Capocolypse Now: 2021 salary cap could decrease by 40-85M

[Doggin94it]

I'm not going to quote the whole article because the underlying math doesn't really matter and they actually quoted the wrong section of the CBA that makes this a reality, but it is a reality. The 2021 salary cap will be adjusted to account for the loss of revenue in 2020, and that loss could be very significant:

Quote

None of this takes into account the loss of national revenues but even if that is a small number (and there will likely be some loss) my guess is that you are looking at the cap to drop anywhere from $40 million from projections to $85 million from projections for 2021. This would assume that 2021 growth remains steady pace from where 2020 was expected to be. We had projected a cap of about $215 million in 2021 based on players share increasing from 47 to 48% so anywhere from $130 million to $175 million. $130 million is where the NFL was in 2014 to give some context to it.

https://overthecap.com/what-could-happen-to-the-salary-cap-in-2021/

A couple of takeaways from this. First, it helps explain why so many players had to take 1 year deals this offseason. There is just way too much uncertainty about what the 2021 cap will be for teams to allocate meaningful guaranteed dollars to that year for anyone but core players. There was nothing that teams could do about their players who already had contracts running through 2021, but there was no way anyone was signing a slot corner or a guy like Jordan Jenkins to real money for 2021 with that looming on the horizon. 

Second, it's worth taking a look at which teams are conceivably in a position to survive that type of cap adjustment. Take a look at the effect of cap space table  in the opening post of this thread

 

I'm not sure whether or not that includes rollover money from unused 2020 cap space or not, but if it does, the teams at the bottom of the table are going to be seriously screwed even with a low end adjustment, and completely incapable of surviving if it's an 80+M hit. If that happens, I'd expect the NFL and union to agree to break the 2020 true-up over a period of years rather than taking it all in just a single year. Either way, the teams that have the most cap space, up at the top of the table, are going to have a serious competitive advantage next offseason, way more than usual. 

Third, there is effectively no way that any NFL team is handing out a big dollar contract to any remaining free agent at this point. Logan Ryan, Clowney, Griffin, all of those guys? They are well and truly effed. Other than perhaps the Colts and the Patriots, there isn't a team in the NFL that is in the position to hand out an even high seven figures contract right now, been on a one-year deal. As long as it is uncertain whether there will be a a massive Revenue loss in 2020, teams need to save all of the rollover space that they can for 2021 so that they can survive the worst case scenario if it happens

This stuff is truly unprecedented and how it plays out is going to have a big impact on the future of the Jets and the rest of the NFL

[Augustiniak]

sux to be jamal.

[playtowinthegame]

Jamal looking at his contract extension after COVID-19....to the right is @T0mShane.

[Doggin94it]

16 minutes ago, Augustiniak said:

sux to be jamal.

Yes and no. I'm not sure this really affects his extension hopes, since they could actually structure in extension that lowered his 2021 cap number if they wanted to

[Irish Jet]

Mahomes will be getting 75% of the Chiefs cap at this rate.

[playtowinthegame]

5 minutes ago, Irish Jet said:

Mahomes will be getting 75% of the Chiefs cap at this rate.

His extension is certainly going to be effected by the CORONAVIRUS PANDEMIC. Everyone in the NFL is going to make significantly less in the near future.

[Doggin94it]

One other impact of this: If there really is a big hit to the salary cap, teams will be effectively prevented from franchising any free agents, since the percentage of the available cap that a franchise player would take up would be absolutely crazy. Ngoukwe, Jones, Dupree, Judon - any of those guys who don't sign long-term deals with their current teams will absolutely be free to the highest bidder come 2021

[LAD_Brooklyn]

How exactly would TV revenue take a loss?

[flgreen]

If the virus shuts down portions of the season, and there are major financial losses, Next year should be really interesting.  

AT this point, can see two options.  Owners bite the bullet, leave the cap in place, and lose billions across the league.  Or there will be dozens of star FA's let lose.

Suspect it will be the latter  

[section314]

Will this mean contracting the roster size?  Will the NFLPA allow it?

[viffer]

9 minutes ago, LAD_Brooklyn said:

How exactly would TV revenue take a loss?

The season will go on as scheduled. The stadiums may be empty at the beginning. This should actually drive the TV revenue up; with the total lack of sports all year, coupled with no one able to go to the stadiums, TV viewership will skyrocket. The NFL should be negotiating with the networks for higher revenue this year in exchange for playing the full schedule (after all, if the NFL cuts the schedule, it will be a huge hit on the networks).

[rangerous]

i feel bad but not that bad.  these guys aren't hurting for money and relative to what their fans and owners get it stays about the same.  it's just the new reality and it was a long time coming.

[Doggin94it]

13 minutes ago, flgreen said:

If the virus shuts down portions of the season, and there is major financial losses, Next year should be really interesting.  

AT this point, can see two options.  Owners bite the bullet, leave the cap in place, and lose billions across the league.  Or there will be dozens of star FA's led lose.

Suspect it will be the latter  

There's no way the owners don't insist on the true up. I think what it looks like in practice depends on how much the loss is. If it's only 40M, then it'll be brutal for some teams at the bottom of the cap space table, but survivable, and they'll just reduce the cap accordingly. 

85M would be a wipeout few teams could survive, from a cap perspective, and I think the league and the players would come to an agreement to break the true up across multiple years. Basically, reducing the cap a total of 85 million, plus interest, over 2 to 5 years, instead of doing it all in a single year

9 minutes ago, section314 said:

Will this mean contracting the roster size?  Will the NFLPA allow it?

No. Never. 

19 minutes ago, LAD_Brooklyn said:

How exactly would TV revenue take a loss?

If the NFL chooses to cancel games, I would imagine that their contracts with the TV providers would say that the providers don't pay for games that aren't aired

[Jetster]

8 minutes ago, viffer said:

The season will go on as scheduled. The stadiums may be empty at the beginning. This should actually drive the TV revenue up; with the total lack of sports all year, coupled with no one able to go to the stadiums, TV viewership will skyrocket. The NFL should be negotiating with the networks for higher revenue this year in exchange for playing the full schedule (after all, if the NFL cuts the schedule, it will be a huge hit on the networks).

NFL virtual draft was most viewed EVER. NFL on TV with Covid 19? RECORD BREAKING VIEWERSHIP!!!

[RutgersJetFan]

The teams are owned by ******* billionaires but yes Jamal Adams is the bad guy

[RutgersJetFan]

Jerry Jones conducted his draft from his Lex Luthor yacht but yes player salaries are clearly what are going to have to be cut down on. 

[viffer]

3 minutes ago, RutgersJetFan said:

Jerry Jones conducted his draft from his Lex Luthor yacht but yes player salaries are clearly what are going to have to be cut down on. 

I hate Jerry Jones but he is a billionaire because of his business dealings outside of the NFL. Most NFL players would be working at Walmart if it weren't for the NFL. Big difference.

[Doggin94it]

8 minutes ago, Jetster said:

NFL virtual draft was most viewed EVER. NFL on TV with Covid 19? RECORD BREAKING VIEWERSHIP!!!

Viewership for anything not on the NFL Network has exactly zero impact on the NFL's immediate finances, since it is already locked into long-term deals is that it cannot renegotiate based on viewership numbers this year

[GreenFish]

29 minutes ago, LAD_Brooklyn said:

How exactly would TV revenue take a loss?

Right. If anything TV revenue should go up. The draft has a huge spike in viewers.

[Doggin94it]

1 minute ago, viffer said:

I hate Jerry Jones but he is a billionaire because of his business dealings outside of the NFL. Most NFL players would be working at Walmart if it weren't for the NFL. Big difference.

Yes, absolutely, this is a not at all bigoted or insulting post about a group of individuals who you know absolutely nothing about

[Doggin94it]

10 minutes ago, GreenFish said:

Right. If anything TV revenue should go up. The draft has a huge spike in viewers.

You only think that because you don't understand how TV contracts work. The NFL gets a set yearly fee from the networks to broadcast the games. If viewership goes up the networks make more money when they sell ads based on those numbers the next year, it doesn't impact NFL revenue at all, unless and until it comes time for the next round of contract negotiations with the networks, and by that point it won't impact much because it will be averaged in

[Sout0266]

7 minutes ago, viffer said:

I hate Jerry Jones but he is a billionaire because of his business dealings outside of the NFL. Most NFL players would be working at Walmart if it weren't for the NFL. Big difference.

Jones was very successful before the nfl, but nowhere close to being a billionaire. He sold his company in the late 80’s for less than 200 million, then leveraged everything he had to buy the cowboys a couple years later. 

[slats]

We can look a little bit at their math: 

"If you lost all local revenues you would probably be looking at an $80 million loss in cap space while a 40% loss would result in a $31 million drop in cap room."

So an $80M loss in cap space would mean that the league played an entire season to empty stadiums. It's all speculation at this point, but that definitely feels a bit doomsday-ish. A 40% loss would mean that the cap would go from a projected $215M in 2021 to about $185M, or about $15M less than it is this year. That's still pretty grim, but salvageable. There'd be have to be some belt-tightening, but with the four year cycle the CBA runs on, teams could borrow from future years expecting the 2022 cap to be back up well over $220M. This isn't like a lockout or strike, fans won't hold this against the league and will come back the following year in bigger numbers than ever. 

[Wonderboy]

1 hour ago, playtowinthegame said:

Jamal looking at his contract extension after COVID-19....to the right is @T0mShane.

Jamal's haircut looks cool but he needs to trim those eyebrows.

[RutgersJetFan]

28 minutes ago, viffer said:

I hate Jerry Jones but he is a billionaire because of his business dealings outside of the NFL. Most NFL players would be working at Walmart if it weren't for the NFL. Big difference.

Hello latently racist man welcome to JetNation 

[RutgersJetFan]

4 minutes ago, slats said:

We can look a little bit at their math: 

"If you lost all local revenues you would probably be looking at an $80 million loss in cap space while a 40% loss would result in a $31 million drop in cap room."

So an $80M loss in cap space would mean that the league played an entire season to empty stadiums. It's all speculation at this point, but that definitely feels a bit doomsday-ish. A 40% loss would mean that the cap would go from a projected $215M in 2021 to about $185M, or about $15M less than it is this year. That's still pretty grim, but salvageable. There'd be have to be some belt-tightening, but with the four year cycle the CBA runs on, teams could borrow from future years expecting the 2022 cap to be back up well over $220M. This isn't like a lockout or strike, fans won't hold this against the league and will come back the following year in bigger numbers than ever. 

They literally could borrow from the guys that own the teams.

[varjet]

31 minutes ago, viffer said:

I hate Jerry Jones but he is a billionaire because of his business dealings outside of the NFL. Most NFL players would be working at Walmart if it weren't for the NFL. Big difference.

I don't know if that is exactly right. 

JJ was a successful guy who bought the Cowboys relatively cheap.  He built the brand up and the value of the team.  He developed a spectacular stadium used for other purposes. 

If I had to guess, he used the value of the Cowboys as collateral to back other investments, and he and his family use the Cowboys as a networking/marketing tool.  

The Cowboys are not a sideline for the Jones'-they are a very important part of their overall business.  

[The Crusher]

38 minutes ago, RutgersJetFan said:

Jerry Jones conducted his draft from his Lex Luthor yacht but yes player salaries are clearly what are going to have to be cut down on. 

HAHA. I was thinking top tier Bond Villian, but that works. 

[bla bla bla]

1 hour ago, Doggin94it said:

Yes and no. I'm not sure this really affects his extension hopes, since they could actually structure in extension that lowered his 2021 cap number if they wanted to

Yea but if we reset the cap back to 2014 levels the highest paid safety was only getting $10m per year. It could feasibly take 5+ years to have the cap get that high again. 

[Aaron Hernandez]

9 minutes ago, RutgersJetFan said:

Hello latently racist man welcome to JetNation 

Is it really racist to say a large chunk of NFL players would have sh*t jobs without the NFL? I mean it's cause and effect but you never have to learn to be responsible if you can run a 4.3 and catch a ball. Some people are born rich some people are ultra athletic and get paid cause us normal people want them to win us a silly trophy one time in our lives 

[bla bla bla]

1 hour ago, flgreen said:

If the virus shuts down portions of the season, and there are major financial losses, Next year should be really interesting.  

AT this point, can see two options.  Owners bite the bullet, leave the cap in place, and lose billions across the league.  Or there will be dozens of star FA's let lose.

Suspect it will be the latter  

Was just coming here to say this, we are going to see a ton of star players hit the open market if the cap drops like this.

[bla bla bla]

4 minutes ago, Aaron Hernandez said:

Is it really racist to say a large chunk of NFL players would have sh*t jobs without the NFL? I mean it's cause and effect but you never have to learn to be responsible if you can run a 4.3 and catch a ball. Some people are born rich some people are ultra athletic and get paid cause us normal people want them to win us a silly trophy one time in our lives 

Kurt Warner was literally bagging groceries, I see no issue with your argument. Most these players were pushed through college and never earned a degree and some that did may not have actually received the education part of it because they were pushed through their classes so the schools could make money on their talent.

[jetstream23]

15 minutes ago, Wonderboy said:

Jamal's haircut looks cool but he needs to trim those eyebrows.

 

I think you meant, "that eyebrow"

 

1 hour ago, playtowinthegame said:

Jamal looking at his contract extension after COVID-19....to the right is @T0mShane.

 

[nycdan]

It would be prudent for the NFL and NFLPA to agree to push some 2020 cap into 2021.  Perhaps hold the cap flat or just let it rise by $5MM per team this year and push the rest to offset the inevitable decrease in 2021.  But I can't see the NFLPA agreeing to that because players who retire after this season would get screwed (very slightly but the optics would be bad).  

[RutgersJetFan]

9 minutes ago, Aaron Hernandez said:

Is it really racist to say a large chunk of NFL players would have sh*t jobs without the NFL? I mean it's cause and effect but you never have to learn to be responsible if you can run a 4.3 and catch a ball. Some people are born rich some people are ultra athletic and get paid cause us normal people want them to win us a silly trophy one time in our lives 

aaron hernandez spitting hot fiyah