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“Pegged cap” was players’ idea, not league’s

AP I MEX Mexico Money Found

In this photo released by Mexico’s Attorney General’s Office (PGR) on Friday March 16, 2007 a large amount of cash in U.S. dollar currency is displayed at an undisclosed location in Mexico City. Federal officials seized US$ 205.6 million ( 154.3 million) in cash from a luxury house in one of Mexico’s most upscale neighborhoods and said they believe the money was tied to the methamphetamine trade. Seven people were detained as well.(AP Photo/PGR-HO) NO SALES


On Tuesday, Seahawks guard and NFLPA* player rep Chester Pitts joined PFT Live to talk about a range of issues relating to the labor situation.

At one point, Pitts suggested that the switch from a compensation model based on shared revenue to a “pegged cap” occurred at the behest of the owners. Sources with knowledge of the situation contend that the players, not the owners, introduced the concept of the determining a team-by-team salary cap over a period of years, in lieu of focusing on a split in the revenue with a fluid cap based on the annual intake.

We’re told that the players pushed the concept of a “pegged cap” at the infamous meeting on the day before the Super Bowl, which produced multiple reports of Panthers owner Jerry Richardson disrespecting players like Colts quarterback Peyton Manning.

The “pegged cap” system uses revenue projections to determine the numbers. If the actual numbers come in lower, the players still get paid. One major area of dispute has arisen from the question of whether and to what extent the actual performance exceeds the projected revenue growth. The owners’ offer of March 11 omitted that wrinkle; the players want to share in the upside.

The players, we’re told, prefer a “pegged cap” approach to expense credits because it entails simpler auditing and fewer disputes.

As of right now, the two sides are $10 million apart per team on the the “pegged cap” approach, which is driven by projected revenues. The owners have offered $141 million per team in salary and benefits, and the players have requested $151 million. If they can bridge the gap and devise a procedure for handling any excess growth, they should be able to do a deal fairly quickly.

As to 2012, it’s our understanding that the gap in the respective cap proposals is only $5 million per team, with the league agreeing to pay what the players have requested in 2013 and 2014.

Again, a fair procedure for sharing any excess must be developed. And we think that, if/when the parties ever talk again, it can be. But first they have to talk again.

That’s the most disappointing aspect of the 19-days-and-counting lockout. No talks have occurred.

Even without negotiations, nothing stops the players from submitting a comprehensive written offer in response to the March 11 terms proposed by the owners. The letter can even be signed by class counsel, to preserve the appearance that the NFLPA* isn’t calling the shots, even though folks like David Cornwell believe that NFLPA* executive director DeMaurice Smith continues to run the show.