NFL's 2021 salary cap could take major hit if games are played without fans

[CowboysFaninHouston]

The league will just fix it and not stick to the formula for one year. Obviously the PA will go along so the players don't lose 1/3 of their salary.

I agree, but I think the owners will ask for some concession from players, and not agree to eat the whole thing. if the NFLPA pushes on the CBA, then the cap goes down and lots of veterans will hit the market and it will be hard to sign them, given the cap situation for all the teams in the league...this will pin players against each other, grabbing early dollars to make sure they are on a team.....I doubt if NFLPA would want that.

 

[CowboysFaninHouston]

At 200 dollars per seat and 60,000 seats a game that's a big loss.

200 x 60,000 = 12 M

12M x 256 games = 3B

Each team is set to lose about 96M


So more than likely they'll let fans in if they are wearing mask. Heck they might even supply mask to fans if it gets them in the seats.

for the owners, add to that the concession stand losses, not sure if that counts in the revenue or not...

 

[charron]

Yeah I am not buying it.

How do you cut the cap by tens of millions and still have a functioning league? How do you expect a team to trim, say 70MM, from their cap?

And the NFLPA will lose their minds. Because if they try to cram the cap back down that means a to of veteran players are going to get cut and they’ll have to sign for way less.

i agree. maybe it doesn't go up but i don't think they can cut it based off 1 down year.

 

[Flamma]

Yeah I am not buying it.

How do you cut the cap by tens of millions and still have a functioning league? How do you expect a team to trim, say 70MM, from their cap?

And the NFLPA will lose their minds. Because if they try to cram the cap back down that means a to of veteran players are going to get cut and they’ll have to sign for way less.

I agree, it would be ridiculous. But every team would have to do it. I just have no idea how you do it? You would think dead cap alone would come into play if a team tries to cut salaries. Players aren't going to willingly take a pay cut.

But keep in mind the NFLPA can lose their minds all they want. They agreed to a contract and signed it. They can set themselves on fire at mid field and there isn't a thing they can do about it.

What can happen is if both sides determine this would be a disaster and detrimental to the league, they can draft an MOA (memorandum of agreement) to mitigate the situation for one year. But this needs to be voted on and I'm not sure what percentage of owners need to agree for it to pass. But know that there will be owners that vote no because they'll have the space.

 

[Flamma]

I think that to radically adjust the parameters of the cap the league will surely have to provide justification to the union. Just not sure they are ready to make those financial records public....

Unfortunately not much justification is needed other than what is written into the contract.

 

[Fla Cowpoke]

For sure. I don’t think there is any motivation to sign a gigantic deal right now

Doesn't make sense...if he signs a long term deal most of that will be front loaded so he would get it anyway...team likely will have to pay huge singing bonus and guarantee at least a couple years salary. What are the gonna do? Cut him? That would cause a huge loss to the team. And if they did, Dak would be a free agent and free to sign with anyone... Problem being everyone's cap is going to be reduced so next year likely is not the best time to maximize your $$$. It is in Dak's best interest to cash in now

 

[HungryLion]

its about percentage....the agreement, regardless of who makes the billions, is that the players make 48% of revenue and its going up to 48.5%. so if the revenue goes down, so does the cap and the rules are for teams to stay in the cap...so something is got to give. I am sure owners would want players to give a little. players would want owners to take the hit. regardless, its not easy to ask for people to give up hundreds of millions

I hear ya man. An agreement between the NFL and NFLPA on how to address it would make the most sense.

We have to remember there’s no way either party envisioned a season without any fans in the stands, when the CBA was agreed upon.

What can’t happen is just allowing the salary cap to just drop a huge amount out of nowhere though without some kind of adjustment made to player salaries.

I mean there’s no way teams cap accountants have developed their plans on having the cap drop 30+ million in one year. It would decimate rosters.

 

[Creeper]

Even if the CAP goes down 5%, a lot of teams will be hit hard. Players whose contracts are up will probably sign for one year deals hoping the cap will go back up in 2022.

 

[Kwyn]

Doesn't make sense...if he signs a long term deal most of that will be front loaded so he would get it anyway...team likely will have to pay huge singing bonus and guarantee at least a couple years salary. What are the gonna do? Cut him? That would cause a huge loss to the team. And if they did, Dak would be a free agent and free to sign with anyone... Problem being everyone's cap is going to be reduced so next year likely is not the best time to maximize your $$$. It is in Dak's best interest to cash in now

Dak doesn’t want to sign anyway. He has been approaching this with an eye to play on the tag and then enter the pool as a 2nd year tag (40m+) then straight up free agency in 2022 or, sign a deal next year after Mahomes and Watson reset the market.

My position, and I could have been more specific, is that the team would be better off avoiding any long term commitments because the cap will likely go down. Committing to gigantic cap hit in 2021 when you don’t know what the cap for that year will be doesn’t make sense for the team

teams who are at or at the cap for this year and who are projected to be at or over the cap next year are going to be in a world of hurt.

This is one off season where saving for a rainy day makes sense because the salary cap rain is coming in 10 months.

Timing is actually helping the Cowboys for a change

Now, all that said, the Cowboys and Dak may just decide to go crazy and sign a ridiculous deal now and roll the dice ok the revenue and cap for next year but that would surprise me

 

[Kwyn]

In theory this sounds great. In practicality, how's it going to work? 23 teams would be over the cap in 2021 if the cap is reset around $140MM. And in many cases, those are teams that don't even have 53 people signed. For example, the Raiders projected cap spending next year is $174MM, which would be $34MM over a reset cap of $140MM. And that's for just 25 players. They aren't the only team in that situation.

Cowboys only have 40 players under contract for 2021 and would be $34MM over the cap. So not only would they have to cut or restructure a bunch of guys to get under the cap, they have to create enough space to then build a roster of 53.

So it sounds all great in theory to say the cap goes down because revenues are down but in practice it's going to create havoc and be exceptionally messy and unwieldly to try to get 3/4s the league to not only cut enough players/restructure enough players to trim millions off their cap BUT THEN ALSO create enough space to be able to sign a roster of 53 players (well technically only the top 51 count against the cap).

I think you would see free agent money dry up except, perhaps for QB’s.

I think you would see a lot more vet minimum contracts

I think you would see a bunch of 1-year deals while everyone prays for higher revenues generating a more normal cap in 2022.

I think you would see a huge number of players being asked to renegotiate and those who won’t could find themselves in a huge free agent pool with a bunch other players who are willing to work for less

The only way players and salaries remain untouched is if the owners go crazy and basically say

“Hey players. You know all that stuff we fought hard for on the our side to constrain salaries by tying them to the league revenues? We’re just going to eat those billions of dollars in lost earnings but still pay you guys as if we had a record breaking year on gross revenues.”

That seems as likely as the players saying

“Hey owners. You know that extra 1-1.8% increase in our slice of the pie that we fought so hard for? You can keep that. We’ll go back to the 47% that was in the old CBA because we want to help out. Oh, go ahead and take out all those pension increases and higher vet minimum contracts too.”

Union contracts are not easily changed and doing so requires a serious undertaking and there is always negotiation and give and take in any amendments. Changes that just benefit one side, such as the idea that the cap would remain untouched in the face of billions in losses, would only be done out of goodwill.

Do NFL owners seem like a group that would eat a 3.2 billion dollar loss and not seek to tighten up spending to reflect the new normal? Would they eat that 3.2b strictly out of good will?

I don’t think any business would and I don’t think any union would agree to eat 3.2b on their end either.

So, you end up relying on the CBA that was built to ensure that both parties benefit in good times and have to tighten their belt in bad times. That’s why it takes so long and the process requires votes by both parties to ratify the deal.

 

[Kwyn]

i agree. maybe it doesn't go up but i don't think they can cut it based off 1 down year.

They can and they would because that’s how the entire framework of the league is built.

The players and owners shares of the revenue pie and how the cap is a function of those numbers. It is really the only thing in the CBA that even matters. All the rest, pensions, healthcare, weed smoking, vet minimums, etc, is fringe and small potatoes.

Just waiving the revenue sharing portions of the CBA is like waiving gravity.

 

[Kwyn]

I hear ya man. An agreement between the NFL and NFLPA on how to address it would make the most sense.

We have to remember there’s no way either party envisioned a season without any fans in the stands, when the CBA was agreed upon.

What can’t happen is just allowing the salary cap to just drop a huge amount out of nowhere though without some kind of adjustment made to player salaries.

I mean there’s no way teams cap accountants have developed their plans on having the cap drop 30+ million in one year. It would decimate rosters.

But they do plan on it. All of the major sports have force majeur (act of god) provisions in their deals that anticipate things like war, and plague. They now typically even specify plague/pandemic, provisions

baseball right now, with the loss of their entire season in the offing. Is having to explore those aspects of their own agreement with players to find out how much of player salaries are unpaid.

 

[charron]

They can and they would because that’s how the entire framework of the league is built.

The players and owners shares of the revenue pie and how the cap is a function of those numbers. It is really the only thing in the CBA that even matters. All the rest, pensions, healthcare, weed smoking, vet minimums, etc, is fringe and small potatoes.

Just waiving the revenue sharing portions of the CBA is like waiving gravity.

I'd assume it'll affect the revenue sharing as it should. But for them to drop the CAP by 70 million is completely different then revenue sharing. Cutting the cap will mean some teams will have to cut players or pay penalties and i doubt some owners will go for that. Imagine the eagles having to cut 70 million from salaries to fit under the cap? but then again it would be a way to reset how the free agency market is done.

 

[Sydla]

Dak doesn’t want to sign anyway. He has been approaching this with an eye to play on the tag and then enter the pool as a 2nd year tag (40m+) then straight up free agency in 2022 or, sign a deal next year after Mahomes and Watson reset the market.

My position, and I could have been more specific, is that the team would be better off avoiding any long term commitments because the cap will likely go down. Committing to gigantic cap hit in 2021 when you don’t know what the cap for that year will be doesn’t make sense for the team

teams who are at or at the cap for this year and who are projected to be at or over the cap next year are going to be in a world of hurt.

This is one off season where saving for a rainy day makes sense because the salary cap rain is coming in 10 months.

Timing is actually helping the Cowboys for a change

Now, all that said, the Cowboys and Dak may just decide to go crazy and sign a ridiculous deal now and roll the dice ok the revenue and cap for next year but that would surprise me

It wouldn't necessarily be a giant cap hit in 2021, especially when considering the cap hit for tagging him again would likely be even higher. So regardless of whether you sign him or not now, if you keep him in 2021, his cap hit is going to be high (likely much higher on the tag).

 

[Kwyn]

I'd assume it'll affect the revenue sharing as it should. But for them to drop the CAP by 70 million is completely different then revenue sharing. Cutting the cap will mean some teams will have to cut players or pay penalties and i doubt some owners will go for that. Imagine the eagles having to cut 70 million from salaries to fit under the cap? but then again it would be a way to reset how the free agency market is done.

Exactly.

It would be a massive change and honestly, one the owners might welcome for the exact reason you mention in your last sentence.

Revenues go back to normal in 2021 and the league has shed a ton of really terrible contracts.

 

[Sydla]

I'd assume it'll affect the revenue sharing as it should. But for them to drop the CAP by 70 million is completely different then revenue sharing. Cutting the cap will mean some teams will have to cut players or pay penalties and i doubt some owners will go for that. Imagine the eagles having to cut 70 million from salaries to fit under the cap? but then again it would be a way to reset how the free agency market is done.

Exactly.

The Eagles are projected to be $50MM over the cap as it stands now in 2021. And that's with the cap around $215MM. Now tell them they have to not only somehow find that $50MM, they have to now find another $70MM in space to get down to a league cap of say, $145MM. Oh and still find enough space on top of that to sign a 3 man roster.

It's going to be almost impossible for some teams to do this without completely and utterly ripping apart their roster. And frankly, I saw a tweet that suggested some teams might not even be able to do that because with dead money hits, cutting some of these high priced players would actually do the exact opposite of saving cap space - it would decrease your cap hit. Some teams will struggle to field rosters, some big time players may end up just sitting out because teams won't be able to bring them in (or keep them on their rosters).

Kwyn is arguing procedures here and not looking at the real world ramifications of this. It's going to be almost impossible to walk the cap back like 30-40% and not see some significant issues and pain for the league.

 

[Kwyn]

It wouldn't necessarily be a giant cap hit in 2021, especially when considering the cap hit for tagging him again would likely be even higher. So regardless of whether you sign him or not now, if you keep him in 2021, his cap hit is going to be high (likely much higher on the tag).

Just for the one year it would be crazy but committing to one year in a time of uncertainty is often the safest move.

 

[Kwyn]

Exactly.

The Eagles are projected to be $50MM over the cap as it stands now in 2021. And that's with the cap around $215MM. Now tell them they have to not only somehow find that $50MM, they have to now find another $70MM in space to get down to a league cap of say, $145MM. Oh and still find enough space on top of that to sign a 3 man roster.

It's going to be almost impossible for some teams to do this without completely and utterly ripping apart their roster. And frankly, I saw a tweet that suggested some teams might not even be able to do that because with dead money hits, cutting some of these high priced players would actually do the exact opposite of saving cap space - it would decrease your cap hit. Some teams will struggle to field rosters, some big time players may end up just sitting out because teams won't be able to bring them in (or keep them on their rosters).

Kwyn is arguing procedures here and not looking at the real world ramifications of this. It's going to be almost impossible to walk the cap back like 30-40% and not see some significant issues and pain for the league.

I mentioned that an addendum would need to be ratified and agreed to by both parties and I believe that’s the most likely outcome.

What I am also saying is that the idea that the owners are just going to eat 3.2 billion dollars is a simplistic “just git ‘er done” approach.

Players and owners will feel the pain of the lost revenues. It won’t be one sided.

 

[Sydla]

Exactly.

It would be a massive change and honestly, one the owners might welcome for the exact reason you mention in your last sentence.

Revenues go back to normal in 2021 and the league has shed a ton of really terrible contracts.

The problem is it's not that easy to just "shed" those contracts. Many of those terrible contracts carry significant dead money hits which would do the opposite of helping a team get under the cap by cutting them........... they'd make it even tougher to get under the cap.

Take Philly again. $50MM over the cap in 2021. So they have to get that $50MM back, then trim another $70MM or so. Natural inclination is to look at their biggest contracts and see what can be cut there to start really trimming the fat.

Problem is many of their big contracts are new. So for example, Lane Johnson would be a nearly $17MM cap hit in 2021. Cut him? Can't. You cut him, you have to take a $33MM cap hit in 2021. That's not helping Philly, it's hurting them. Same with Fletcher Cox or Carson Wentz or Zach Ertz, etc. So then you are left just cutting middle and lower guys but to find $120MM in cap space, you've basically cut your roster to 20 guys and there is little cap space to fill out a roster.

 

[charron]

Exactly.

It would be a massive change and honestly, one the owners might welcome for the exact reason you mention in your last sentence.

Revenues go back to normal in 2021 and the league has shed a ton of really terrible contracts.

I would think if they use it as a tool to reset the market they probably wouldn't raise then CAP back the next year. Would make sense to keep it low untill the new TV deal comes through and then raise it but use the lower starting point as leverage. anyway I doubt this happens but you never know.