CFL Cap something to follow

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Most every Canadian Football League preseason opens with a power sweep of change. New head coaches. Old coaches in new places. New playing rules. Old playing rules made new. Sometimes a new commissioner.

But for sheer impact, nothing this past winter has rocked the CFL as hard as the new salary management system.

Long before this weekend's opening of training camps, budgets were blitzed, depth charts were sacked and personnel changes were the order of the day.

The Saskatchewan Roughriders cut loose a handful of prominent veterans (Andrew Greene, Nate Davis, Jackie Mitchell) and reworked the salary of their starting quarterback, Kerry Joseph. The Montreal Alouettes dumped four players in one day, then traded receiver Thyron Anderson for a draft pick. The Toronto Argonauts tried to get ahead of the $4.05-million salary cap by front-loading and extending the contracts of five players last November and three more in mid-January.

The Winnipeg Blue Bombers did the same with defensive lineman Doug Brown and receiver Milt Stegall.

"No question, the salary management system is having a significant impact on teams making decisions," said Calgary Stampeders managing partner and president Ted Hellard, an architect of the system and its cap. "The releasing of players who don't fit in the cap model is one thing, but the players after being released are not immediately being picked up at that salary. That tells you the system is working."

Even when the Grey Cup champion B.C. Lions re-signed outstanding offensive lineman Rob Murphy, it wound up costing them Bobby Singh, who refused to accept less money to stay in Vancouver. As general manager and head coach Wally Buono explained, "The reality of this business is not always pleasant, but in order to remain competitive at all positions, and operate within the parameters of the CFL's salary management system, difficult decisions are necessary."

CFL clubs had the 2006 season to comply with the salary management system without being punished through a series of escalating fines. (A club that goes over the cap by $100,000 will be fined $1 for every $1 over the limit. A club $300,000 over will pay $3 for every $1.) This year, the penalties are in place and clubs are required to provide full disclosure when it comes to player salaries, bonuses and side deals.

As Argos GM Adam Rita noted this week: "Everything goes to the cap, except [players put on the nine-week injured list]. … You really have to make some hard decisions. There's someone in your pocket checking it all the time."

This business of checking has some CFL followers rolling their eyes and saying, "Yeah, and the Las Vegas Posse are about to make a comeback." Can a league that has forever paid lip service to keeping its spending in line suddenly become financially correct?

To the CFL's credit, Trevor Hardy, a forensic accountant, was hired as the director of salary expenditure reporting. He and the director of finance and administration, Doug Allison, spent time with the National Football League going over its salary cap methods.

Although the CFL will not identify which clubs have been fined for failing to stick to the cap, there are officials who insist abiding by the new rules is in everyone's best interest.

"For the CFL to be a strong league, it needs cost certainty," Hellard said. "It's important that fans understand it's a revenue-sharing based cap. It allows us as players and owners to focus on revenues. As the revenues increase, it allows the cap to move up and the players to receive more money."

Unfortunately, the players most affected by the salary management system have been the aging veterans who typically make the most money. Edmonton Eskimos linebacker Singor Mobley chose retirement at the age of 34 instead of agreeing to a sizable pay cut. Along with Greene, the 'Riders dropped Charles Thomas from their offensive line because of salary concerns.

What will be interesting to watch once the regular season begins June 28 is how clubs will react when hobbled by injuries. Will they go for the cheapest fix? Will that lead to a competitive imbalance? Will we ever know whether or how much a team is hit in the wallet for going over the limit?

Like most every CFL season, there are questions, there are answers and there are mysteries that defy logic. The salary management system has given us more of all three, and the assurance of more player moves to come.

The answer appears to be and now certainly the league can raise the cap to a more respectable $5M.

how is a $5M cap more respectable than a $4.05M cap?

seems CFL-non believers will still say 'ONLY $5M?...sundin makes more than the whole argo team'....or something dumb like that.

i'd like it to stay where it is for now, to entice more investors to look at buying into the league.

Well the cap is suppose to increase when overall league dollars also go up. That's in the new players association arrangement.
The more money legally available means those funny games under the table may no longer take place.
And there is no doubt how teams are playing some players under the table with cash, cars and condos.

i doubt it will go up to $5M this fast...

with teams set to make around $1M more from the TSN tv deal in '08, i dont think the whole extra $mill will go right to player saleries.

the Cap might go to $4.5M tho.

this Cap system seems like it would aid expansion teams in becoming competitive alot faster ( when the league does expand )...so many talented players are being cut from the 8 current teams, that an expansion team would beable to pick up some really good players without having to sacrifice draft picks in trades.

Anything is better then the current number, when you consider there is a 46 man roster plus injuries, wow that makes for an average salary based only on the 46 at $88,000.
I believe the cap also looks after the taxi squad at 4 players and any injury which is not a nine week exclusion.
Bottom line there should be more money for the poor players who have suffered over the years big time.
At least so the potential average salary is $100,000.

if the cap goes up, you'll probably see it spent on the top players rather than the bottom guys.

if a superstar player is asking for $100,000 more than a team currently can afford, suddenly they can afford a guy like bobby singh, troy davis or ryan thelwell.

I think it depends a lot on how much the CFL makes in the next couple years. The cap will probably go up, but I really dont know how much, maybe 4.7?

They can't raise it too much, too fast, or it will look like they set it artifically low to begin with. With the Riders reporting $15.3M in revenues last year, only $4.05M goes to players salaries is only 26% (although the Riders spend closer to $6M last year on salaries). This is far lower percentage than other pro leagues, but perhaps the CFL must first cover their costs before they start throwing the money around. But this does still leave over $11M for the Riders to spend on "other" things.

I would say the league could raise the SMS to $4.65M next year, then $5.15M the next year, then hopefully stabilize it.

The worst thing the league could do is release the players salaries to the press. This will lead to massive salary inflation like we've seen in other pro leagues when players and agents find out what other players are really being paid.

How are players hurting argotom?

Median Canadian Salary/wage is what? 30-33K?

CFL league min is 40K

It's not like there are players in the poor house.

The Cap should remain at 4.05M for 3 years, don't forget the league raised it by 250K from the 2006 number.

Until after the 2009 Season the Cap should remain at 4.05M, 88K average is fine.
that is a good amount of time to stabalize the league and see exactly how much the cap could be raised while allowing teams to earn small profits.

Now this won't happen next year the cap will rise slightly, which it shouldn't.
Especially if Ottawa might come back in 2009.

Anyone who thinks players are in the poor house is insane.
No player on the Lions last year earned less then 52K, while top guys like Dickenson earned atleast 412K
If the league needs to give the players more in 2008, 2009 I would rather see it go to league bonuses, for the grey cup, finshing first and Divisional playoffs.

instead of the current like 6-10K a player gets for winning the grey cup, increase it by 2-3K if the players deserve more money, but this preferably should not be done until after the first full year of the TSN deal(so the 2009 Season)

The CFL is giving it's players alot, people just compare it to the "big 4" and think players are getting nothing, fact is MLB, NBA and NFL mainly are having players wayyyy overpaid.
Players who don't even get their teams deep into the playoffs are earning 10M+(Vick, 6 seasons has won 2 playoff games and got a 100M contract, alot of Blue Jay Players(4.5M for a so-so player), 30+ NBA players earning over 12M, a Nash 2 time MVP isn't even one of them)

If the cap goes up, players will start earning alot more but only a few. If someone wants that problem if fixed, you raise the league Min.

If the League Min is 50-60K and the cap is 4.5M
then all players make more, but most starters will still earn six figures.

But how much should players be making?
what is the average salary of a unversity grad? 42-45K?
So making the league min = to that works OR

Make the league min = 1% of the cap.
Right now that means the league min is 40.5K

Cap raises by X% so does the league min.

4.5M cap = 45K min salary.

Compare this to the NFL where the league min isn't even .5% of the cap.

A distinction must be made between football and non-football revenues.

Look at the Bombers and Riders as key examples, both at the end of the day ended with over 15M in revenues, but both earned alot on non-club revenues.

The grey cup does not count as a football operations earning.
For the Riders the rolling stones concerts don't count as part of their football revenues.

Both teams football revenues where between 12-13M

That means looking at the riders 5-6M it is fairly close to 50% of their total revenues.

Now NHL teams devote 54-56% of their revenues to players, but their revenues are so much higher that they are in range to be able to spend on their facilities.

CFL teams should be spending 50% on players/coaches so that the other 50% can be spent on the mass of other things like upgrading facilities.

Cap players at 40%, Coaches salaries at 10%
those two numbers can change to 45% players, 5% players w/e aslong as the end total is 50%(GM's are included in coaches)

The Bombers football operations expenses were 7.9M + 3M for marketing + 1.2M stadium costs
The Bombers CFL revenue + Game Revenue + CFL revenue = 11.18M

Where can players receive this extra $$ from?
CFL teams need some money in profits so they can do minor stadium/field and other upgrades atleast.

[url=http://www.bluebombers.com/images/PDF/2006annualreport.pdf]http://www.bluebombers.com/images/PDF/2 ... report.pdf[/url]

What I found most disturbing, was how the football operations expenses for the Bombers increased by $1.3M from the previous year. There is no way that revenues are going to keep pace with that kind of increase.

Looking forward to 2007 and beyond, we expect that our operations will continue to be challenged by rising operating expenses (including rising salary costs resulting from the CFL’s salary management system) and an aging, outdated stadium facility.
funny how they blame the rising costs on the SMS, but noone is saying they [b]have[/b] to spend to the limit of $4.05M.

if they continue to spend what they did in '05, they would have no problem.

if anything, the SMS helps the bombers stay competitive by spending less than the cap limit, because if they decide to only spend $3.5 million on player saleries, atleast they know other teams can only spend $550,000 more than they are, whereas, without a cap, the bombers could spend $3.5M while other teams spend up to $7M or more.

either way, this breakdown just shows why the bombers need asper....in a few years without asper, any money they have in the bank currently, would be gone at this current rate.

I do agree and have been previously saying the Grey Cup "pot" for the winners should be like the old XFL had, a million dollar game divided by the 46 players would be 21,700 for the winners share. For the loosers I would say .5M should be involved or $10,350.
With the league thinking about selling the Grey Cup naming rights and hopefully getting no less then $10M per year, my figures could easily be established.

I dont want to sound stupid, but Im 17 and I have a question about this. Since the american players play in Canada, they have to pay Canadian income tax. When they go bck home, do they have to pay it again there?

No. You only have to pay tax in one country or the other. This is by a long standing agreement between the two countries.

Part of that increase is the 600K in Bonuses the Bombers gave out in front loaded contracts(as reported by Ed Tait this week in the Free press, I think tuesday)
So the Bombers expenses should go down by around 400-600K in the 2006 season.

Also should be looked at was the mass amount of injuries resulting in having to bring in G.Jones and E.Wilson because: every OL except Khan got hurt at one time.

All that said the blue did go from spending like 3M in 2005 to like 4.3M in 2006.

But their yearly expenses in 2007 should be say 3.9M(max)

there is a Min to the Salary cap teams must spend atleast 3M$

Also remember some guys the blue Brought in that are taking up large chunks of money:

Derek Armstrong - 200K* in 2007, got 100-150K in 2006
Barrin Simpson - 250K in 2006, should be 250K in 2007
Malveaux - atleast 120K in 2006, 150-180K* in 2007
Malbrough - 200K range
Kyries Hebert - 200K range

guys who got bonuses
Glenn
Roberts
Simpson
Armstrong
Malveaux
Brown
Khan
*Bean (not sure if he was in december or November)
Total of all their bonuses ~600K

Milt Stegall retires in 2008 that's 250K less money spent

so it could be the blue have the trend going the other direction, spending atleast 400K less in 2007 and sending 100K less then that in 2008(with a garanteed 430K more in revenues then their 2006 season from the league or 1M more then the 2007 season)

BC and TO will be over the cap(by atleast 50K) meaning money gets taxed and sent to low revenues teams(winnipeg)

Argotom was the 1M$ XFL game not total bonuses?
67% went to the winner and 33% to the loser?

I don't know about a 1M dollar game(yet) but the Grey cup is already like a 400K$ game, If players deserve more then for 2008 it can bump up to a 600K game and see how that works.
depending if league revenues go sky high then 1M fine

My guess is most Americans would just pay income tax in the United States although the money is earned in Canada. They are still mainly citizens and residents of USA.

If the average football carear is 4 years, do you think 45k is enough now? Yes an university grad can make 40k, and progress financially from there, but usually their job lasts 40 years not 4! CFL players need every dollar they can get. After they get cut from their team, hopefully that college degree can land them something to make it through the rest of there life.

That college degree is supposed to. If they didn't earn one, or just took easy courses to get by because they thought they were going to make it big in the pros and it didn't work out, it's not the CFL's responsibility to take care of them and pay them more now to make up for it. No one getting out of school is guaranteed anything.