Oakland Raiders - The Vertical Game - Important Changes Made by the 2006 Collective Bargaining Agreement Extension

2006 CBA Extension Changes horizontal rule

The March, 2006, extension of the Collective Bargaining Agreement ("CBA") which was approved by the owners on a 30-2 vote made many changes in the NFL landscape. Some of these are still—as of late July—only now becoming clear as individual points are hammered out in behind-the-scenes negotiations. For example, the increase in the amount of daily fines which can be levied for training camp holdouts from $5,000 to $14,000 does not appear in the Terms Sheet which was a part of the March agreement, and has only been reported (beginning with the "Rumor Mill" column at ProFootballTalk.com) over the very few last days.

This page summarizes the important changes affecting players which have been reported—i.e., salaries, contract stuff, transition tags, etc., all of which were modified. With the exception of the salary cap, we will leave the management side of things—i.e., the revenue-sharing issues and formula for team contributions—to sites such as ESPN.com.

(Note: If you're an MBA, CPA, tax attorney, etc., or simply feeling particularly possessed of a "steel trap mind," you can download [in PDF format] and slog through the actual 2006 CBA Extension Term Sheet from the NFLPA's web site. Be aware that, as of January 2007, parts of said extension have still to be memorialized (put into written form) as the two sides continue negotiating the fine points.)

Minimum player salaries for 2006 rose $40,000 across the board from what was scheduled for 2006, and are reflected in the table on the main salary cap page. At the same time, the cost to teams of signing vested veterans (four or more seasons) to minimum salary one-year contracts—this provision is called "Cap Relief for Veterans"—was lowered, from $460,000 per veteran to $425,000, and the allowable signing bonus for such contracts was increased from $25,000 to $40,000.

Rookie draft choices have in past years faced pressure from clubs to sign long-term (read five- and six-year) contracts, in effect giving up what would be as much as two years of unrestricted free agency. The new CBA provides that first-round picks No. 1 through 16 can be signed for a maximum of six years, but top-round choices below that (picks 17 through 32) cannot sign deals for a term longer than five years. And players taken in rounds two through seven can't be given a contract longer than four years. This latter provision is designed, obviously, to prevent second-day picks from being pressured into signing five-year deals. Put another way, a player who's going to earn second-day money shouldn't have to accept first-day servitude. (What is "first-day servitude"? Ask Marques Tuiasosopo.)

The CBA can be voided after four years by the union or the owners if it isn't working well, but that isn't likely to happen. The NFL owners paid a high price for labor peace for the next six years, and it would be sheer folly to give it up lightly.

There is a minor change for rookies—what I call the Nathan Vasher Rule. (Vasher had a phenomenal sophomore season and was talking to reporters about an increase.) A rookie contract cannot be renegotiated in the first two years. Any renegotiation of a rookie contract has to be done in the third year or beyond.

The 2007 salary cap has been pre-negotiated to be $109 million, as reflected on the salary cap page.

Last year there was a maximum proration term on NFL contracts of five years. For 2006, without an extension, it would have shrunk to four years, making agents' jobs more difficult. Now it is back at five years, allowing rookies selected at the top of the draft to continue to make big money. ESPN.com's John Clayton wrote in March, "Signing bonuses or guarantees have increased as much as $24 million for a top pick, particularly for quarterbacks. With four-year proration, the biggest signing bonus a top draft pick such as Reggie Bush would have received would be about $15 million. Now, he or Matt Leinart can go for the $20-plus million gold with five-year proration in 2006." The proration term increases to six years in 2007.

Before the start of the league year, a team can designate two players otherwise destined for June 1 releases to spread out remaining signing bonus acceleration into the next year. To do this, teams must carry those players' cap numbers until June 1, but release them before March so they can shop themselves in free agency. After June 1, the team gets to remove the salary and take the remaining cap hit in the following year. Example: if a player has $4 million of remaining signing bonus and four years left on his contract, he can be released before March and become a free agent. After June 1, the team would have only the $1 million of proration on its cap for that year and can apply the remaining $3 million to the following year's cap.

Daily fines for training camp holdouts have increased from $5,000 to a maximum $14,000. Note that "holdouts" only include players under contract who are no-shows; the term does not include unsigned rookie draft picks like Reggie Bush.

Finally, the extension made several significant changes in the franchise and/or transition tag. First, if a player signs the transition tag, his one-year contract is guaranteed. In the previous agreement, that wasn't the case—in contrast to the franchise designation, transition tenders weren't guaranteed.

Second, teams will have an entire offseason to sign a franchise or transition player without losing the ability to tag future players. The old rules gave a team that tagged a player until March 17 to reach a long-term deal without losing the ability to give a franchise or transition designation for the length of that long-term deal. (This was the origin of the mysterious de facto "rule" that negotiations with tagged players, if not concluded by March 17, had to cease entirely until July 15.) Under the new rules, the Seahawks, for example, had the ability to negotiate a long-term deal with transition guard Steve Hutchinson until July 15. (Never mind that they didn't—the point is they could have.) If he had signed a long-term deal before then, the Seahawks could have gotten the tag for the next year. After July 15, the team can keep the franchise or transition tag only if the player signs a one-year deal.

In other words, teams no longer have to break off negotiations with tagged players during the March 17-July 15 period to avoid losing the tag for the length of whatever contract ultimately gets signed.

Sources: ESPN.com, ProFootballTalk.com ("Rumor Mill"), NFLPA web site (www.nflpa.org)