Packers Huddle

A conference call of NFL team owners on Friday included a resolution to start training camps as scheduled next week provided that the players approve the current economic proposal on the table.

The league and the NFLPA have been discussing a number of issues related to playing the 2020 season amid the COVID-19 pandemic. One of the biggest has been how the projected drop in revenue this year will impact the salary cap because owners were initially looking to take the hit immediately while players wanted it spread out over the life of the current Collective Bargaining Agreement.

Mark Maske of the Washington Post reports that the current proposal would leave this year’s cap at $198.2 million for this year and set a minimum of $175 million for the 2021 season. Any further shortfall would come off the caps through the 2024 season.

The NFL has new broadcast deals to work out in the coming years as their current pacts are up in 2022. The revenue generated by those pacts will also be part of the equation determining how the cap looks in those seasons.

The NFL salary cap usually grows each year. Next year, it’s expected to shrink. And some teams are going to feel the pinch.

Friday’s agreement between the NFL and NFL Players Association guarantees that the salary cap won’t drop any lower than $175 million, but even that represents a significant drop from this year’s $198.2 million cap. Until a few months ago, most teams were expecting the 2021 cap to grow to somewhere in the neighborhood of $215 million, which means teams have $40 million less to spend next year than they were planning for when they were negotiating many of their players’ long-term contracts.

According to OverTheCap.com, eight teams are already over a 2021 cap of $175 million with the players they have signed through next year, before they sign a single free agent next year or draft any rookies. That group includes the Eagles, Saints, Falcons, Chiefs, Steelers, Bears, Raiders and Vikings.

Those teams will have to cut players and restructure contracts just to get under the cap before the start of the league year. Teams cut players and restructure contracts every year, but next year it will prove to be particularly difficult for teams that had a lot of players under long-term contracts that were negotiated before anyone dreamed that a pandemic would cause the cap to plummet.

It’s still possible that the cap won’t shrink as much as everyone expects. New revenue is coming this year from additional playoff games, and the NFL and NFLPA may reach further agreements that keep the cap from dropping as much as expected. But right now, some teams have to be concerned about the salary cap crunch they’re facing in 2021.

go pak go wrote: ↑

25 Jul 2020 08:15

Kenny Clark and Aaron Jone's value just dropped.

And I don't know how fair that is that players drafted in 2016 - 2018 will have to essentially carry this burden of revenue decline while guys like Devante Adams and Aaron Rodgers get paid their normal and full rate.

I would have to imagine that would cause quite a rift in the locker room. I know it would !@#$ me off.

YoHoChecko wrote: ↑

25 Jul 2020 10:06

Yikes. It's a start, but still genuinely pretty dumb. I'd set the minimum at a flat cap for 2021 and dead any revenue losses that occur over 2022-2024, something like 40%, 35%, 25% so that the losses hit when the tv money comes in and the whole thing is smoothed out.

A shrinking cap is bad for business from any perspective aside from owners' cash flow, and if they can't float a few dozen million for a single season they shouldn't be owners.

TheSkeptic wrote: ↑

25 Jul 2020 11:26

YoHoChecko wrote: ↑

25 Jul 2020 10:06

Yikes. It's a start, but still genuinely pretty dumb. I'd set the minimum at a flat cap for 2021 and dead any revenue losses that occur over 2022-2024, something like 40%, 35%, 25% so that the losses hit when the tv money comes in and the whole thing is smoothed out.

A shrinking cap is bad for business from any perspective aside from owners' cash flow, and if they can't float a few dozen million for a single season they shouldn't be owners.

TV revenue is going to drop too. Take a look at what Samsung is saying about future TV sales. Why would the networks pay more to the NFL if fewer people are watching? Why would advertisers pay more when their sales just went through the floor?

YoHoChecko wrote: ↑

25 Jul 2020 12:24

TheSkeptic wrote: ↑

25 Jul 2020 11:26

YoHoChecko wrote: ↑

25 Jul 2020 10:06

Yikes. It's a start, but still genuinely pretty dumb. I'd set the minimum at a flat cap for 2021 and dead any revenue losses that occur over 2022-2024, something like 40%, 35%, 25% so that the losses hit when the tv money comes in and the whole thing is smoothed out.

A shrinking cap is bad for business from any perspective aside from owners' cash flow, and if they can't float a few dozen million for a single season they shouldn't be owners.

TV revenue is going to drop too. Take a look at what Samsung is saying about future TV sales. Why would the networks pay more to the NFL if fewer people are watching? Why would advertisers pay more when their sales just went through the floor?

You are wrong. The new TV deal will be much larger than the previous TV deal. I've talked about this elsewhere. I've quoted some articles. There is absolutely zero reason or indication to expect declining TV deal revenues at this stage. Viewership is up significantly over the level six years ago when the prior deals were negotiated. Any contrary opinion is fear mongering or based in mostly politically motivated misinformation about the supposed decline of the league.