The NFL and NFL Players Association are about to agree on a set of health and safety protocols for the upcoming season to deal with the coronavirus. Beyond that, there is still the question of how to pay everyone.
The NFL is going to lose revenue as several teams have already announced that they will have no fans in games this year. The deficit projections range from $ 2 billion to $ 5.5 billion, with multiple NFLPA and league sources I’ve spoken to using $ 4 billion as a job estimate. The new NFL collective bargaining agreement, which was agreed in March, includes a formula that adjusts the salary cap annually based on income from the previous year, meaning that if income is very low, the cap number is 2021. It will also be, unless the league and the NFLPA can reach an agreement to override that provision.
“Some estimates indicate it could be $ 70 million per club as an impact on player cost,” NFLPA chief executive DeMaurice Smith said by phone last week. “That means that next year’s salary cap could be around $ 120 million.”
Teams and players don’t want that. This year’s salary cap is $ 198.2 million per team, up to $ 10 million last season, plus $ 40 million per team in player benefits. The salary cap has increased at least $ 10 million each year since 2012, and headquarters have become used to negotiating deals assuming future growth. Dropping the cap by tens of millions of dollars would have a dramatic impact on teams’ ability to build their rosters and almost certainly cause players to lose jobs. The NFL and NFLPA have recently been discussing ways to avoid that outcome.
“The fundamental question our leadership is grappling with is whether we have a world where we stick to Option A, and whether there is a significant drop in the limit next year, or if we discover something that ensures that doesn’t happen and it’s best for all of our members, “Smith told me.
The second option proposed by Smith is known as “softening” the salary cap. The term became popular in sports speech in 2015 when the NBA and NBAPA were negotiating how to handle a massive influx in revenue from the new television deals. The players wanted this new money increase to be reflected in the salary cap immediately; The owners wanted to see that happen smoothly. (Players finally won, the limit increased $ 24 million from 2015 to 2016.) And so a new sports lingo was born.
Saying that all the cap needs is a little smoothing makes it seem too easy. It is not a Zen garden or a Maine Coon kitten coming from the rain with its disheveled fur; Solving this problem will take more than sanding some rough edges. It has become an essential skill for headquarters to adapt and take advantage of the ever-increasing limit. If this season’s revenue deficit is close to expectations, planning for 2021 will require a new strategy.
The initial NFL proposal to the NFLPA involved keeping 35 percent of players’ wages for 2020 in custody as a way to avoid gutting the 2021 limit. According to an NFLPA source, the NFL proposal included the calculation of total losses at the end of the year and, if less than 35 percent, reduce players to a check for the difference. If the losses ended more than that, the drop in the 2021 limit would still be much less significant. It was not a start for the players.
“Basically,” NFLPA executive Don Davis told the players, “we told them to kick rocks.”
Gamers would prefer to compensate for the loss of income by borrowing from future years, especially those beyond 2022, when new TV offerings are expected to increase income. NFLPA’s initial counterproposal to the NFL involved keeping this year’s cap as it is and extending the cap on revenue loss from 2022 to 2030, a wish of NFLPA President JC Tretter, a center for Cleveland Browns, which is also described in a letter to agents dispatched Wednesday and obtained by the NFL Network.
“If we had our preference, we would never want players this year, and to some extent next year, to unfairly bear the brunt of a massive decline in football revenue,” Smith told me. “They are at the greatest risk by going back to work right now.”
That’s the bottom line: Players want losses to be felt gradually over time, rather than those who risk playing this coming season bearing the brunt of projected losses. The league’s initial proposal would make players shoulder their share of losses more immediately.
The CBA entitles players to about 48 percent of the league’s revenue through the salary cap and benefits. That percentage does not change even if the total amount does. The question essentially becomes whether the owners will grant players a line of credit and for how long. There is good reason to believe that the two sides will find a compromise. A precipitous drop to the limit would be terrible for players, but it would also be bad for teams.
The teams that would have the hardest time if the cap dropped from $ 50 to $ 70 million next year are the ones with the most money already committed in 2021, especially those with limited flexibility in contractual structures to push some of those commitments in the future.
The Eagles currently have $ 267.3 million league leaders committed to the 2021 limit, while the Saints rank second with $ 250.1 million. The Saints could be in a tougher shape, as the way they’ve structured many of their players’ contracts limits the team’s ability to continue to gain space. If Drew Brees retires after this season, leaving a future cap hit, they’ll have additional cap stress.
For some of the Eagles’ big contracts, like those of quarterback Carson Wentz and defensive tackle Fletcher Cox, the team has the option to convert large amounts of salary into signing bonuses, which it can prorate over the next few years to decrease. salary. Cap strokes. Philadelphia has other players, like wide receivers DeSean Jackson and Alshon Jeffrey, who could pass and remove millions from the cap pretty quickly.
According to Jason Fitzgerald of Over the Cap, a website dedicated to analyzing the NFL’s salary cap, mid-level veterans are the players who would suffer the most from a big drop in the cap. The stars are too valuable, and the rookies have their contracts established and guaranteed in the CBA; veteran boys who make a few million a year and are beyond the guarantees in their contracts are left vulnerable.
“What’s going to happen, I think, is that you’re going to see a big shakeup of the charts,” Fitzgerald told me. “You will see these types of veterans who would normally make the cut by making, say, $ 4 to $ 5 million, they will cut themselves and they will probably collect elsewhere, but they will probably have to collect quite a lot for the minimum wage.”
Other players who would lose are those who enter free agency. History tells us that teams will find money for quarterbacks and big names, outstanding free agents like 49ers defensive end Joey Bosa and Ravens offensive tackle Ronnie Stanley should be fine, even if the big deals they take a little longer to materialize.
However, there could be less appetite for someone like 49ers cornerback Richard Sherman, who still plays at a high level but is 32 years old. Xavier Rhodes, the former All-Pro cornerback who signed a one-year contract with the Colts this offseason in hopes of a comeback and a bigger contract next offseason, is another example of a player who could be worse off.
“The bank will not be there next year,” said Fitzgerald. “You’re going to end up taking another deal like that to show what’s going to happen.”
Avoiding a bad market the next offseason seems like a good incentive to make a new deal. There is also motivation for this to happen soon, as uncertainty around the limit has already prevented deals from happening.
Since the beginning of April, after the initial career run at the beginning of the league year, to the franchise deadline of July 15, just eight players: Panthers running back Christian McCaffrey, the Texans’ offensive tackle. , Laremy Tunsil, Saints quarterback Taysom Hill. , Patriots safety Patrick Chung, Chiefs quarterback Patrick Mahomes, Chiefs defensive tackle Chris Jones, Browns defensive end Myles Garrett and Titans running back Derrick Henry signed extensions with their teams. Last year, according to Spotrac, 31 players signed extensions during that time period. Eight is the lowest number of players getting long-term offers from their teams during that time period since the closing year of 2011.
Fourteen players received the franchise or transition labels this offseason. Only two, Jones and Henry, signed long-term extensions before last week’s deadline. The remaining 12 players who will play under the tag this year are the ones who have done the most since the tag was first implemented in 1993.
Fitzgerald said that if he were in charge, he would spread the salary losses over the next three years. His argument is that spending at the CBA is already broken into three-year windows, making it a reasonable compromise for homeowners without making the pain too acute for the player and staff departments.
“If you lower the limit so much for a couple of years, teams should be able to deal with it and the players won’t get hurt that way,” Fitzgerald told me.
Earlier this month, the sentiment around the league and in the NFLPA was that agreements on health and safety measures should be presented before finances and that, if necessary, talks about how to manage the salary cap could take place during training camp or even the first part of the season. Health and safety remain the top priority, but economic talks have increased in the past two weeks.
NFL Network reported last week that a deal can be reached before the camp begins on July 28. It’s an ambitious goal, especially for such a big company: Softening the limit is more complicated than it sounds.
