A week has gone by since the start of the free-agency period. Amid a flurry of offseason deals and with each team reshuffling its roster, there is no doubt that effective cap management has become an art. Since 1994, the salary cap has been a marque feature of the NFL. While this financial restriction has ensured a competitive balance, it has no doubt given managers and owners grief. According to SB Nation, of the four major American sports leagues, the NFL has the lowest correlation of year-to-year success. Since a successful outing in 2017 could mean a disastrous one in the next, teams have found ways to reinvent themselves to stay ahead of the curve.
Teams have gotten better at managing their cap space. Data from OverTheCap.com shows that 20 teams have over 20 million dollars in cap space while the remaining twelve are have over 40 million. Perhaps teams have gotten better at allocating wages between a select number of higher-paid stars and a majority of lower-paid players. Bill Walsh, in his book “Finding the Winning Edge,” wrote that “One aspect of the cap that is a major concern for all parties is the disproportionate amount of funds being committed to a smaller and smaller group of players.” In 1996, when Welsh wrote the book, teams on average spent 51 percent of their salary cap on their 10 most expensive players. Since then, this average has stayed more or less the same, with the percentage in 2017 slightly decreasing to 48 percent.
It is safe to say that Welsh’s fear of an increasing wage disparity within the league has not manifested itself. Though, in theory, a team that spends more on elite players will be more successful, the salary cap prevents them from spending absurd amounts to draw star players. The cap also prevents big market teams from achieving a level of dominance like the 2000-era Yankees (or Real Madrid) by virtue of their payrolls. Any NFL team that spends too much on a few players risks putting all their eggs in one basket and are hurt more by injuries and potential roster gaps.
According to SB Nation, teams that spend a little under 60 percent of cap space on their 10 most expensive players have a better chance of success. Of the eight teams that spent between 50 and 59 percent of cap space on their top 10 players, six finished the season with a positive scoring margin. These teams were Minnesota (+130), Pittsburgh (+98), the Los Angeles Chargers (+83), Kansas City (+76), Atlanta (+38) and Detroit (+34). The analysis quickly notes, however, that this ratio is not the only indicator of a team’s success and that correlation is not causation. Health and the quality of players signed to smaller contracts must also be taken into account.
Still, with every team well below the salary cap due to savvy financial management, no single team has emerged with a competitive advantage. Now that teams have more cap space, it has become easier to trade for more veteran players, a strategy that has contributed to New England’s success over the last two years. Last offseason, Philadelphia acquired veterans Ronald Darby (cornerback), Tim Jernigan (defensive tackle) and Jay Ajayi (running back), all of whom played vital roles in the team’s championship run. With the rest of the league following suit, teams will have to find new ways to build their rosters.
