NFL salary cap could drop by $70 million per team next season?

[Sydla]

Think about this from the owners perspective. Of the ~50% in revenues that they keep, most of that goes in to fixed costs for stadiums, facilities, coaches, front office, etc. The pie is shrinking, but those costs aren’t. They are already hit harder than the players due to the lost revenues.

The CBA dictates that the cap is based on revenues. That’s how the business stays open - the biggest cost (players salaries) has to go down, and in this case it is written into the CBA. If the NFLPA wants to borrow money from future years to keep the cap higher than the massive cuts the CBA requires, it’s going to require a concession from the players. That means the owners are going to have to get salaries lower as well.

I don’t see where anyone is talking about this yet (just getting though 2020 is the objective right now). But make no mistake, it’s coming before the 2021 season. The owners have to stay afloat and service debt like any other business. Some of them are bound to be in financial trouble with what’s happening in the broader economy.

This notion of the owners having to stay "afloat" is a bit preposterous. The NFL is a cash generating machine, they are sitting on a pile of cash. They could cut the cap a little bit and then either use cash reserves or even some sort of financing to cover a year. Once the NFL is back to normal, they will generate more than sufficient cash flow to cover any debts they took on as part of this situation.

I tend to always side with the owners when it comes to the CBA, etc. But them crying poor all of a sudden because of a lost revenue year is pretty funny. They have ways to make this work without totally gutting the players side of this if they want. But they probably will squeeze the players for every penny they can get.

 

[jazzcat22]

The feasibility of cutting $70MM from the cap seems tough. That would mean teams would have to cut key veteran players for example. The Cowboys would have to think about cutting a Tyron Smith or a Zach Martin and trim elsewhere just to get under the cap.

They will probably implement some sort of soft cap, like the NBA, if they still do that. Maybe borrow against future years. So they do not have to cut players like the ones you mentioned.
$70 million would be a very tough pill to swallow for that huge of a hit.
However some teams may prepare now to get under that cap.

Such as Dallas can cut Crawford. And not sign anyone to replace him. And still be about where they are talent wise. Save cap space this year, and it gets rolled over to next year as part of that $70 million, if it still works that way.

 

[MRV52]

If that rumor is true this will be Dak’s last season as a Cowboy. No way they can afford to pay him $38 million if the salary cap is $120 million. That’s 31.6% of the cap for just one player.

Another case of classic mismanagement by Jerry Jones.

Like another team can afford to sign him to 38 million. LOL won't happen. Dak made a huge mistake should have signed. So happy with the front office that they didn't cave in to a player that is not even close to the level of Mahomes but wanted the same type of money.

 

[Mr_437]

billionares didnt get to be that way by always losing large amounts of money

Agreed, yet they surely understand setbacks. If things were to go back similarly to before those TV contracts are going thru the roof, and the money they lost should be an afterthought.

 

[38 Special]

This notion of the owners having to stay "afloat" is a bit preposterous. The NFL is a cash generating machine, they are sitting on a pile of cash. They could cut the cap a little bit and then either use cash reserves or even some sort of financing to cover a year. Once the NFL is back to normal, they will generate more than sufficient cash flow to cover any debts they took on as part of this situation.

I tend to always side with the owners when it comes to the CBA, etc. But them crying poor all of a sudden because of a lost revenue year is pretty funny. They have ways to make this work without totally gutting the players side of this if they want. But they probably will squeeze the players for every penny they can get.

I don’t have an opinion one way or another about the financial situation for these owners. They’ve refused to open the books for a reason, but without that information, we’re all guessing. A year of lost revenue would bankrupt most businesses, but most businesses probably aren’t as successful as the NFL. Ultimately, we’re talking about a group of 32 different situations - some are probably leveraged up to their eyeballs, and some are rolling in cash.

My only point in all of this is that with so much loss baked into the pie that’s already in the oven, you’d be fooling yourself to think that the league will just artificially inflate the salary cap without demanding the players give back as well.

 

[HungryLion]

Doubt contracts already done would be effected but sure hurts a guy about to be a free agent next year or two if it stayed the same 2-3 years
Teams won’t have as much money to spend which could cause lots of one year deals or players not getting as much
Market value would go down

I don’t think most teams could even field a team of 53 if the cap was suddenly dropped 70 million.

 

[JJHLH1]

Like another team can afford to sign him to 38 million. LOL won't happen. Dak made a huge mistake should have signed. So happy with the front office that they didn't cave in to a player that is not even close to the level of Mahomes but wanted the same type of money.

I don’t think that’s the way it works. If the Cowboys can’t afford to pay Dak $38 million under the tag next year then he becomes a free agent and can sign with any team at whatever deal he and his agent can negotiate.

I think there are 3 options:
- Dak is tagged again in 2021 and is paid $38 million
- The Cowboys sign Dak to a long term deal
- Neither of the above occur and Dak is free to sign with whatever team he wants

I don’t consider a trade as being a possibility because why would any team give up draft picks when they may be able to get Dak next year when he’s a free agent without having to give up any.

Jerry blundered by not signing Dak immediately after the 2018 season.

 

[ShortRound]

If they start the season, the players get paid. If I'm an owner, I cancel 2020, cut my losses. I'm sure the players will appreciate their jobs more than ever. No play, no pay!

ah ok. So all the player tweeting about safety etc. today... is a set up for the upcoming fight about whose fault it was the season got canceled?

there has to be an angle to what’s going on

 

[dckid]

NFLPA head suggests that salary cap could drop by $70 million next season





Lindsay Jones
@bylindsayhjones
·
Jul 17, 2020
Replying to @bylindsayhjones
DeMaurice Smith: "We are all trying to get to the right decision more so than getting to the fast decision."




Lindsay Jones
@bylindsayhjones
DeMaurice Smith said there are estimates that each team could lose $70 million in 2020, which could mean a 2021 salary cap of around $120M.


As the NFL looks to start its 2020 season on time in less than two months, there’s some major financial components to it all amid the ongoing pandemic.

We’re seeing somewhat of a split between the players and league as it relates to how salary structures will work during a 2020 season that likely won’t seen fans in attendance.

https://sportsnaut.com/2020/07/nfl-salary-cap-could-drop-by-70-million-per-team-next-season/

This is posturing on both sides. They could easily take that 70 million shortfall and divide it by the 11 year CBA extension.
They will not kill the golden goose for 70 million dollar one year charge.

 

[Ranching]

ah ok. So all the player tweeting about safety etc. today... is a set up for the upcoming fight about whose fault it was the season got canceled?

there has to be an angle to what’s going on

I'm saying that if I'm an owner and they don't want to play, cancel the season. The owners lose more in the long run. Players can give up a years salary if they don't feel safe. I'm glad our medical personnel and grocery store workers aren't doing that.

 

[Cowboysheelsreds053]

Crawford will still be here no mater what.

LOL

 

[Whirlwin]

Bye Bye Dak. No huge contract for you.

That’s why signing the franchise tag was a homerun

 

[Hoofbite]

You make it sound really simple… They are going to lose a ton of revenue this year… The players will feel that just like the owner will.

What's difficult about it? The NFL and NFLPA can just agree to balancing the cap over the span of a number of years. Any owner that can't work with a prorated cap reduction probably shouldn't have every last cent to their name tied up in a football franchise.

 

[Hoofbite]

There isn't a chance in hell that the NFL salary cap is immediately reduced by over 1/3rd. It would be a deathblow to the NFLPA to allow that to happen.

 

[conner01]

I don’t think most teams could even field a team of 53 if the cap was suddenly dropped 70 million.

I agree
I think they have a plan but that plan could mean a steady cap for 2-3 years
Most long term deals were done assuming a growing cap
That not happening could cause a few issues for sure

 

[jterrell]

Think about this from the owners perspective. Of the ~50% in revenues that they keep, most of that goes in to fixed costs for stadiums, facilities, coaches, front office, etc. The pie is shrinking, but those costs aren’t. They are already hit harder than the players due to the lost revenues.

The CBA dictates that the cap is based on revenues. That’s how the business stays open - the biggest cost (players salaries) has to go down, and in this case it is written into the CBA. If the NFLPA wants to borrow money from future years to keep the cap higher than the massive cuts the CBA requires, it’s going to require a concession from the players. That means the owners are going to have to get salaries lower as well.

I don’t see where anyone is talking about this yet (just getting though 2020 is the objective right now). But make no mistake, it’s coming before the 2021 season. The owners have to stay afloat and service debt like any other business. Some of them are bound to be in financial trouble with what’s happening in the broader economy.

Doesn't matter.
An owner isn't going to forego making 100M this year to make 0 just because they've usually made 300M.
Costs obviously go down if stadiums are empty.

Owners would be eligible for massive gov't loans if they lost money in COVID related business circumstances, players are not.

It is entirely possible 1 or 2 owners are badly financially impacted by this but those guys are even more motivated to make the 100M this year.
but Forbes reports billionaires incomes are actually going up during this pandemic, small business are the ones being crushed.... as per usual in downturns.

Most NFL owners like the league itself are too big to fail.