Specifics of the Cap
The salary cap is determined as a percentage of defined gross revenues (DGR),
which is outlined in the CBA as the aggregate revenues from all sources relating to the
performance of NFL games. This includes gate receipts and most significantly,
television revenues. Excluded from calculation of DGR are revenues from concessions,
parking, local advertising and promotion, programs, and those revenues from NFL
Films and NFL Properties, the licensing branch of the NFL. The percentage of DGR
that comprises the salary cap varies slightly over the term of the CBA. In its inception
in 1994, the amount was 64%.
The actual team salary cap is determined on a pro rata basis by dividing the dollar
amount arrived at as a percentage of DGR by the number of teams, less a portion of that
figure (about $5 million) that is allocated annually to collective benefits, such as the
player pension fund. The remaining portion represents the amount each team has
available to spend on player salaries for that contract year. Every one of the thirty-two
NFL teams has exactly the same amount as the limit they may spend, or more correctly,
allocate collective player compensation. Each team also has the same number of active
players. Thus, a situation exists whereby the number of critical human resources and
the total amount of compensation are the same for all firms in the industry.
At the intuitive level, the salary cap seems to be a straightforward addition
problem: do not spend more than x dollars in a given year on player salaries. Teams
have found that implementation according to the rules agreed upon in the CBA is a
much more complex issue. Since its realization in 1994, successful teams have had the
same salary cap figure each year as losing teams have had. They appear to have been
much more willing to incur significant risk, both from an economic and absolute
standpoint, to do what they believe was necessary to sustain an advantage and win,
either immediately or consistently. They chose to allocate salary cap dollars to future
contract years. Although the cumulative dollars contained in players’ contracts cannot
exceed the cap number (without substantial financial penalty), the calculation of
dollars spent for any given year may not reflect the actual dollars paid to a team’s
players. Even though the salary cap creates a hypothetical ceiling on the amount of
money that teams can spend in a given year, the ceiling is frequently exceeded from a
cash flow standpoint, depending upon a team’s orientation toward risk.
Allocation is the key. The primary method by which teams routinely push cap
dollars into future contract years is through the signing bonus. Signing bonuses,regardless of when they are paid to a player, are prorated over the life of the contract.
Thus, only that portion prorated to any given contract year counts against the total
team salary cap, rather than the entire amount paid to the player at the time of signing.
For example, if a player signs a five-year contract for $500,000 per year and receives a
$5 million signing bonus, only $1,500,000 in salary counts against the cap each year,
despite the fact that the player actually received $5,500,000 in his first year, and
$500,000 each year thereafter.
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Specifics of the CapThe salary cap is determined as a percentage of defined gross revenues (DGR),which is outlined in the CBA as the aggregate revenues from all sources relating to theperformance of NFL games. This includes gate receipts and most significantly,television revenues. Excluded from calculation of DGR are revenues from concessions,parking, local advertising and promotion, programs, and those revenues from NFLFilms and NFL Properties, the licensing branch of the NFL. The percentage of DGRthat comprises the salary cap varies slightly over the term of the CBA. In its inceptionin 1994, the amount was 64%.The actual team salary cap is determined on a pro rata basis by dividing the dollaramount arrived at as a percentage of DGR by the number of teams, less a portion of thatfigure (about $5 million) that is allocated annually to collective benefits, such as theplayer pension fund. The remaining portion represents the amount each team hasavailable to spend on player salaries for that contract year. Every one of the thirty-twoNFL teams has exactly the same amount as the limit they may spend, or more correctly,allocate collective player compensation. Each team also has the same number of activeplayers. Thus, a situation exists whereby the number of critical human resources andthe total amount of compensation are the same for all firms in the industry.At the intuitive level, the salary cap seems to be a straightforward additionproblem: do not spend more than x dollars in a given year on player salaries. Teamshave found that implementation according to the rules agreed upon in the CBA is amuch more complex issue. Since its realization in 1994, successful teams have had thesame salary cap figure each year as losing teams have had. They appear to have beenmuch more willing to incur significant risk, both from an economic and absolutestandpoint, to do what they believe was necessary to sustain an advantage and win,either immediately or consistently. They chose to allocate salary cap dollars to futurecontract years. Although the cumulative dollars contained in players’ contracts cannotexceed the cap number (without substantial financial penalty), the calculation ofdollars spent for any given year may not reflect the actual dollars paid to a team’splayers. Even though the salary cap creates a hypothetical ceiling on the amount ofmoney that teams can spend in a given year, the ceiling is frequently exceeded from acash flow standpoint, depending upon a team’s orientation toward risk.Allocation is the key. The primary method by which teams routinely push capdollars into future contract years is through the signing bonus. Signing bonuses,regardless of when they are paid to a player, are prorated over the life of the contract.Thus, only that portion prorated to any given contract year counts against the totalTim gaji topi, daripada seluruh jumlah yang dibayarkan kepada pemain pada saat penandatanganan.Sebagai contoh, jika seorang pemain menandatangani kontrak lima tahun untuk $500.000 per tahun dan menerima$5 juta penandatanganan bonus, hanya $1.500.000 gaji penting terhadap tutup setiap tahun,Terlepas dari kenyataan bahwa pemain benar-benar menerima $5.500.000-masing-masing di tahun pertamanya, dan$500.000 setiap tahun sesudahnya.
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Spesifik dari Cap
topi gaji ditentukan sebagai persentase dari pendapatan kotor didefinisikan (DGR),
yang diuraikan dalam CBA sebagai pendapatan agregat dari semua sumber yang berkaitan dengan
kinerja NFL game. Ini termasuk penerimaan gerbang dan paling signifikan,
pendapatan televisi. Dikecualikan dari perhitungan DGR adalah pendapatan dari konsesi,
parkir, iklan lokal dan promosi, program, dan mereka pendapatan dari NFL
Films dan NFL Properties, cabang lisensi dari NFL. Persentase DGR
yang terdiri dari topi gaji bervariasi sedikit selama jangka PKB. Dalam awal
tahun 1994, jumlah itu 64%.
The gaji topi tim yang sebenarnya ditentukan secara pro rata dengan membagi dolar
jumlah tiba di sebagai persentase dari DGR dengan jumlah tim, kurang sebagian dari yang
angka (sekitar $ 5 juta) yang dialokasikan setiap tahun untuk manfaat kolektif, seperti
dana pensiun pemain. Bagian yang tersisa mewakili jumlah masing-masing tim memiliki
tersedia untuk dibelanjakan pada gaji pemain untuk tahun kontrak. Setiap salah satu dari tiga puluh dua
tim NFL memiliki persis jumlah yang sama seperti batas mereka dapat menghabiskan, atau lebih tepatnya,
mengalokasikan pemain kompensasi kolektif. Setiap tim juga memiliki jumlah yang sama aktif
pemain. Dengan demikian, situasi ada dimana jumlah sumber daya kritis manusia dan
jumlah total kompensasi adalah sama untuk semua perusahaan dalam industri.
Pada tingkat intuitif, topi gaji tampaknya menjadi tambahan langsung
masalah: tidak menghabiskan lebih dari x dolar pada tahun tertentu pada gaji pemain. Tim
telah menemukan bahwa pelaksanaan sesuai aturan yang disepakati dalam CBA adalah
masalah yang jauh lebih kompleks. Sejak realisasinya pada tahun 1994, tim sukses telah memiliki
sama angka topi gaji setiap tahun sebagai kehilangan tim telah memiliki. Mereka tampaknya telah
jauh lebih bersedia untuk menanggung risiko yang signifikan, baik dari ekonomi dan mutlak
sudut pandang, untuk melakukan apa yang mereka percaya adalah diperlukan untuk mempertahankan keuntungan dan menang,
baik segera atau konsisten. Mereka memilih untuk mengalokasikan dolar gaji topi untuk masa
kontrak tahun. Meskipun dolar kumulatif yang terdapat dalam kontrak pemain tidak bisa
melebihi jumlah cap (tanpa hukuman finansial yang besar), perhitungan
dolar yang dihabiskan untuk setiap tahun tertentu mungkin tidak mencerminkan dolar yang sebenarnya dibayarkan kepada tim
pemain. Meskipun gaji topi menciptakan langit-langit hipotetis pada jumlah
uang yang tim bisa menghabiskan pada tahun tertentu, langit-langit sering melebihi dari
sudut pandang arus kas, tergantung pada orientasi tim terhadap risiko.
Alokasi adalah kuncinya. Metode utama yang digunakan tim secara rutin mendorong topi
dolar dalam kontrak tahun depan adalah melalui bonus penandatanganan. Penandatanganan bonus, terlepas dari ketika mereka dibayar untuk pemain, yang prorata selama masa kontrak.
Jadi, hanya bagian prorata untuk setiap tahun jumlah diberikan kontrak terhadap total
gaji topi tim, daripada seluruh jumlah yang dibayarkan kepada pemain pada saat penandatanganan.
Sebagai contoh, jika seorang pemain menandatangani kontrak lima tahun sebesar $ 500.000 per tahun dan menerima
$ 5.000.000 penandatanganan bonus, hanya $ 1.500.000 pada jumlah gaji terhadap topi setiap tahun,
meskipun fakta bahwa pemain benar-benar menerima $ 5.500.000 di tahun pertama, dan
$ 500.000 setiap tahun sesudahnya.
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