I've come to realize that in this CBA negotiation, there is a large contingent of fans that seem to lean towards thinking that it is the owners' own fault that the players get 60% of revenue minus the $1 billion off the top. Many believe that if the big spending owners like Al Davis and Dan Snyder wouldn't sign these enormous contracts for certain players, that the owners would not have to be asking for money back. I thought I would just write a quick little post to set the record straight on this, and also examine what that means for the Chiefs.
The current (and extended) CBA, agreed upon in 1993, stipulates that each team adheres not only to a salary cap, but also a salary floor. The salary cap was introduced in 1994 and was app. $35 million per team. The salary floor introduced at the same time, adjusted yearly, like the cap, based on prior year's total revenue. This is where the player's 60% of revenue comes in, as this dictates how much of that revenue will go into the salary cap and floor expectations. If the total spent on players drops below 59.5% of total revenue, then team that did not meet the requirement of the salary floor would have to pay the players of that team the difference directly before April 15th of the following season. The introduction of the cap/floor also stipulated a formula that increased the salary floor by 1.2% every year until 2009. The salary floor was 87.6% of the cap in 2009, and would increase to 90% in 2011, which is was the planned final year of the current CBA if the owners did not opt out. In 2009, the salary cap was $128 million per team (x 32 teams = $4.09 billion to players) with the salary floor being app. $112 million per team (x 32 teams = 3.58 billion to players). The players actually have protection against losing money as well, as an added clause into this was that the actual dollar amount of the salary cap CANNOT be less than any previous year's salary cap actual dollar amount. So even if the total revenues are down for the league, the players do not lose out on that established salary cap number.
So with that in mind, each team/owner is required by the CBA in a regularly capped season to spend a very high percentage of that salary cap towards player salaries. Therefore, it makes no sense to say that the high-spending owners that throw enormous contracts at one player (Albert Haynesworth, Peyton Manning's potential contract, etc.) are the ones driving up the costs of players and inflating the market. Sure, one ridiculous contract can inflate the market for a specific position and how much that position can get in contract (i.e. Nnamdi Asomugha), but the total money remains a requirement of each owner to spend on players. The owners may have "made their bed" in agreeing to this CBA back in 1993 that gave the players 60%, but that most definitely has nothing to do with the massively large contracts that some of these players are receiving.
Looking back at the uncapped 2010 season, our Chiefs spent app. $83 million on player salaries, which was the lowest spent of any team by about $7 million. Looking at this figure, the Chiefs were $29 million below the hard salary floor. Let's just say for all-intensive purposes of this post (and not having to worry about revenue increases), that the CBA is negotiated and at least the 2011 season again implements an app. 87% of the salary cap for the salary floor, and the salary cap once again is app. $128 million. The in-coming crop of rookies that the Chiefs draft will take up app. $4-6 million. So where does Clark/Scott spend another $25 million??? Big time free agents? Signing big, overpriced extensions for some current Chiefs? Signing a whole mess of smaller priced free agents to replace some of our roster fodder?
I'll leave you with that thought, as well as this little bit of knowledge to take with you. The owners have no control over how much of the revenue the players command at this point, and that is only one reason why they felt the need to renegotiate. One player's ridiculous salary doesn't change anything for the owners. One can only ask being on Arrowhead Pride, is that one player and his ridiculous salary coming to KC soon, b/c Clark has to spend the money anyway.