As we are all focused on the return of pro sports to the playing fields this year, decision makers in the National Football League are already considering the fallout from the Coronavirus and how it might have lingering effects on seasons to come.
Look no further than the “contract structure” of any deals that get done between now and when “cap growth” can return to normalcy. Over the next few weeks for sure, timing will finally be of the essence and deals will “have to get done”. We are all guessing at the structure of what those deals will look like.
Consider a few facts in order to try and make an educated guess:
· 2020 Salary Cap for each team will be in the range of $198.2 million
· Future cap numbers are determined by revenues from the prior year
· With millions of dollars of revenues already at stake/limbo this year, the 2021 salary cap is set to decrease by at least, 25-30 percent.
· The probable salary cap for 2021 will dip to $160-170 million, which will be an unprecedented decrease for NFL teams
In my opinion, I think there is ZERO chance the salary cap doesn’t go down. It doesn’t take a math major to figure out that someone is going to get squeezed in all of this, and my guess is…It won’t be the owners. They are already paying the price because their ability to generate revenues through marketing/ad sales/sponsorships/ stadium vacancies are all being undermined with current economic conditions. In fact, because of COVID-19, I could see gross revenues being cut in half depending on how the 2020 season plays out. Cutting payroll in any business is a dicey proposition, but losses are probably going to be passed on to the employees. Think about it, what if your boss was mandated by his accountants to cut overall employee payroll by 30%?
Short of an across-the-board wage scale cut by all players, general managers are going to be required to build their team on a 2016 budget (Salary Cap — $155 million). They are surely already trying to figure out how to reduce cap counts in future years. Each player has a “cap charge” for each year and league rules dictate that the total must come under the league wide cap or contracts that push you above the number don’t get approved. I am very much interested in seeing how these new projections will factor into the new contracts for quarterbacks like Cowboys Dak Prescott and Chiefs Pat Mahomes as well as many others. I’m guessing their base salaries will have “NO” increase at all through the first three years, if league rules will allow. Cap counting rules and their effect on triggering mechanisms are complicated and, will no doubt have to be altered by the league and its subsidiary, known as the NFL Management Council. Credit cards and Monopoly money aside, it could get crazy.
In fact, I think the current circumstances have already been reflective in the kind of deals some players signed this offseason for 2020, with NFL teams already having one eye on the future. Many players have yet to get the multi-year deal- i.e. current free agents like DC Logan Ryan or DE JaDeveon Clowney have found that the market will not support the multi-year deals they are after. In fact, what once was thought to be a solid free-agent market for both, has now dried up. Clowney was asking for $20 million a year on a multi-year deal in February (and is known to have turned down in excess of $17 million). He’ll probably have to settle for half of that figure or less on a one-year deal now.
Currently, there are approximately 1,100 players who are set to be free agents after the 2020 season concludes. As we said, many more, one-year deals than the norm have been signed over the last few months. A vast majority of these players could get left without a job for 2021, especially if team builders are looking to cut 30% of their payroll.
It’s going to take some ingenuity and creativity by all involved, including the NFLPA, to get thru these crazy times. If not you will have quite a few good- solid core players left out on the streets looking for work. GM’s will have no choice but to keep their “stars” at full price and fill in with a bunch of minimum salary guys to complete their roster. I think that’s bad for “the game” and the league overall going forward.
Now I understand why there reportedly are 20 potential bidders lining up for a chance to purchase the Chapter 11, XFL Football league. A quick look into the crystal ball says, that might be a pretty good alternative for some. The quality of the player available and the volume of those players who might just be on the street should not come as a surprise to those in the know. If positioned correctly, that league would get a substantial shot in the arm. Hummm ??? I guess Disney has always been best at seeing what the future holds.