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

Sydla · May 7, 2020

Kwyn said:
It’s all collectively bargained.

The cap is simply a mathematical calculation that the league and the players both agreed to.

Parties to a union contract typically don’t just ignore stuff that’s collectively bargained. That’s why the NLRB has rules that are so specific and binding when it comes to this stuff.

Stuck did a segment on this today. It’s similar to how the Superman deals in the NBA are calculated. It’s part of the CBA and it is what it is

If there are no fans at games, revenues *will* go down and the cap *will* as well unless the owner somehow just decide to eat a couple of billion dollars to make the players happy, which seems like a ridiculous idea to me.

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).

bandfan · May 7, 2020

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....

Oz-of-Cowboy-Country · May 7, 2020

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.

rags747 · May 7, 2020

DakPresgoat said:
Oh the billionaire owners are going to need to lower salaries from one season of no fans in the stands? When every other season they make billions in profits?

sounds like trash to me.

Each team does not earn Billions in profits yearly.

jazzcat22 · May 7, 2020

Easily fixed if the revenue drops that much to effect the salary caps. Say it drops 10%.
The NFL will just have a season or two that will allow teams to be 10% over what would have been the proposed cap figure for 2021, 2022 if need be.

The owners then will increase tickets as well as concessions to make up some of that difference.

RamziD · May 7, 2020

DakPresgoat said:
Oh the billionaire owners are going to need to lower salaries from one season of no fans in the stands? When every other season they make billions in profits?

sounds like trash to me.

Which they will more than make up for next year by increasing ticket prices or something like that.

CouchCoach · May 7, 2020

MichaelWinicki said:
There's this belief by many that ticket sales and other associated fees teams earn from home games doesn't matter because of all the money generated by TV...

Not true.

And I was one of those because I thought the ticket sales and everything associated with that was all to the owner and it was the TV money and then the gambling revenue that set the cap.

The question is if they do attempt to bring this off on time, with spectators, how will they pull that off and how many will show up? Already have governors stipulating no crowds at games in 2020 in hard hit states like CA and WA and the NE area will follow suit. What are they going to do, play all of the games in FL and GA because those governors have been out to lunch?

And this was before this latest news of these children coming down with Kawasaki Syndrome in NY and PHL and other parts of the world. That makes this a further developing story and the NFL's even talking openly about the season doesn't make them look very good. Planning for a future in doubt is fool's gold.

I know how badly we all want to think we're on the downside of this but that just isn't the truth, this virus has proven itself to be quite the stumper for medical science and it seems that every new development catches them a little bit more off guard.

Plankton · May 7, 2020

jazzcat22 said:
Easily fixed if the revenue drops that much to effect the salary caps. Say it drops 10%.
The NFL will just have a season or two that will allow teams to be 10% over what would have been the proposed cap figure for 2021, 2022 if need be.

The owners then will increase tickets as well as concessions to make up some of that difference.

What's the more likely outcome is that they negotiate with the NFLPA to keep the numbers as flat as possible, and in effect, borrow against future years, in exchange for the cap not rising as much for a multi-year stretch. Sort of similar to what was done in 2011-2012.

jazzcat22 · May 7, 2020

Oz-of-Cowboy-Country said:
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.

80% of those tickets if not more are already paid for from season ticket holders. Many of those payment will be due very soon, some already billed. Now ho many have not or can not pay for the PSL's or tickets at this time. I bet most can and have.

Now if games are canceled or say no fans allowed, they will have to give refunds. So here is what most teams will do, make them go through hoops to get that refund. First they will say it needs to be in writing, then they will push, use this for future credit, to pay for 2021 tickets. Then if done in writing how long will it take. In the mean time the team gets to use that money to invest. And no, it is not greed, it is business. Banks use you money to make profits as well.

But the good gesture thing would be they round it automatically immediately, but will they? So the impact make not be seen right away. Just my "kind of" uniformed opinion.

As to teams offering credit, yes they do that. When I had my season tickets, every year they pushed me to buy playoff tickets in early December. Then if not played, I could request a refund in writing or use as credit toward the next season. Now they do a pay as they play options. Meaning if on a credit card, you only get charged if there is a game if you want that options.
If I chose not to buy the playoff tickets the bugged the heck out of me to buy them, but there was no obligation. I did however once they started it'd the pay as they play option.

CouchCoach · May 7, 2020

Plankton said:
What's the more likely outcome is that they negotiate with the NFLPA to keep the numbers as flat as possible, and in effect, borrow against future years, in exchange for the cap not rising as much for a multi-year stretch. Sort of similar to what was done in 2011-2012.

That would make the most sense because if a drop of even 30M were to hit, there would be no place for the cut players to land. Too much money involved to let this bump in the road affect them.

The other course of action would be to put it to the Golden Geese, TV nets, to help make up the shortfall or threaten to add a streamer to the mix. Do not underestimate these owners to play hardball with TV, remember what Booger did to CBS to get FOX into the game?

dguinta1 · May 7, 2020

NFL and all of sports Don't Take the Fans for Granted!

Plankton · May 7, 2020

CouchCoach said:
That would make the most sense because if a drop of even 30M were to hit, there would be no place for the cut players to land. Too much money involved to let this bump in the road affect them.

The other course of action would be to put it to the Golden Geese, TV nets, to help make up the shortfall or threaten to add a streamer to the mix. Do not underestimate these owners to play hardball with TV, remember what Booger did to CBS to get FOX into the game?

I hate to tell you this, but the TV networks and media companies as a whole have been getting killed in this process. I work for one of them, and the stock price has dropped 70% since December. I'm not sure how much additional milking the NFL can do. They need to get it from streaming, because the OTA model is about maxed out.

CouchCoach · May 7, 2020

jazzcat22 said:
80% of those tickets if not more are already paid for from season ticket holders. Many of those payment will be due very soon, some already billed. Now ho many have not or can not pay for the PSL's or tickets at this time. I bet most can and have.

Now if games are canceled or say no fans allowed, they will have to give refunds. So here is what most teams will do, make them go through hoops to get that refund. First they will say it needs to be in writing, then they will push, use this for future credit, to pay for 2021 tickets. Then if done in writing how long will it take. In the mean time the team gets to use that money to invest. And no, it is not greed, it is business. Banks use you money to make profits as well.

But the good gesture thing would be they round it automatically immediately, but will they? So the impact make not be seen right away. Just my "kind of" uniformed opinion.

As to teams offering credit, yes they do that. When I had my season tickets, every year they pushed me to buy playoff tickets in early December. Then if not played, I could request a refund in writing or use as credit toward the next season. Now they do a pay as they play options. Meaning if on a credit card, you only get charged if there is a game if you want that options.
If I chose not to buy the playoff tickets the bugged the heck out of me to buy them, but there was no obligation. I did however once they started it'd the pay as they play option.

I dunno, public image is critical to them. If the media gets wind of what they're doing, they'll get hammered and come off looking greedier than they already are.

Public image for every company is going to be critical as people are in a foul mood and needing someone to blame and take it out on. The NFL has always been more pub seeking than the other pro sports, they need to be careful.

fivetwos · May 7, 2020

Something would have to be worked out.

Is every team going to cut half their roster?

It's a one year compromise.

CouchCoach · May 7, 2020

Plankton said:
I hate to tell you this, but the TV networks and media companies as a whole have been getting killed in this process. I work for one of them, and the stock price has dropped 70% since December. I'm not sure how much additional milking the NFL can do. They need to get it from streaming, because the OTA model is about maxed out.

Yep, I know as I was in the media and stay abreast of that. This might be the opportunity they've been waiting for to align with Amazon or Netflix since they've made out like bandits during this.

They already bent ATT the wrong way talking about the Sunday Ticket on a streamer but if they take the games to a streamer and allow fans to access that instead of nets, the NFL is basically feeding the beast that's been feeding on net TV but I think some of those owners already know that is the future.

jterrell · May 7, 2020

Parcells4Life said:
More incentive to make Dak play on the tag if that’s true.

Untrue. Dak's tag is already set by rule and will be 39M next year if franchised again.
If the worst happens and we did see a net loss of 50M on the cap that would be disastrous number to have to eat on the cap.
But smart teams will just leverage cap mechanisms to lower cap hits and feed them into future years when the cap rises insanely fast with returned fans.

The reality is the only meaningful cap impact would be if there were truly mass deaths in the 15% range over the next 18 months.
That type of disastrous impact would draw down the NFL but little else will be more than a blip.

Even if the NFL didn't have fans in stands to start the season they'd almost certainly have them later in the year and for the playoffs where real money is made.

Not noted by many is we will see a 17th game and more playoff teams this year for additional revenue.

csirl · May 7, 2020

I think its more likely that the owners will cancell the season rather than play at a significant loss. Its business.

CowboysFaninHouston · May 7, 2020

zekecowboy said:
The COVID-19 pandemic hasn't yet directly affected the NFL. Free agents signed contracts beginning in March. The 2020 NFL Draft went on as scheduled but as a virtual experience to prevent a large gathering of people. On Thursday, the league will release a full 17-week schedule set to begin in September.

Things could drastically change for the NFL if fans are unable to attend league events this year.

On Monday, Albert Breer of MMQB wrote NFL clubs could lose up to $100 million apiece in local revenue if spectators are not allowed to attend games because of the virus outbreak. The next day, ESPN's Adam Schefter explained closed-door games could drastically alter the league's salary cap during an appearance on the "MySportsUpdate" podcast:

See link below:

https://www.yardbarker.com/nfl/arti...edium=email&mb_edition=20200506&mb_loc=left_h

this is going to be huge and the NFL and NFLPA have to figure out what to do, since tagged salaries will have the highest impact on cap, specially if it goes down. if NFL is expected to adjust, so do the players...IMHO

CowboysFaninHouston · May 7, 2020

DakPresgoat said:
Oh the billionaire owners are going to need to lower salaries from one season of no fans in the stands? When every other season they make billions in profits?

sounds like trash to me.

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

jterrell · May 7, 2020

CouchCoach said:
Yep, I know as I was in the media and stay abreast of that. This might be the opportunity they've been waiting for to align with Amazon or Netflix since they've made out like bandits during this.

They already bent ATT the wrong way talking about the Sunday Ticket on a streamer but if they take the games to a streamer and allow fans to access that instead of nets, the NFL is basically feeding the beast that's been feeding on net TV but I think some of those owners already know that is the future.

Everyone knows the next NFL deal will be with a streaming service.
It's not even a hidden secret.
It's common knowledge.

And it will be massive and world-wide.

If Amazon wants to separate out Prime video from it's default Prime offering getting the NFL does that.
If Netflix or Hulu wants to claim the top streaming spot and become able to charge a cable like rate for the service, this does that.

And Amazon and Netflix are not hurting right now. Netflix stock rreache dit;s all-time high of an insane ~434 dollars April ~15th/16th.
Amazon's all-time high was april ~30th and is large enough I'd get carpal just typing it.

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

Sydla

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bandfan

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Oz-of-Cowboy-Country

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rags747

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jazzcat22

RamziD

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dguinta1

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