2021 NFL salary cap conundrum: Three major consequences of projected decrease

[HOUSE]

Complying with the NFL's salary cap from year to year is always a balancing act, and it's a job general managers and decision-makers don't take lightly, nor should they.

Right now, along with navigating a pandemic-impacted regular season, all 32 NFL organizations are preparing for perhaps the biggest challenge the salary cap has ever presented. Clubs are aware there will be a decrease in the cap number next year due to COVID-19 repercussions, but to what degree? That's still unknown, as there are estimates out there, but no official number from the league. All 32 teams must be below the cap number at the start of the new league year.

 

Challenges

 

1) Using the franchise tag will become more difficult.

 

2) Teams with less draft capital may be in for longer periods of hardship.

 

3) A major threat to veteran roster spots.

 

https://www.nfl.com/news/2021-nfl-salary-cap-conundrum-three-major-consequences-of-projected-decrease

Edited December 1, 2020 by HOUSE

[aristocrat]

i'm sure they will come to an agreement that doesn't lower it too much

[TroutDog]

8 minutes ago, aristocrat said:

i'm sure they will come to an agreement that doesn't lower it too much

This defeats the entire point of a salary cap. Not all teams have Pegula’s and Jones’ as owners. The cap will have to come down, it’s straight forward economics. 

[Big Turk]

They will likely do something that taps into future year salary cap increase projections to balance it out I am betting....maybe leave it flat for a period of time until the revenue increases past the point of the losses and then let it start going up again...

1 minute ago, TroutDog said:

This defeats the entire point of a salary cap. Not all teams have Pegula’s and Jones’ as owners. The cap will have to come down, it’s straight forward economics. 

 

The cap was designed to make it fair for all teams. How is it fair when some teams are able to have fans at the stadium and others are not? How it fair when some stadiums are at 25% capacity and others are at 10% or less? 

 

While much of this goes towards the cap, teams do get to keep club seats and booth revenue as well as concessions, etc.

 

I don't think the teams will allow the cap to have a huge dropoff due to circumstances far beyond anyone's control. Under normal circumstances you would be right. But these are far from normal circumstances.

[Kwai San]

Doomed.....not the Bills but good lord almighty the Aint's are HOSED!  I ma sure there are a few others that are going to be smacked...like Houston....

[Saxum]

Maybe no one will want Houston GM job and they will need to sign Bob - from Accountemps.

 

 

 

[Doc]

The Bills can clear almost $17M by cutting 3 players: Jefferson, Butler and Matakevich. 

[RoyBatty is alive]

1 hour ago, aristocrat said:

i'm sure they will come to an agreement that doesn't lower it too much

 

 

How?  Where is the $ going to come from?  

 

The finances of the NFL are not bullet /recession/covid proof.  This mentality that the salary cap can increase every year inexorably has been, imo, horribly flawed.  It took this year for it to be realized.

[Rc2catch]

It’ll be an interesting story to follow, and it should result in some extremely good veteran talent being released or traded on some teams. I see it as an opportunity for Buffalo to pounce and once again acquire an elite talent. I do feel we are in a position similar to last offseason that we can afford to move a 1st round pick to get an elite difference maker and I think 99% of the fan base would agree that would be a defensive end. 
As Doc pointed out above we have some options to free money up with a few easy releases on top of some expiring contracts. 
The Bears for example may be cleaning house and going into a full blown rebuild, they clearly would consider moving Mack in that scenario. I for one would gladly take on that contract for a 1st and 5th type combo. 
Until we commit to Allen big time we can take advantage of a situation like this with the salary cap and other teams hurting. 

[wjag]

Next year will separate the wheat from the chaff in GMs.   Figure those monster contracts given out to QBs this year will make things interesting next year for some of those GMs.  There are three teams, NYJ, JAX, CAR, with dead money north of 49M this year.  Ouch.   Imagine being an owner and paying that much money for guys no longer on your team.  Drops significantly starting next year.   Most teams under 10M.

Edited December 1, 2020 by wjag

[aristocrat]

34 minutes ago, RoyBatty is alive said:

 

 

How?  Where is the $ going to come from?  

 

The finances of the NFL are not bullet /recession/covid proof.  This mentality that the salary cap can increase every year inexorably has been, imo, horribly flawed.  It took this year for it to be realized.

 

well they were doing just fine until a global pandemic that hit.  They could borrow from future years perhaps.  They will go right back to printing money next year.  Remember they are set to start brining in gambling money as well so their model is just fine. 

[wvbillsfan]

I’d keep the cap flat for the next several years. 
Nfl and their owners already have the capital and assets to borrow money if needed. 
When the cap should rise keep it flat and recoup lost or borrowed money

[BuffaloBill]

1 hour ago, Doc said:

The Bills can clear almost $17M by cutting 3 players: Jefferson, Butler and Matakevich. 

 

The situation will likely lead to some surprising cuts across the NFL.

[Doc]

5 minutes ago, BuffaloBill said:

The situation will likely lead to some surprising cuts across the NFL.

Probably. But those three wouldn’t be.

[H2o]

6 minutes ago, BuffaloBill said:

 

The situation will likely lead to some surprising cuts across the NFL.

Absolutely. Just look at the teams listed from 23, down.

https://www.spotrac.com/nfl/cap/2021/

[costrovs]

I wouldn't be surprised if McBeane tries to trade Brown in the off season to help with the cap. The way Davis has been playing, and with Brown being injured, it makes sense.

Brown will have a 1.6M dead cap hit, and a savings of 8.15M.

[TroutDog]

3 hours ago, matter2003 said:

The cap was designed to make it fair for all teams. How is it fair when some teams are able to have fans at the stadium and others are not? How it fair when some stadiums are at 25% capacity and others are at 10% or less? 

 

While much of this goes towards the cap, teams do get to keep club seats and booth revenue as well as concessions, etc.

 

I don't think the teams will allow the cap to have a huge dropoff due to circumstances far beyond anyone's control. Under normal circumstances you would be right. But these are far from normal circumstances.

The sums of money for those numbers is minuscule in the big scheme of things. I don’t see how the cap does not drop. It won’t add up, financially speaking. 

[Nester]

3 minutes ago, H2o said:

Absolutely. Just look at the teams listed from 23, down.

https://www.spotrac.com/nfl/cap/2021/

Wow @ philly and Atlanta.

 

gonna be pain for years....

 

at least the saints win games..

[RoyBatty is alive]

48 minutes ago, wvbillsfan said:

I’d keep the cap flat for the next several years. 
Nfl and their owners already have the capital and assets to borrow money if needed. 
When the cap should rise keep it flat and recoup lost or borrowed money

 

You endanger the entire system when you start advocating  to borrow money when revenue starts declining.  One thing the NFL has largely done is struck parity, uber-rich owners can't buy a team like they can do in baseball.  Not all owners financial situations are the same, you start tacking on debt and if revenue doesnt accelerate, some owners are going to get in financial trouble.  There is no guarantee the cap will go up in the future, especially with the plight of the sports media with declining viewership and advancing technology.  Just look at the state of the mighty ESPN.

[Tuco]

A lot of people don't seem to realize, the deal has already been struck. There is no keeping it flat for a couple years.

 

The CBA covers this scenario. It says in the event of catastrophic (me paraphrasing but whatever) decrease in revenues due to something like a Pandemic, both sides will work it out. And they did. But the players are still going to get the same percentage of revenue they were always going to get.  And in the long run, that will be less for at least one year. Owners get less, players get less.

 

This year's cap is based on this year's projected revenue, just like every year. But it was projected before the pandemic. Every year the cap is figured on projected revenue and then an adjustment is made to reflect any gains or shortfalls from the previous year in relation to its projection.  So the huge shortfall in revenue this year will be reflected in next year's cap.  The players could have agreed to lower this year's cap, but they weren't interested, so they kicked the can. The agreement was next year's cap will be no lower than $175 million, even if it's supposed to be less than that (the owners were pushing for $165M because they know how much they're losing). And any amount it's supposed to be  below $175 will be absorbed by reducing the remaining shortfall from the total cap in the subsequent years. I'm not just making this number up. It was agreed to via an amended CBA back in September.

 

Could they just amend the CBA again? Sure. But don't think for a moment the owners are going to give a bigger percentage away. And the serious loss of revenue this year is going to be reflected in next year's $175 million cap. That cap has already been negotiated. The only real issue is how much it will affect the cap in the years after that.