Could the salary cap go DOWN in 2021?

[CGI_Ram]

Well, this could get interesting...


View: https://twitter.com/mysportsupdate/status/1257751159781167105?s=21


“As the COVID-19 pandemic continues with no obvious end in sight, the NFL could be dealing with financial issues in the coming year. On the My Sports Update Football Podcast, NFL insider Adam Schefter said one possibility could spell trouble for top players like Mahomes.

Schefter said that teams are concerned that if the pandemic continues long enough, games will need to be played without a crowd. That means substantially less revenue for teams, and the current collective bargaining agreement outlines how salary caps are set based on revenue. Schefter says that means the salary cap could take a $30 million to $80 million dip in 2021, which could affect contract negotiations in a significant way for the league's top players.”

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[Fatboy]

In a word no. -- the Fatboy

 

[kurtfaulk]

.

what?

if the nfl plays their games the cap will go up like it usually has. that's the first i've heard of the crowd attendances counting towards the cap. i thought it was the tv/digital revenue only.

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[kurtfaulk]

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Local revenue, which consists of ticket sales, concessions, and corporate sponsors, is earned by the teams themselves.

National revenue consists of TV deals along with merchandising and licensing deals, which are negotiated at the national level by the NFL itself. This money is then divided evenly between the 32 teams regardless of individual performance.

How the NFL Makes Money

The NFL makes money in many ways, but its TV deals are by far its most lucrative revenue stream and will likely continue to be.

www.investopedia.com

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[kurtfaulk]

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schefter talking out of his arse again.

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[Mackeyser]

While it may not directly affect the cap as that is determined by a formula which mostly consists of tv and licensing monies, I can see less monied owners spending the minimum to reduce losses in the case that they are playing without fans. As it stands, there is a chance that either games are moved if some places allow live events and some don’t or some games are played without fans in attendance.

 

[dang]

I gotta believe there will be limited to no crowds allowed at NFL games this year. I also gotta believe TV viewership will be at an all time high as fans will be starving for diversions.

 

[kurtfaulk]

I gotta believe there will be limited to no crowds allowed at NFL games this year. I also gotta believe TV viewership will be at an all time high as fans will be starving for diversions.

correct. tv numbers should be record breaking.

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[CGI_Ram]

correct. tv numbers should be record breaking.

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With Network contracts done, that mostly benefits the Networks?

 

[AZRams]

Is there a way for the league to offer an exception that keeps teams from being hamstrung in that scenario?

 

[CGI_Ram]

NFL reportedly considering asking players to take salary cuts if revenue drops due to coronavirus

Would NFL players agree to a pay cut in 2020?

www.cbssports.com

NFL reportedly considering asking players to take salary cuts if revenue drops due to coronavirus

NFL revenues could take a serious hit in 2020 if fans aren't allowed to attend games, and if that happens, it would have some dramatic financial ramifications around the league. The biggest consequence of having zero fans in attendance is that the salary cap for 2021 would likely go down, which would have huge implications for all 32 teams.

To prevent the cap from going down dramatically, the NFL is already starting the process of putting together a few financial contingency plans and one of those plans would apparently involve asking the players to take a pay cut. According to NFL.com, one proposal being tossed around is that players would take a pay cut for their base salary in 2020 to make up for the lost revenues that are expected to come in 2021.

The salary cap, which is $198.2 million for 2020, is calculated based on expected revenue, and if that expected revenue goes down for a year -- like it could in 2020 -- then the cap would go down with it the following year. The NFL's ultimate goal is to save money now so that the salary cap can still go up in 2021, or at worst, stay the same.

According to the league's website, negotiations haven't even started on the potential cutbacks, so there's been no reaction from the NFLPA yet. Of course, you have to think the players will be absolutely against this. The NFL is a year-by-year league, and there are a lot of players who will be on the field in 2020 who won't make a roster in 2021. For fringe guys like that, there would be no reason to give up money now to help future revenues that they wouldn't ever see.

Also, for players looking to cash-in big right now, this could complicate their negotiation. A potentially lower salary cap number could have a major impact on current contract negotiations, which is notable because several big extensions will likely be signed this offseason with guys like Dak Prescott, Deshaun Watson and Patrick Mahomes set to possibly get a deal done. For instance, if Mahomes got a deal with $40 million per year, that's something that Chiefs could handle if the cap goes up in 2021.

However, if the cap went down to say, $170 million, due to the revenue drop that would come with no fans, all the sudden, Mahomes would be eating up 23.5% of their cap space, and the Chiefs would then have to sign their other 52 players with only 76.5% of their cap space available.

One other possibility the NFL is considering to make up for lost revenue is to borrow from future TV deals. With the TV contracts coming up following the 2021 season (ESPN) and 2022 season (CBS, NBC, Fox), the NFL could look to get those deals done early and then use the rights money to make sure the 2021 cap doesn't go down. For instance, if the TV deal was going to cause the cap to go up by $15 million in 2022, the NFL could borrow against that and have the cap go up $7.5 million in 2021 and $7.5 million in 2022 to prevent it from going down.

Whatever is going to happen is likely going to happen soon. The NFL doesn't want to get into the kind of labor strife that other leagues -- like major league baseball -- are currently dealing with, so the league is shooting to have a contingency plan in place and agreed to with the NFLPA by the time the regular season starts.

 

[Zodi]

I see a canceled season before I see players taking a paycut.

 

[dieterbrock]

I see a canceled season before I see players taking a paycut.

That would be quite the paycut then

 

[dieterbrock]

Its not the majority of income when the stadiums are full. However when the expenses are the same and the gate/concessions/promotional income is eliminated, or at least drastically reduced, that lack of income becomes a major loss.
Its definitely a problem for the owners

 

[OldSchool]

I don't see it going down in 2021 but remaining flat is a possibility. A lot depends on how things turnout when they start and if the owners and players can work together on things. These aren't owner or players only issues, they'll get theirs the only people who will get screwed over in the end are the fans.

Baseball with the way those 2 are at odds I see having much more issues going forward.

 

[Zodi]

That would be quite the paycut then

Yeah, it'd be crazy for the NFL to have a strike. I don't think its happened before.

I dont see either happening. But asking players to play for ~20% of their contract? Good luck.

 

[MadGoat]

Is there a way for the league to offer an exception that keeps teams from being hamstrung in that scenario?

Yes. In fact there is language in the CBA directing the league and the players to work to avoid that situation in the event of a massive revenue drop. The problem is the exact mechanism will be argued by both sides. One solution is "borrowing" cap from future years, but that will significantly flatten the cap for years and stagnate salaries. The players aren't going to like that, but an impasse could result in an actual cap reduction, resulting in cuts and a minuscule free agent market.

 

[HE WITH HORNS]

Look what is happening with baseball right now, the owners will lose money for every game played in an empty stadium, and the players want their full salaries. Might not even have a season at this rate.

 

[bluecoconuts]

Only if the owners are greedy and the players are stupid.

When you're hording more money than the rest of us, you shouldn't be looking to us to cut our pay, owners should cut their own.