It took a season-ending injury to Melvin Ingram for free agent Dwight Freeney to find a job.
Less than two weeks after his signing, Freeney is crying collusion.
“I basically think the owners got together and decided not to spend the cash on free agents,” Freeney told Mike Freeman of CBSSports.com. “I definitely think that's part of it. I think the owners made a pact. There's only 32 of them and none of them broke ranks. I think they all decided not to spend money.”
Freeney is totally off base with his comments, largely because his own experiences as a long-time star player has blinded him to the realities that govern NFL free agency. Freeney values himself and other veteran free agents more highly than NFL teams. He was originally seeking a contract with $6 million in annual salary that he basically had no chance of getting.
A Declining Player
Freeney still sees himself as the great pass-rusher he has been throughout his career, but everyone else sees a declining player. Freeney’s sack numbers have declined each of the past three years, from 13.5 sacks in 14 games in 2009 to five sacks in 14 games in 2012.
The decline also coincides with Freeney hitting the golden football age of 30. Although pass-rushers can produce past 30 (and Freeney did still produce), the fact that he is an outside speed-rusher has hurt him. It’s not as easy for Freeney to disguise his declining speed with good technique.
Freeney’s ProFootballFocus’ pass-rush grades (subscription required) have also declined each of the last four years, so it’s not just the ebb and flow in his sack statistics. Freeney’s production also dipped significantly from the 2010 season to the 2011 season, which doesn’t jibe with the idea that it had to do with him playing outside linebacker for the first time in his career in 2012 (as he will be asked to do by the Chargers in 2013).
ProFootballFocus also publishes a signature statistic that takes into account sacks, hits and pressures. Freeney’s was the most productive 4-3 defensive end in 2009 with 66 total pressures. In 2012, Freeney had just 47 total pressures, despite rushing the quarterback 38 more times.
Freeney obviously still thinks highly of his own abilities, and he could have a bounce-back year like he did in 2008 after recording just nine sacks in 25 games from 2006-2007. The only problem is that Freeney will not have age or Peyton Manning on his side.
Teams Are Spending
Freeney is not the first player, nor will he be the last, to suggest that collusion is going on among owners. There’s no doubt that the owners are working together to make gobs of money, but to suggest they are trying to fix free-agent prices is silly.
The NFL already has fixed wages in the form of a salary cap that was settled on in an agreement collectively bargained by the owners and the players. Since player costs are fixed, there is not really any reason for owners to collude to keep down costs.
If teams were colluding to keep spending to a minimum, it would reflect in the salary cap space of each team. According to cap figures at spotrac.com and overthecap.com, teams have spent between 91 and 97 percent of the allotted salary cap. Even with this significant margin of error, the remaining cap space remains between three and nine percent of the total salary cap.
As of June 1, teams will gain more cap space that will allow some teams the freedom to sign veteran free agents. There are also plenty of unsigned rookies who will eat up a lot of the remaining cap space. Freeney incorrectly assumes teams are done signing veterans.
Many teams getting cap relief on June 1 signed a lot of players on credit in the past and are now paying the price. Players got paid more than they should have been paid in the past and teams have been forced to slash spending to conform to the salary cap.
Teams like the Dallas Cowboys would like to spend more, but can’t because of the cap. Teams like the Oakland Raiders would like to spend more, but are paying the price for giving veterans huge contracts over the past few years.
A Team Perspective
From a team’s point of view, there is no value in signing an expensive veteran if you can get a younger player to produce for a lot less money. The influx of cap space that many teams will get on June 1 means that unsigned veterans will be get a longer look as training camp approaches and teams continue assessing their younger players.
Until we get into June and July, it makes sense for teams to keep a little cap space reserved in case a player becomes available that they want. Teams need the cap space liquid in case of an emergency. Holding off on signing a player also drives down their prices, which is just smart negotiating.
Freeney’s signing was a shining example of these principles. The Chargers didn’t have a lot of cap space, so it didn’t make sense to sign Freeney until they lost Melvin Ingram to an ACL injury during organized team activities.
When Ingram was lost, the Chargers had enough cap flexibility to sign a replacement. Freeney’s leverage skyrocketed because the Chargers now needed him. If the market had never materialized, Freeney may have been forced to sign a lesser deal with a team like the Denver Broncos.
Some teams are going to be cheap and others are always going to spend as much as they can. But it’s smart business for any team to keep a percentage of cap space reserved in case it is needed. A player who can be a replacement for an injured starter may need to be signed, or an impact player may become available. Teams that aren’t hamstrung by the salary cap are going to be a better position to remain competitive.
By comparison, the Federal Reserve requires depository institutions (banks, etc.) with liabilities of over $79.5 million to hold 10 percent of their liabilities in the form of cash. Smaller institutions have to hold three percent in cash or deposits with the Federal Reserve. Other types of businesses without liquid reserves are at a competitive disadvantage in the marketplace.
While the NFL is a unique business, many of the principles still apply. Getting value, spending wisely and having reserves all make good business sense. The salary cap data noted above suggests teams are spending or have already spent most of their cap dollars.
As it was for Freeney, a deal can get done quickly when team needs and an accommodating cap situation makes the signing sensible for both sides. Players may not like the current system, but it’s the one they collectively bargained, and there isn’t much evidence to support Freeney’s claims of a conspiracy.
If 32 teams were colluding to not spend money, wouldn’t there be some hard evidence? There is none. If teams decided not to spend money and there is a rookie wage scale, where is the money going? It’s being spent on veterans, just not ones like Freeney.
Veteran players are getting the share for which they collectively bargained, but smart teams have been opting to reward their younger players with extensions rather than spend foolishly on older, declining or less productive free agents.
It’s too early to tell if veteran players will benefit from the new arrangement because teams are still shedding contracts that were made prior to the deal being signed. If prices on free agents remain low over the next couple of years and the salary cap data shows most teams spending near the salary cap floor, the players might then have a legitimate complaint.