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Monday, April 07, 2008
David Katz on Effects of the NFL's CBA on Young Reserves and Veteran Journeymen

David E. Katz, a 3L at Harvard Law School, has posted an excellent article on SSRN on the NFL-NFLPA collective bargaining agreement and how it economically disadvantages young reserves and veteran journeymen. He examines why the league and players' association would pursue such a framework and what it may suggest about their next CBA, which could expire as early as 2010.

Here is an abstract from his piece, "The Veteran Premium Problem and the Effects of the NFL Collective Bargaining Agreement on the League's Reserves," which can be downloaded for free at SSRN.
NFL franchises are extremely profitable and rank as the highest valued teams in all of sports. The Collective Bargaining Agreement (CBA) attempts to maximize the league's value and profitability and share the wealth equitably between players and management by creating, among other things, free agency, a salary cap, and mandatory retirement benefits. However, the main CBA provisions along with a tradition of not guaranteeing yearly salary disadvantage young players and veteran reserves. Players are not eligible for true free agency until their fourth year in the league, dead money from signing bonus cap charges attributed to players no longer on the team limits what organizations can spend on reserves, and rising minimum salaries and retirement benefit contributions make many veterans too expensive for teams to sign. Although teams should prefer having experienced players as backups and on special teams, the NFL regulatory structure gives teams the incentive to sign young and inexperienced players to those roles.


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Blogger Jeremy -- 4/08/2008 12:56 AM  

To combat the excerpt from David's article he should be aware of the following revision that was recently made to the NFL's CBA...
"This is an example from 2003...A qualifying player with 12 Credited Seasons will receive a Minimum Salary of $755,000; however, only $450,000 will count against his club's Team Salary. The difference of $305,000 will be counted as a Player Benefit and be paid out of the League-wide benefit pool. As a result, the 10-year veteran making $755,000 will cost the club the same as the three-year veteran making $450,000."

Therefore it should be apparent to you, David, that the league has integrated measures into the CBA to create a more equitable spectrum of cost effective signings for the clubs interested in veteran players. The point that you should be focusing on the most is how there must be a cap implemented on the rookie pool, which has seen the first round guaranteed money skyrocket disproportionately relative to veterans' salary for the past several years.

Blogger Jeremy -- 4/08/2008 12:59 AM  

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