On Yahoo! Charles Robinson writes about life in the NFL:
... as cold as it may sound, those moves are exactly why the Patriots have become the epitome of league success. They know when to cut players who are on the verge of slowing their momentum or capsizing their salary cap. Some might call such budget crunching hypocritical for a franchise that fashions itself on the "team" concept, but it's simply smart business and a sacrifice for the good of those who remain.
[Ty] Law, even at full health, isn't worth $12 million in a single season. [David] Patten is a No. 3 receiver, and not worth the "featured wideout" salary that the Washington Redskins offered. Phifer had deteriorated into a role player, and his spot was better suited for someone who could be groomed into a future starter. [Troy] Brown, as vital as he was in 2004, is beyond his prime and would have played a reduced role last season had it not been for injuries, particularly to the defensive secondary where he played as a nickel back.
The implicit economic lesson of decisions based on marginal benefits and marginal costs is simple enough. The application can be tricky because we do not know the future value of a given individual with certainty, so mistakes are made. Beyond uncertainty, skill in application is not uniform across teams and GMs. As the article notes, the Patriots have excelled in the application of the principle in recent years.
One aspect of the decision that the Patriot's leadership grasps better than some others is "teamness" of football production. To be successful, teams must have a mix of good and very good players. However, they may reshuffle the precise mix to achieve success. Tennessee's GM, Floyd Reese, put it this way, "I would rather have 5 good players than one star and four average players."
The value of the "star" player differs across sports based on the impact that a single player can have on overall performance. In basketball where the influence of only 7 or 8 players matters a lot, one star can spark a championship (The Pistons win was an anomaly in this regard). In football 40-50 players impact results in a variety of ways. Parting company with Randy Moss or Ty Law is just not the same as parting company with Tim Duncan. Baseball falls in between, but I will save that for another day.