Lockout Update: $320 in Lost 2010 Benefits...
This is an interesting issue that while not directly involved with the CBA negotiations is still something which must be resolved between players and owners. Like the article points out, $320 mil ain't pocket change.
Mon Jul 18 12:09pm EDT
Lockout update: The real story behind $320 million in lost 2010 benefits
By Doug Farrar
As we detailed yesterday, one of the final outstanding issues between the owners and players in the ongoing work stoppage everyone hopes will end this week is the $320 million in lost benefits that weren't paid out in the uncapped year of 2010. We've had several questions from readers regarding how those benefits were lost — after all, it's tough to lose that much money under a seat cushion on the couch — and Yahoo! Sports has learned that the source of the requested restitution of benefits is less about pure cash and more about actual unfunded benefits.
There were specific benefits in capped years that owners were beholden to pay to players in capped seasons, per the old collective bargaining agreement. When the league turned to an uncapped year in 2010, and revisions to the overall compensation structure were made, benefits lapsed in several different sectors. For coaches, this meant that their 401(k) plans would no longer be funded — and that move was made by an owner vote in May of 2009. For players, 401(k) funding as well as other similar benefits — tuition reimbursement, supplemental health plans, and other obligations that would have been set in a capped season — were off the table for 2010.
In addition, the loss of performance-based pay as a benefit was huge for both sides — it prevented many players with low base salaries from earning bonuses based on participation as they had in previous years, and it allowed the owners to pocket at least an additional $100 million dollars in 2010. In 2009, total performance-based pay totaled over $109 million, according to Football Outsiders salary cap expert Brian McIntyre.
Many of the league's best young players received extra benefits based on performance over base salary — $282,000 to Atlanta Falcons cornerback Brent Grimes(notes), $294,000 to Tampa Bay Buccaneers linebacker Geno Hayes(notes), $301,000 to Green Bay Packers guard Josh Sitton(notes), $304,000 to San Francisco 49ers safety Dashon Goldson(notes), $306,000 to Seattle Seahawks linebacker David Hawthorne(notes), and $317,000 to New Orleans Saints guard Carl Nicks(notes). Losing those kinds of incentives for 2010 was bad news for players like Houston Texans running back Arian Foster(notes), who's set to make $480,000 base salary in 2011 despite leading the NFL in rushing last season.
In the new proposed salary cap structure, it's estimated that there will be approximately $20 million in benefits per team above the $120 million cap, and that's been standard operating procedure in previous capped seasons — player costs actually consist of cap spending as well as benefits and other ancillary expenditures. As the NFLPA goes through that series of line items, and both sides wish to move forward with the idea that everyone's able to proceed as if this little work stoppage never happened, reconciling those lost benefits would seem to be a wise move.
It's also been our speculation in the recent past that with Judge David Doty set to rule on damages in the lockout insurance case, the owners might be happy to pay those lost benefits as part of a global settlement that would cause Doty's ruling to be far less a factor. The owners were caught trying to strong-arm television networks into giving them guaranteed broadcast and digital rights fees — all the better to fund an extended work stoppage — and Doty held the approximately $4 billion received in escrow while he considered damages.
The judge who has generally ruled in favor of the players over the last 20 years has been quiet whole negotiations continue, but he could drop a nine-figure hammer at any time that could further complicate the process, and benefit payments could be the one thing that could ease that transition.
Related: Josh Sitton, Arian Foster, Atlanta Falcons, Green Bay Packers, Houston Texans, New Orleans Saints, Seattle Seahawks, San Francisco 49ers, Tampa Bay Buccaneers