NFL Cap Concerns

Despite a newly minted collective bargaining agreement that runs through 2030, NFL owners are looking to renegotiate and “share the pain” in the event revenues decline this year as expected. Canceled games and empty or partially-filled stadiums this season would have a significant impact on the league’s salary cap in 2021.

The league’s cap this year is $198.2 million. An entire season played without fans would drop that number to approximately $170 million, according to ESPN. The cap has risen by at least $10 million every year since 2013, and any reduction would change the market for draft picks and free agents. Only two of 32 first-round picks have signed this year, a number far below normal and a sign that teams are being fiscally conservative amid the uncertainty.

The players are unlikely to concede any additional salary after a hard-fought CBA deal resulted in their share of league revenues not falling below 47% in 2020 or 48% in 2021 and beyond. The salary cap is also calculated by a formula directly tied to league revenues.

Owners are expected to approach the players in the coming weeks to deal with pandemic-related revenue loss and ways to preserve the cap in 2021. The result could be more labor tension just as the 2020 season is about to get underway.