2021 cap/cba question

[scotscheese]

So, theres been a lot of mention about the cap going down for 2021 to around $175million.

my thoughts/query on this is that;
the CBA seems to be highly geared to protect veteran players on bigger contracts. cutting/releasing players on low contracts isn't going to help teams as they will still need replaced on rosters by players with pretty similar contract numbers, so my thinking is that higher paid players are more likely to either be cut/released or to have their contracts negotiated down.

I can't believe the players will like this nor the NFLPA, and thus could cause issues with implementing any decrease in cap

and would there be anything in the CBA to counter any decrease in cap?

 

[jon]

I don't see it going down. Next year's revenue will be back to normal.

 

[Poppa San]

I don't see it going down. Next year's revenue will be back to normal.

This year's isn't though.

 

[Mondio]

I don't think anything is going back to normal next year. We haven't come remotely close to paying as a society for the decisions that were made back in April. We printed a few trillion extra dollars and distributed them. hardly any hurt as gone around yet. These dominos are barely hanging on and once they start, watch out.

 

[HardRightEdge]

So, theres been a lot of mention about the cap going down for 2021 to around $175million.

my thoughts/query on this is that;
the CBA seems to be highly geared to protect veteran players on bigger contracts. cutting/releasing players on low contracts isn't going to help teams as they will still need replaced on rosters by players with pretty similar contract numbers, so my thinking is that higher paid players are more likely to either be cut/released or to have their contracts negotiated down.

I can't believe the players will like this nor the NFLPA, and thus could cause issues with implementing any decrease in cap

and would there be anything in the CBA to counter any decrease in cap?

The $175 mil cap for 2021 is the minimum per agreement with the NFLPA to amend the CBA, so there's no issue there. That number is just a placeholder until the losses are totaled up and there is greater revenue visibility going forward. Everything is negotiable.

If all goes well and Covid-19 is largely in the rearview mirror before free agency begins next March, a big if, I would expect another CBA renegotiation whereby the cap over a few years remains flat or increases slightly until the losses are recouped. Expect a 17 game 2021 season which is an owner option negotiated into the CBA to help with that.

If there is not an effective vaccine that is widely distributed and widely accepted, I couldn't venture a guess where that might lead.

This year's isn't though.

Right. If you ballpark TV revenue at about 60% of what would have been the total and toss in a generous 10% from all other sources instead of the expected 40%, that's a 30% revenue haircut. With the players getting around 50% of revenue, by all rights the cap this year should have been around $140 mil. Back of the envelope, the players have $60 mil that must be given back sometime.

But that's just revenue. From the owner's negotiating position there's the matter of profit. If revenue is 70% of what it would have been in the absence of Covid-19, the % of lost profit is much greater than 30%. All the overhead is unchanged--non-player salaries, debt service, stadium maintenance, utilites, insurance, yada, yada. Further, owners view profit in it's entirety including ancillary ventures, like the Titletown District, which we can assume are taking bigger hits than the football operation. Most if not all franchises will be taking a net loss this year, some pretty substantial.

Again, in short, the minimum $175 mil 2021 cap is just a placeholder until there is some kind of visibility. I would not, however, expect anything more than a token increase in the 2021 cap over 2020 under the best of circumstances.

 

[Pokerbrat2000]

I think something else that the NFL, as well as other professional sports are going to want to be very aware of is the Public Relations side of how this all shakes out. That being, how will it be perceived to see Billionaire owners and millionaire players squabbling over a huge pot of money, while many across the World, including their fans, are unemployed, unable to pay rent and seriously wondering if homelessness is in their future. If I was working for the NFL in PR, this would be something I would pay a lot of attention to and make sure we as an organization acknowledge and gave back to the people who made us the successful business that we are.

 

[elcid]

I think something else that the NFL, as well as other professional sports are going to want to be very aware of is the Public Relations side of how this all shakes out. That being, how will it be perceived to see Billionaire owners and millionaire players squabbling over a huge pot of money, while many across the World, including their fans, are unemployed, unable to pay rent and seriously wondering if homelessness is in their future. If I was working for the NFL in PR, this would be something I would pay a lot of attention to and make sure we as an organization acknowledge and gave back to the people who made us the successful business that we are.

Couldn't have said it better myself

 

[scotscheese]

The $175 mil cap for 2021 is the minimum per agreement with the NFLPA to amend the CBA, so there's no issue there. That number is just a placeholder until the losses are totaled up and there is greater revenue visibility going forward. Everything is negotiable.

If all goes well and Covid-19 is largely in the rearview mirror before free agency begins next March, a big if, I would expect another CBA renegotiation whereby the cap over a few years remains flat or increases slightly until the losses are recouped. Expect a 17 game 2021 season which in an owner option negotiated into the CBA to help with that to help with that.

If there is not an effective vaccine that is widely distributed and widely accepted, I couldn't venture a guess where that might lead.

Right. If you ballpark TV revenue at about 60% of what would have been the total and toss in a generous 10% from all other sources instead of the expected 40%, that's a 30% revenue haircut. With the players getting around 50% of revenue, by all rights the cap this year should have been around $140 mil. Back of the envelope, the players have $60 mil that must be given back sometime.

But that's just revenue. From the owner's negotiating position there's the matter of profit. If revenue is 70% of what it would have been in the absence of Covid-19, the % of lost profit is much greater than 30%. All the of the overhead is unchanged--non-player salaries, debt service, stadium maintenance, utilites, insurance, yada, yada. Further, owners view profit in it's entirety including ancillary ventures, like the Titletown District, which we can assume are taking bigger hits than the football operation. Most if not all franchises will be taking a net loss this year, some pretty substantial.

Again, in short, the minimum $175 mil 2021 cap is just a placeholder until there is some kind of visibility. I would not, however, expect anything more than a token increase in the 2021 cap over 2020 under the best of circumstances.

thank you sir

 

[Deleted member 6794]

I can't believe the players will like this nor the NFLPA, and thus could cause issues with implementing any decrease in cap

and would there be anything in the CBA to counter any decrease in cap?

The salary cap is calculated based on revenue made across the league. If the NFL and its players association wouldn't have agreed to spread out the losses caused by COVID-19 this year over four seasons as well as set a minimum cap of $175 million for the 2021 season it would drop even more dramatically.

I don't see it going down. Next year's revenue will be back to normal.

The cap will definitely decrease for the 2021 season and with the losses caused this season being spread out over the next four years it won't increase significantly over this year's level for quite some time.

 

[HardRightEdge]

That being, how will it be perceived to see Billionaire owners and millionaire players squabbling over a huge pot of money, while many across the World, including their fans, are unemployed, unable to pay rent and seriously wondering if homelessness is in their future.

It didn't seem to matter much in the throes of the financial crisis with a very contentious CBA negotiation in progress from early 2010. Unemployment was running higher than it is now through 2011.

https://www.bls.gov/charts/employment-situation/civilian-unemployment-rate.htm

Goodell was threatening a lockout if an agreement was not reached by March 1, 2011. Where we will be by 3/1/2021 on the eve of free agency when another renegotiation will need to be reached to set the cap 2021 cannot be predicted. If stadiums are open in September 2011, a reasonable prediction is that they will come and the folks who cannot afford it will watch on TV, like always. Football is at the core of American culture, cutting across all demographics, geographies and political persuasions, more so than liberal democracy it would seem, so long as nobody sticks a clenched fist in the air.

 

[Deleted member 6794]

Goodell was threatening a lockout if an agreement was not reached by March 1, 2011. Where we will be by 3/1/2021 on the eve of free agency when another renegotiation will need to be reached to set the cap 2021 cannot be predicted.

The NFL and its players association already agreed to a deal on how to move forward with the cap next season.

 

[PikeBadger]

Timing is everything. The guys that signed big, long term contracts or extensions in 2019 or 2020 are in good shape for a couple of years most likely. Those that are unfortunate enough to have contracts expiring this year or next, for the most part, aren’t going to reap the benefits their predecessors did. Average vet players with more than 5 or 6 years NFL service are screwed imo as they can be replaced more easily by a 3 year service guy.

 

[HardRightEdge]

The NFL and its players association already agreed to a deal on how to move forward with the cap next season.

The CBA was renegotiated once. Expect that to happen again once this year's losses are totaled up and there is better visibility with respect to 2021 revenue. Yes, you do hear an echo.

It is best to view the $175 mil minimum 2021 cap as a placeholder subject to renegotiation.

 

[Deleted member 6794]

Timing is everything. The guys that signed big, long term contracts or extensions in 2019 or 2020 are in good shape for a couple of years most likely.

It's possible that those veterans end up getting released if the move results in cap savings as well.

The CBA was renegotiated once. Expect that to happen again once this year's losses are totaled up and there is better visibility with respect to 2021 revenue. Yes, you do hear an echo.

It is best to view the $175 mil minimum 2021 cap as a placeholder subject to renegotiation.

As far as I know the league and players association already agreed on how the cap will set up for next year based on revenue created this season.

It's guaranteed it won't drop below $175 million.

 

[PikeBadger]

It's possible that those veterans end up getting released if the move results in cap savings as well.

Most of these recent large contracts came with crazy big (imo) guaranteed money which generally means that cap savings aren’t realized until deep into those contracts.

 

[HardRightEdge]

It's possible that those veterans end up getting released if the move results in cap savings as well.

As far as I know the league and players association already agreed on how the cap will set up for next year based on revenue created this season.

It's guaranteed it won't drop below $175 million.

It is guaranteed until it isn't. It's not a matter of just 2020 revenue. It's a matter of visibility into 2021. If Covid-19 is raging come February I'd expect matters to be revisited. I could see the start of the league year, free agency and the draft deferred until there is better visibility depending on circumstances.

While the current deal might have a cap scale for 2021 from $175 mil on up based on 2020 revenues under an assumption of 2021 being back to normal, that could easily go awry.

Just cutting vets is extremely problematic and will roil the sport, not that it won't happen.

Average team cap space for 2021 with players currently under contract assuming a $176 mil cap would average $9 mil per team. Nobody has 53 players already under contract for 2021 since nobody in the 2021 free agent class is counted. The draft alone, if the rookie salary scale holds, would suck up most if not all of that $9 mil average cap.

The Packers, for example, have 39 players under contract for next season with a cap cost of $180 mil. Yoiu're looking at about $195 mil just to sign the draft class and get to a full roster and PS while signing no free agents of any kind, so you'd have to find $20 mil in cap savings from cuts. This is not particularly unique.

So, you'd have the bizarre circumstance where a bunch of star players must be cut across the league, with the league on average having little cap to sign them back except at rock bottom prices.

You're left with a picture where only about a half dozen teams have the cap space to compete for a whole mess of good players, a much larger group than in typical free agency periods:

https://overthecap.com/salary-cap-space/

Of course those teams with high cap space have to be examined to see what their free agent class looks like to see what they need to build up a roster.

Some have other considerations like making money. Jacksonville under normal circumstances appears to be around a break even team at best. They go play in London to make a buck and this year their red ink is bound to be flowing like the Mississippi. I would not expect them to spend up to the cap limit to take a shot at the prize.

Billionaires with lots of cap space may like their profit (or minimizing losses) more than winning at any cost. It's how they got to be billiaires in the first place. You could see high value free agents sitting out or getting paid well under guys sitting behind them on the bench. There will be a lot of anger, among players and football operations people with some potential transfer of power to the few teams with cap and willingness to spend it.

What the salary cap might be in 2021 is hardly worth discussing beyond the variables that go into it.

 

[PikeBadger]

It is guaranteed until it isn't. It's not a matter of just 2020 revenue. It's a matter of visibility into 2021. If Covid-19 is raging come February I'd expect matters to be revisited. I could see the start of the league year, free agency and the draft deferred until there is better visibility depending on circumstances.

While the current deal might have a cap scale for 2021 from $175 mil on up based on 2020 revenues under an assumption of 20% attendance baseline and 2021 back to normal, that go awry.

Just cutting vets is extremely problematic and will roil the sport, not that it won't happen.

Average team cap space for 2021 with players currently under contract assuming a $176 mil cap would average $9 mil per team. Nobody has 53 players already under contract for 2021 since nobody in the 2021 free agent class is counted. The draft alone, if the rookie salary scale holds, would suck up most if not all of that $9 mil average cap.

The Packers, for example, have 39 players under contract for next season with a cap cost of $180 mil. Yoiu're looking at about $195 mil just to sign the draft class and get to a full roster and PS while signing no free agents of any kind. This is not particularly unique.

So, you'd have the bizarre circumstance where a bunch of star players having to be cut across the league, with the league on average having little cap to sign them back except at rock bottom prices.

You're left with a picture where only about a half dozen teams have the cap space to compete for a whole mess of good players, a much larger group than in typical free agency periods:

https://overthecap.com/salary-cap-space/

Of course those teams with high cap space have to be examined to see what their free agent class looks like to see what they need to do to build up a roster.

Some have other considerations like making money. Jacksonville under normal circumstances appears to be around a break even team at best. They go play in London to make a buck and this year their red ink is bound to be flowing like the Mississippi.

Billionaires with lots of cap space may like their profit (or minimizing losses) more than winning at any cost. It's how they got to be billiaires in the first place. You could see high value free agents sitting out or getting paid well under guys sitting behind them on the bench. There will be a lot of anger and some potential transfer of power to teams with cap and willingness to spend it.

What the salary cap might be in 2021 is hardly worth discussing beyond the variables that go into it.

It’s going to be very interesting watching all this play out and it’s effect on team chemistries. It could be very difficult projecting teams level of success. I’m looking forward to it.

 

[HardRightEdge]

Most of these recent large contracts came with crazy big (imo) guaranteed money which generally means that cap savings aren’t realized until deep into those contracts.

Most big contracts have the guaranteed money loaded into the early years of the contract, primarily in the signing bonus, sometimes in salary. Your most likely candidates to be cut to gain cap savings are typically second contract guys going into year 3 or 4 where the salary amounts tend to be high and half or more of the cap overhang from the signing bonus has been burned off.

Also, you have starters and stars coming off their rookie deals, entering what would ordinarily be their second contract payday or the big one year cap hit of a franchise tag. You can hand those guys even bigger signing bonuses and smaller salaries to keep the 2021 cap hit down, but that has it's own price in up front cash adding to possibly more red ink, and a bigger cap overhang in the out years of the contract which adds to player performance/injury risk.

So, ballpark, assuming a $176 mil cap, look at the Packers 2021 cap savings column in the following table and pick out $20 mil for cuts keeping in mind no FAs of any kind would be signed. Or cut more than $20 mil if you want to sign a FA:

https://overthecap.com/salary-cap/green-bay-packers/

Of course you could deliver some ultimatums. Take a pay cut or you get thrown into the free agent morass where there's not much money to go around. Or you could just cut everybody who's savings exceeds the anticipated value of an alternative in a free agent buyers market for all times.

The possibilities are simply too numerous, too many variables unkown, to venture a guess.

 

[HardRightEdge]

It’s going to be very interesting watching all this play out and it’s effect on team chemistries. It could be very difficult projecting teams level of success. I’m looking forward to it.

About the only visibility I have if the 2021 cap comes in at $176 mil cap, a big if, is that Hoodie will be sitting on $68 mil in cap space with 49 players currently under contract.

This is a guy who has a history of turning over vets likes most GMs change their underwear and manufacturing chemisty out of thin air.

Under that scenario, I'd expect him to have a field day scarfing up vets on the cheap if Kraft lets him spend it.

With next to no visibility regarding what 2021 will bring, lets live for today where a win would be big, big thing. Mostly, as always, I'd like to see a well played football game. As a lifelong Braves fan from their and my days in Milwakee, there's another game this evening that falls in my "live for today" universe.

 

[Pokerbrat2000]

The possibilities are simply too numerous, too many variables unkown, to venture a guess.

Wagner and Kirksey are the 2 obvious starting points. Then its a matter of as you said, reworking contracts with some of the top tier guys. 2021 might be a good year to work on Davante's new deal and reduce his cap hit in the process.

I don't have any doubt that Ball will be able to work with and be very creative with the lower cap, as will most teams. Each team is probably going to have to approach next year by asking themselves "Do we have a good enough team right now, that we can mortgage some of our future to compete for a SB in 2021?" or "Is our team one that should not push contracts out, take our lumps in 2021 on the field and stockpile our cap for 2022 and beyond?" I think the Packers will fall into category #1 due to how good they are so far and Rodgers age.

 

[HardRightEdge]

Wagner and Kirksey are the 2 obvious starting points. Then its a matter of as you said, reworking contracts with some of the top tier guys. 2021 might be a good year to work on Davante's new deal and reduce his cap hit in the process.

I forgot to account for cap carryover, about $7.5 mil. While that doesn't change the big picture all that much I figure I should mention it before the Captain checks the math.