Will cap go down? That will depend on negotiations between league and union

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It’s easy to assume that the 2021 salary cap will go down, given the likelihood that revenues for 2020 will dip, through the loss of ticket revenues, in-stadium concession and merchandise sales, and possibly the cancellation of local sponsorships and ad buys by companies that either can’t or won’t make the investment at a time of financial uncertainty. But the reality is that the 2021 salary cap will come from one and only one thing: The negotiations between the NFL and NFL Players Association.

Even if revenues go down in 2020, the salary cap need not go down in 2021. Plenty of teams won’t want it to go down, because they won’t want to cut key players in order to get under the lowered spending limit. And the union clearly will want the cap to be as high as possible, in order to prevent a rash of players from being released and then ultimately signing new contracts, possibly for much less than they were due to make.

The ultimate number will be limited only by the creativity of the negotiators. With new TV deals on the horizon, and with those deals expected to be massive if/when a new normal arrives, the league and union could essentially borrow against future salary caps, smoothing the 2021 shortfall over multiple seasons, reducing the short-term pain for both the teams and the players.

The two sides also could tweak the formula that determines the spending minimum, giving teams that truly land in financial predicaments the flexibility to spend less for a year or two while allowing cash-rich franchises to spend to the cap. And given the ability of teams to carry over unused cap space at will, the two sides could agree that unused cap dollars definitely will be carried over — and that future spending minimums will be determined based on the sum of the current year’s cap plus the carryover amount.

The bottom line is that the league and the union will figure this out. And they have reason to figure it out. Most teams want to be able to spend money on players in order to be as competitive as possible, and the union wants to have as much money as possible available, presumably without causing any teams to go bankrupt.

No teams will go bankrupt, by the way. They’ll find a way to play 256 regular-season games and 13 postseason games, they’ll earn the TV money that goes along with it, and by 2021 things should be much better.

Besides, the teams are worth multiple billions of dollars, each. As baseball agent Scott Boras recently said, it’s hard to reconcile privatizing profits and socializing losses. That will be a relevant consideration when the time comes for the league and the union to negotiate next year’s salary cap.

22 responses to “Will cap go down? That will depend on negotiations between league and union

  1. This isn’t rocket surgery. Determine the loss of revenue caused by playing in empty stadiums will cause, and reduce the cap and all contracts by that percent. If it turns out that fans con=me back, make an end of season adjustment to the cap and pay the pro-rated difference to the players.

  2. There won’t be a “new normal”. We will go back to normal at some point once the fear mongering stops and people grow tired of the bs.

  3. I’m not worried about teams going bankrupt, i’m worried about the Eagles who were 50 mill over the cap next year before this discussion even started.

    Hopefully they can find a way to not gut the team in 2021 but i am not seeing where they can save money. All of their contracts are backloaded and guaranteed. Not much relief available in cutting expensive veterans.

  4. If theres any remote possibility whatsoever of the cap coming down, then Dallas can’t even THINK about paying Dak 35 mill per year… They ought to swap tags and show him what his true market value is once and for all.

  5. Until fans can pack the stadiums again,… the players should take a small paycut to allow the owners and the league to cope with the loss of revenue.
    This is no different than the dilemma bars and restaurant owners patrons are dealing with.
    Everyone has to suck it up a little bit.
    This is no time for greed. Make it work,.. and try to get along.
    I hate it when multi millionaires start whining about money,…. that goes for both sides..

  6. Another reason why not to break the bank on Dak. If the cap does go down for One year then No teams should be forced to gut or cut 2 or 3 of their best players for the sake of One season. Dallas is what 12 mil under the cap right now? Thats with Daks 34 mil tag in place? So Dak has almost no choice but to play under the tag this year IF the cap is just going to go down. If Dalton can play $20 below his market value as does Tom Brady Then explain why Average Dak CANT play while getting paid OVER his market value. Seriously can not believe Dak is turning down $35 mil per with Over $100 mil guaranteed . In what make believe world does he live in? Tired of hearing all these media people saying PAY THE MAN! bro it takes 2 sides to get a deal done, Dallas is trying to already OVER PAY THE MAN, dude just keeps refusing the offer.

  7. the players should take a small paycut to allow the owners and the league to cope with the loss of revenue.

    Some sports leagues have already set a model for this. Pretty much every F1 team from the driver on down have taken pay cuts. I know come college coaches have also taken pay cuts. Don’t really follow soccer but I want to say I heard of some of those players also taking pay cuts. As far as the NFL goes I’m sure some of the megastars can afford but I’m not sure about the low man on the totem pole making league minimum.

  8. If games are still played but stadiums are empty; the league will more than make it up in TV advertising revenue; which will explode.

    Also, don’t they have reserves; like we’re all supposed to have savings for a rainy day?!

    The measure shouldn’t be that they’re able to keep making embarrassing amounts of money, hand over fist, in 2020/2021; it should be can they operate efficiently, adjust their model and live with less embarrassing wealth of profits!

    The owners should manage that from their pockets; not players who essentially are only guaranteed their signing bonus!

  9. Seems like the NFL should use this as leverage to get back the portions of guaranteed contracts that will be paid to players sitting at home if the season is delayed. Players did not want to budge on that even though common sense dictates they should.
    Now, the NFL can say—give back that money and we’ll fold it into the 2021 cap.

    Fair is fair. Get paid for work you actually do. You know, like in the REAL world.

  10. The cap should be cut in half. And the owners should insist that there is a max amount paid to any player. No qb should be making 30 + million per year.

  11. For all of you saying the players should take a cut…how does that make sense? That’s the whole point of a contract for pay. They didn’t sign on to get paid as a percentage of the salary cap. When the salary cap goes up do the players get a percentage increase?

    So if you’re a player into the 2nd year of a 5 year contract that would count a lot of dead cap money if you were cut….why accept a pay cut? But if you’re in the 2nd to last year of your contract…sure absolutely renegotiate…cause you’re likely to be cut next year…if that’s something you don’t want to happen.

  12. If they play the games the players shouldn’t be asked to take a pay cut. Unless their contracts stipulate otherwise the owners should honor the contracts they signed regardless of economic conditions. The cap will likely go down in 2021 and the NFL has several options. Among them lower the cap but offer exceptions to teams with existing contracts.

    Obviously if the games aren’t played the players don’t get paid. That saved money should be applied to next year’s cap.

    Another prudent move would be to allow teams to declare cap carryover 15 days before the last scheduled game. 20 teams have $10 million plus, all but 6 teams have at least $5 million.

  13. If they adhere to the social distancing rules that means they can only sit fans in about every 4th seat so they’ll lose 75% of their revenue from games, to put it into perspective that’s over a $4bil decline, so sure the players should take some of the hit and if they elect not to then let them sit out and see how that works out for them! Remember in the end it is the fans that are paying all of the bills, not the owners and less fans means less revenue and everyone should give up a little, if the players don’t want to give up anything then just cancel the season.

    Remember this, the salary cap is based on revenue and that’s what they sign these players based on expected revenue coming in, so YES the players should take some of that hit of lost revenue. This was an unforseen circumstance that no one saw coming so for the players to get paid in full when the revenue’s will be at the lowest levels in decades it isn’t fair to anyone but the players. Just like any business take some of the hit or don’t work at all.

    And for those saying the cap saved from this season should be applied to next season = NO, absolutely not! So if they don’t play a game you’re saying the cap next year should be over $400mil, NO WAY!

    BTW my question isn’t about the players as I don’t feel one bit sorry for them as they’ve become far more greedy than the owners, my question is if they adhere to social distancing guidelines how do they determine who gets to go to games since they’ll only be able to seat people in every 4th seat? And will they refund the others or just keep their money and apply it to next years increased ticket prices? Those are the questions that will determine if I even watch a game this year, not if the greedy players have to take a cut!

  14. sbc2556 says:
    May 16, 2020 at 1:26 pm
    If games are still played but stadiums are empty; the league will more than make it up in TV advertising revenue; which will explode.
    _____________________________

    Damn that must be some good smoke! They won’t just “make up” around $5BIL of lost ticket, concession and memorabilia sales, first off the TV stations are the ones that make the money off of the ad sales, it’s the way they make money off of giving the NFL these huge TV deals, the NFL doesn’t see a dime of that money they only get what the TV contract says they’ll get and if they cancel any games that should go down!

    You people that act like the ticket sales don’t mean much are outta’ your minds, the sales of tickets, concessions and jersey’s make up about 1/2 of the total revenue the NFL makes yearly or about $7BIL and you don’t just “MAKE THAT UP”!

  15. Simple answer, take the reductions of what the cap would have been and amortize the reduction against future revenues evenly over the remainder of cba which lowers future caps (vs what they would have otherwise been) but over 9 years. Say the cap would have dropped by 40 million in 2021, keep it as is and offset that 40 million to reduce the cap by 4.44 million each year from 2022-2030.

    It’s a relatively simple solution that doesn’t cause mass interruptions in the game. Owners pay more now and players get paid less over the next 10 years.

  16. Other than a scam or fraud this article doesn’t make a lot of sense. The negotiations have already happened. The players get x% of revenue after any agreed expenses are set aside. That percentage is what the basis of the salary cap comes from. There is a floor and a ceiling that teams must meet when paying their players and there is a rolling accumulation effect over a few seasons to ensure no team low-balls the players to pay less than agreed. All of this stuff has been THE main focus of each of the last few CBAs. When you start monkeying around with the finances in “creative” ways, you will eventually have a problem. That’s how teams wind up in “cap hell” and now the league and players seem to want to play that game on the league level. In the end, the ones who will get stuck with any type of loss are the fans. I say, leave it alone and experience the full effect of the CBA and maybe both sides will be a little wiser next time.

  17. They should reduce the cap by the projected decrease in revenue, then proportionately reduce the cut of the owners and all players with salaries above the median. All players with salaries below the median are paid in full. If there’s a shortfall, take that proportionately out of the pay of the first two groups.

    The stars and the owners can suck it up for one season.

  18. If the 2020 season is cancelled altogether, It is hard to see how the 2021 salary cap will not go down. It is simply too risky to play and even practice if the epidemic remains uncontrolled and test kits remain in short supply.

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