, cap space is restored

Restrictive It is next to impossible to have a full 30 person roster because of the minimum salary. –5 out of 16 rosters have 25 or more players. Only 3 could get to a 30 person roster. 3 teams have 21 or less. Keeping all draft picks for more than two years is a rarity. –9 from 2006, including Tarvaris Jackson, Kellen Clemens, and Brandon Marshall, and 10 from 2005, including Frank Gore, Jason Campbell, Lofa Tatupu, Vernand Morency, and Marion Barber, are on different teams than drafted them.

Too Punitive for Injuries No Injured Reserve No Physically-Unable-To-Perform (PUP) List Because of the salary cap, almost impossible to sign replacement players without cutting injured player, which is illegal in the NFL

So What Do We Do?

Salary Cap And Contract Changes

Change the Cap! Make the cap 220 from 55 Create Minimum salaries –0-1 years of service1 –2-6 years of service2 –7+ years of service3 Make the 32 active player roster Mandatory Install a minimum salary cap of 165

Other Cap and Roster Changes Keep up to 50 players on your roster Training camp contracts eliminated, all players must have a contract Only top 32 contracts count towards cap during preseason

Change contract structure Make the contracts more flexible –Don’t allow declining contracts. –Allocate different amounts each year –Let players choose based on parameters Add Signing Bonuses

Change the Injury Rules Add Injured Reserve –Can place player on IR when he goes on IR in NFL –No longer takes up a roster spot –Cannot be cut, per NFL rules Can take injury settlement, which is paid in cash. Add Physically Unable to Perform (PUP) list –Player can be placed on PUP if on PUP list in NFL –Does not take up roster spot while on PUP –Player must be on PUP for first 6 weeks, then on active roster for 4 weeks. Can then be put on IR –Cannot be cut, per NFL rules Can reach injury settlement to cut player

How would the signing bonus work? The signing bonus is paid when you sign the player The signing bonus is cash to the league For the purposes of the cap, the signing bonus would count against the cap for the first 6 years of the contract

So how would the signing bonus affect the cap? Example SalarySigning Bonus Total Cap Signing Bonus20 Year Year Year Total152035

What happens if I cut the player? Whatever remains of the signing bonus hits the salary cap this year. So in the previous example, if you cut the player in year 2, the remaining would hit the cap in the current year. –EXCEPT if it’s after June 1 when you cut him, the leftover signing bonus after this year all goes against next year.

Contract Extensions Can extend a player’s contract –Greater of 110% of previous signed contract OR Average of Top 5 contracts at position at that time (based on points) –½ of points must be signing bonus –Can be no longer than 5 years Can extend contract every other year New signing bonus prorated over remaining contract Old signing bonus prorated as it was before

Practice Squad Changes 5 player practice squad Eligibility –3 years from time entering league AND –Less than 8 games on active roster Lose right to match, but can see the real contract being offered. Can move player to active roster without bidding, if the player has not been bid on by another team. Can make practice squad bids on player

Bidding and Free Agency Changes

How does Free Agency Work? Unrestricted Free Agents –After 4 accrued seasons Two classes of restricted free agents: –Less than 3 accrued seasons = your property alone –After 3 accrued seasons = restricted free agent

Unrestricted Free Agents Before June 1 –Completely Unrestricted –Old team can make a tender offer (not a bid) of one year at greater of service minimum or 110% last year From June 1 to July 22 –Completely unrestricted After July 22 –If player got tender offer, he takes it.

Restricted Free Agents Two classes of restricted free agents: –First three years in league, you can sign the player for any legal tender offer –After the third year, your rights are based on what your tender offer to the player is

The Tender Offer? Yes, you have to make a contract offer to the player before free agency starts to keep him or his rights –First 3 years, league minimum –In the 4 th year Offer 3 = keep right to match Offer greater of 3 or 110% of last year = right to match + 3 rd round (or later if player was drafted later) draft pick compensation Offer greater of 5 or 110% of last year = right to match + 2 nd round pick from team that signs him Offer greater of 7 or 110% of last year = right to match + 1 st round pick from team that signs him Offer greater of 8 or 110% of last year = right to match + 1 st round pick and 3 rd round pick from team that signs him –These 4 th year offers are minimums for the first year salary only. A tender offer can also include signing bonus and additional years.

What are the steps? 1.Make the tender offer before April 1 2.Player is won in free agency 3.You have 7 days to decide to keep him 4.If you keep him, he gets the contract he won in free agency 5.If you let him go, you get compensated based upon your tender offer

Are there salary cap implications? Yes If you make a tender offer to a player, that offer counts against your cap until he is either signed or you release your rights to him.

How Does the Bidding Work? 1.For all restricted free agents, you’d see the tender offer like this: “8 over 1” or “14 over 2” 2.You’d need to make a better bid for the player, based upon the points for the bid. 3.When a player hasn’t received a new bid (not including the tender offer) for 7 days (before June 1 st ) or 1 day (after July 1 st ), he “signs the offer sheet” 4.If he’s restricted, the team with the rights to him has 7 days to decide whether they will keep him or let him go.

How Do the Points Work that the Players Will Use? Point system –Signing Bonus * 1.25 –Year 1 contract * 1 –Year 2 contract * ½ –Year 3 contract * ¼ –Year 4 contract * 1/8 –Year 5 contract * 1/16 –Year 6 contract * 1/32 –Year 7 contract * 1/64 –Year 8 contract * 1/128 –Year 9 contract * 1/256 –Year 10 contract * 1/512

Example –J Smith is offered the following contracts Team ATeam B SalaryPointsSalaryPoints Signing Bonus Year Year Year Year 4162 Total

And the winner is… Team A would win, as the player would take the 35 over 3 instead of the 60 over 4 Why? –Guaranteed money. Players want as much guaranteed as possible. That’s why it’s worth 1.25 per salary dollar –The players don’t like unguaranteed contracts, because they can be cut before the contract is up and they get nothing.

Franchise Contracts Two types of Franchise Contracts –Exclusive You guarantee the greater of the average of the top 5 salaries at player’s position for the current year or 120% of last year’s salary You pay the contract in cash. –Non-Exclusive You make a tender offer of the greater of the average of the top 5 salaries at player’s position for last year or 120% of last year’s salary If you do not match on the player, you get two first round draft picks from the team that gets the player

Transition Contracts Offer average of Top 10 salaries at player’s position from last year Get right to match Contract is guaranteed, meaning cash is paid to the league for the contract

Use of Franchise or Transition Tag Can use each tag once per player Can use both tags each year After using tag, you cannot bid on player

Miscellaneous Prior to trading deadline, if a player clears waivers he is released After week 11, players can only be picked up to replace players put on IR

Draft Pick Changes

New Draft Pick Rules A player drafted in the first two rounds gets an automatic contract, as prescribed by the league, or can be cut A player drafted in the third through sixth round is up to you to sign for the league minimum if you so choose.

Draft Contracts RoundPickSignYr 1Yr 2Yr 3Yr 4Option All9112XX

New Draft Pick Rules The player will count against your cap at the minimum rookie contract (1) until you sign him, cut him, or trade him The remaining signing bonus (what hasn’t counted against the cap) is paid if you cut or trade the player, not when you sign him. The signing bonus for 1 st round picks is prorated over 6 years because of the option

Option for 1 st round picks Each 1 st round pick contract has an option attached to it. The option is to keep the player for an additional two years, for the price attached The option expires at kickoff of week 1 of the third season of the contract, and can be exercised any time before.

Exercising Option What happens when you exercise the option? –Pay the money for the option to the league –Contract is extended two years, to 6 years –Remaining salary to be paid is spread out over the last 2 years, unless it would mean less than the minimum salary is paid –Option price is spread out over the remainder of the contract for cap purposes

Example of Option Exercise Example –#1 Draft Pick, option exercised before start of year 2 Before OptionAfter Option SalaryCapSalaryPoints Signing Bonus60 Year Year 2 (60 option paid) Year Year Year 5XX628 Year 6XX628

Exercising Option Results –Cap hit goes up because of paying option –You get to keep player an extra 2 years

Not Exercising Option What happens when the option expires? –Remaining signing bonus is prorated against the remaining 2 years. –Player becomes unrestricted free agent at end of contract

Conversion

Current contracts >5 years –Shortened to 5 years unless requested otherwise <= 5 years –Keep current length

Conversion Contracts ContractSignYr 1Yr 2Yr 3Yr 4Yr 5Cap

Conversion Contracts ContractSignYr 1Yr 2Yr 3Yr 4Yr 5Cap X X X X X XX XX XX XX (unless below min) 2XXX8 (est) XXX XXX8 1-04MinXXXX6 (est) 0-10MinXXXX

Drafted Players If you have a player you drafted, and he’d still be eligible for his draft contract –Drafted in if drafted in the first round –Drafted in if drafted after the first round You choose whether to convert his contract or to take on what would have been his draft contract

Example Craig Davis was the 9 th pick of the first round in 2007 –Contract in 2008 will be 0-1 = minimum contract –Draft contract would have been 52 over 4 with 32 signing bonus, prorated to 39 over 3 with 24 signing bonus and option to extend contract for 2 years for $32 Owner of Craig Davis would have to choose which contract

Restricted Free Agency For players not eligible for draft contract conversion –“Grandfathered” 4 th year of restricted free agency For players eligible for draft contract conversion –Player becomes unrestricted after 4 th season (instead of 5 th like with us)

Conversion Tasks Between New Year’s Day and Conversion Date –Cut players according to old rules –Buyback guaranteed contracts at old rate ($10/year) –Unlimited buybacks –Make tender offers to free agents –Determine if you’ll use franchise tag –Determine if you’ll use transition tag

Questions? Call Boskey: h) w)