NFL Aiming For Salary Cap Solution By Training Camp

For weeks, the NFL and NFLPA have discussed how to manage the 2021 salary cap ahead of a COVID-19-altered season that will feature either no fans at stadiums or lesser attendance.

While the salary cap number is not determined until March, the league is shooting to solve this dilemma by the time training camps open, Jeremy Fowler of ESPN.com tweets. This would do well to help teams manage their longer-term situations.

The uncertainty regarding the 2021 cap number has caused extension talks to stall around the league. It is expected a full-on fanless season would result in at least $3 billion in losses, putting a cap freefall of beyond $50MM in play. The NFL is not prepared to implement a universal attendance policy, however, creating a muddled setup in which some teams may be able to play in front of spectators while others do not. This stands to complicate cap talks.

Given the severe ramifications of a steep salary cap drop — and the fact the cap has only fallen once (by barely $3MM, in 2011) in its 27-year history — it should be expected the sides will avoid this scenario.

Borrowing from projected future earnings remains in play to address this, Fowler adds. This has been a presumed solution for weeks now. The new CBA, which includes two new playoff games beginning this year and a 17-game season potentially starting in 2021, was rumored to be set to produce cap spikes that could push the NFL’s salary ceiling (currently at $188MM) beyond $260MM by 2023. If the NFL borrows against some of that expected revenue, the recently anticipated cap growth will be slowed. A June report indicated both the NFL and NFLPA expect a 2021 cap decrease or cap plateau to be a one-year blip. It will be interesting to see how the sides manage that.

A solution occurring before camp would likely trigger more late-summer extensions than usual, but the group of franchise- and transition-tagged players may be trapped in limbo.

Teams must extend their tagged performers by July 15. Training camps are not expected to be open for veterans until July 28. Of course, it is possible the NFL could push back the mid-July tag deadline like it delayed the 2020 league year (twice) due to the CBA talks. Clarity regarding the 2021 cap would increase the chances of franchise-tagged players signing extensions.

Photo courtesy of USA Today Sports Images.

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16 comments on “NFL Aiming For Salary Cap Solution By Training Camp

    • jkoms57

      Lmao cant eve get guys to accept an 18million dollar tag..

      You think they’re going to settle for like 4mil etc.?

  1. Ak185

    I find it hard to believe that the NFL, between all of the owners and organization itself, can’t cover $3 billion in losses. Not sure how reducing cap results in enough money to provide significant relief here. There are going to be losses if the season runs-at a certain point these measures taken are self-defeating.

    Players negotiating deals this year will get hurt in the long term. For instance, a team might only offer $6 million instead of, say, $10 million, because they’re planning for a reduced cap. Why not provide some sort of flat reduction league-wide for all contracts if they’re going to be reduced, instead of just reducing the cap but keeping current contracts the same? So you negotiate as normal, but with the knowledge that every contract this year has, say, a 10% reduction? Players won’t like it, rightfully so, but this way everything otherwise works as normal mathematically and the reality simply is that there will be less money this year no matter what. The way it sounds now, just a flat cap reduction, would hurt anyone negotiating a deal this year. Probably not the best idea, but the way it sounds doesn’t seem equitable to me as is.

    Of course, if I were the NFL, I would set aside money next year to cover the reduced pay to players out of fairness, but that’s just me.

    • crosseyedlemon

      Not surprisingly, the owners want the players to take the economic hit but the NFLPA has already gone on record as stating they will oppose unilateral contract cuts. I suspect the $3 billion loss figure is exaggerated but regardless, the NFL could reduce it’s expenses considerably by eliminating the enormous amount of bloat that permeates all aspects of the league. The league spends considerable amounts of money simply creating propaganda that is designed to protect and enhance their public image.

      • emac22

        Don’t they teach math in school anymore?

        The owners get a percentage and the players get a percentage.

        When the total profit goes down the amount to each side goes down.

        Both sides take a big hit and the only real difference is that the players can never lose money while the owners losses have no cap at all.

        Talking about this stuff when you have no clue how it works doesn’t help anything. it makes you and the players look like fools who don’t know anything about math or business.

        • crosseyedlemon

          The players get around 45% of revenue but they get nothing from equity gained from investment of profits which has resulted in the NFL being worth about $92 billion. Most do not not lose money as long as they are under contract but the average career is only about 5 years.

    • emac22

      :) This is sort of cute but why is it so tragic that a player earns less than expected? Why should the owners should literally give them extra money?

      We have lines at food banks in this country that are miles long and you’re view of fairness is for the rich people in this country to make sure other rich people don’t have to take any pay cuts at all?

      That’s nuts!

      • Ak185

        You fundamentally misunderstood everything we posted and you use smiley faces while typing up insults. I think you should research contract law and re-read what I said.

        Also, that’s Econ, not mathematics. I probably did the same in that as you did in grammar, though, so I could be wrong.

        • emac22

          I generally laugh at people when I’m insulting them.

          It’s math when you can’t add, subtract or even recognize how numbers relate to each other. Economics reflects a recognition of how money works that’s years beyond the issues in your post.

          I know more about contract law than you ever will and your statement that the owners want the players to take the contract hit still represents a gross misrepresentation at best. Adding that the union said they wouldn’t agree to unilateral contract cuts doesn’t make anything else you said valid.

          • Ak185

            You certainly know a lot at being mad over an opinion that never mentioned you, and I doubt you know much more than that. Go pick a fight on a YouTube video or something, I’m done with you.

      • crosseyedlemon

        Nobody is forcing Jerry Jones, Robert Kraft or others to be NFL owners. They could say the player salaries are too outrageous and give up ownership but they won’t for the simple reason that the NFL labor force is making them ridiculous profits.

  2. RockHauler

    As with any business and a collectively bargain agreement, some years the business makes money, some years they lose money. The NFLPA agreed to a new CBA that runs through 2030, and provides that 48% of the gross revenue is placed into a salary cap ceiling. The risk you take is that for some reason the revenue goes down and therefore the cap goes down. But for years the revenue has gone up leading to increases in the Cap.
    For those looking to cash in on FA or extensions, it’s just poor timing for them. While I feel for these players it’s something their union bargained for and Will have to live with it. The teams that will be hurt the most are ones that gave out contracts that will eat up to 20-25% of the cap to one player. It’s going to be tough to field a competitive team next year. And if a team like Dallas gives Dak what he wants at $40m plus, or Kansas City extends Mahomes to the $40+m they are talking about those teams would be investing almost 30% into one player. Good luck with that. All in all a bad situation.

    • emac22

      Exactly!

      And before people complain about poor timing for the guys who have to settle for 10 mil a year instead of 20 lets feel bad for the guys who will never have an NFL career only because their timing was even worse.

  3. emac22

    I don’t understand how I can keep hearing about the borrow from future years theory as though these projections from before the pandemic are worth anything at all.

    Does anyone on the planet still think things are ever going to return to normal, let alone do it in a year?

    Revenue sharing means revenue sharing. That means you divide the money that comes in based on an agreed upon split.

    It does not mean ever increasing pools of money or that you can never lose.

    Not only is it totally unrealistic to expect a return to the past but it’s totally unrealistic to expect players in the future to accept less so that current players can make more than their share of revenue in a bad year. That’s before you get to the owners basically financing and taking all the risk that things do improve.

    BTW – Things can get worse. A lot worse. We had all better start realizing that before it’s too late.

    • crosseyedlemon

      The NFL is worth about $92 billion so I would assume that kind of equity would allow owners to easily acquire loans to handle a short term economic pullback. Covid has changed the world but sports will survive just as they did through a world war because fans have an addiction that isn’t going to end in the foreseeable future.

    • cka2nd

      It is, in fact, totally realistic “to expect players in the future to accept less so that current players can make more than their share of revenue in a bad year.”

      Unfortunately, we’ve got 40 years worth of labor relations demonstrating that union contracts will be signed that protect current workers in the short term at the expense of future workers, as the owners, demanding concessions at every turn, play plant against plant, workforce against workforce, and generation against generation. The result has been current workers choosing to protect their own self-interest over the interests of their replacements time and time again (hence, multiple tiers in pensions, health insurance plans and wage structures). Hell, the recent fight within the NFLPA over the CBA saw star players pitted against rank-and-file starters, journeymen and back-ups, with the league structuring the deal to appeal to the latter at the expense of the former.

      Whether you or I like it or not, there will be some deal made avoiding one-year across-the-board salary cuts for the players of 30, 40 or 50%. My guess is that the revenue losses will be spread out over two to four years, and hopefully include a degree of prorated and progressive cutting, with the lowest paid players taking the lowest percentage cuts.

      I think what everyone around the league is hoping is that the TV contracts, which a year ago looked like they might be in a bit of trouble due to soft ratings, will be stupendous directly as a result of the pandemic and its lockdowns. The ratings for any season this year, with or without fans in the stadiums, should be gangbusters, just like they were for the draft.

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