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pennstate10

Could 2021 see a big increase in salary cap?

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Let's connect the dots. 

 

There is serious buzz about major college football being moved to the spring. 

 

This leaves Satrudays in the fall open for football. 

 

I could easily see the NFL filling that void with Saturday tripleheaders, along with the sunday and Monday games. Thursday slate might just get moved to Saturday evening. 

 

Of course, Saturday tripleheaders would increase NFL media rights revenue. Probably by at least 50%. 

 

Ticket sales will will be down, but balanced by the gain in tv revenue, probably a net increase in overall NFL revenue, maybe by 20-30 %. And a resulting increase in salary cap. 

 

Beane and company are very proactive. I'd imagine they are monitoring this situation closely, and preparing to extend players before any large salary cap increase.  

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I am not 100% sure, but I don't think the leagues immediately see much of the increases in TV revenues. The channels pay millions for the contracts, and the rights to broadcast football. The increase in viewership then Increases the amount of money the channels make. So, the increase in TV viewership would not impact the salary cap now, but later on it might when the TV contracts are up, and new ones need to be made. 

 

The only thing I could think of that would change this is if the NFL actually made a percent of the TV revenues in addition to the money initially paid by the TV stations. I am unaware that this is the case.

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Well the networks are giving to college football some $ for airing their games, and yes, it is very likely as I mentioned two weeks ago the NFL could take over Saturdays.  As Watkins mentioned, it would probably be a one year contract, and they wouldn’t move off the MNF, they would just add three games on Saturday, three on Sundays, MNF, and TNF so in essence, you have 8 games to watch if you don’t have the ticket so half the league is playing somewhere.

 

I see it as a way to defray the big loss in 2020 just get a little closer to what the cap is now as no one has explained to me of the players have contracts, and if the cap is based on revenue, what definitively happens to the contracts if the cap goes down.  The owners take it on the chin.  That will go over like a fart in church so Saturday games and a plethora of advertising in the stands as no one will be there, can maybe offset some of the lost revenue.  To say greedy owners or players, guys it’s an entertainment business.  Many of you are in corporate America and you know they either make up the $ somewhere else or to save EBIT (earnings before income tax) they cut costs.  It’s nothing different when govt taxes whatever segment of America.  They just pass it on to the public and prices go up.  Simple economics and not right, not wrong, just the way it is here.

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7 minutes ago, machine gun kelly said:

Well the networks are giving to college football some $ for airing their games, and yes, it is very likely as I mentioned two weeks ago the NFL could take over Saturdays.  As Watkins mentioned, it would probably be a one year contract, and they wouldn’t move off the MNF, they would just add three games on Saturday, three on Sundays, MNF, and TNF so in essence, you have 8 games to watch if you don’t have the ticket so half the league is playing somewhere.

 

I see it as a way to defray the big loss in 2020 just get a little closer to what the cap is now as no one has explained to me of the players have contracts, and if the cap is based on revenue, what definitively happens to the contracts if the cap goes down.  The owners take it on the chin.  That will go over like a fart in church so Saturday games and a plethora of advertising in the stands as no one will be there, can maybe offset some of the lost revenue.  To say greedy owners or players, guys it’s an entertainment business.  Many of you are in corporate America and you know they either make up the $ somewhere else or to save EBIT (earnings before income tax) they cut costs.  It’s nothing different when govt taxes whatever segment of America.  They just pass it on to the public and prices go up.  Simple economics and not right, not wrong, just the way it is here.


The salary cap is based on revenue.  So if league wide revenue takes a big dip, then the cap takes a big dip and the owners (immediately) and players (eventually)  take it on the chin.  There would also be downstream issues around teams that are unable to get under the cap and that could even result in penalties like lost draft picks. 
 

There is a CBA clause that states that both sides agree to negotiate if something like this were to happen, but players have an advantage in those negotiations since teams are on the hook for their salaries this season even if there are no games.  This article from PFT explains the situation well:
 

https://www.google.com/amp/s/profootballtalk.nbcsports.com/2020/04/22/nflpa-acknowledges-lack-of-force-majeure-clause-in-cba/amp/

 

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45 minutes ago, Watkins101 said:

I am not 100% sure, but I don't think the leagues immediately see much of the increases in TV revenues. The channels pay millions for the contracts, and the rights to broadcast football. The increase in viewership then Increases the amount of money the channels make. So, the increase in TV viewership would not impact the salary cap now, but later on it might when the TV contracts are up, and new ones need to be made. 

 

The only thing I could think of that would change this is if the NFL actually made a percent of the TV revenues in addition to the money initially paid by the TV stations. I am unaware that this is the case.


 

what he’s arguing isn’t more viewers alone but essentially 3 additional nationally televised games instead. 
 

to shift the games around would definitely come with renegotiated tv contracts 

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Posted (edited)

Well, I don’t see but a moderate cap increase at best, with limited to no fans in stadiums for 2020/2021, the league will need the exposure that the networks supply to keep themselves in the public eye, we shall see I guess. 
 

Go Bills!!!

Edited by Don Otreply
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Good year for players still under contract who have retired to unretire.  Teams are obligated to pay welfare to them even if games are not held.  Since the player will then retire again 2021 impact does not impact them.

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1 hour ago, pennstate10 said:

Let's connect the dots. 

 

There is serious buzz about major college football being moved to the spring. 

 

This leaves Satrudays in the fall open for football. 

 

I could easily see the NFL filling that void with Saturday tripleheaders, along with the sunday and Monday games. Thursday slate might just get moved to Saturday evening. 

 

Of course, Saturday tripleheaders would increase NFL media rights revenue. Probably by at least 50%. 

 

Ticket sales will will be down, but balanced by the gain in tv revenue, probably a net increase in overall NFL revenue, maybe by 20-30 %. And a resulting increase in salary cap. 

 

Beane and company are very proactive. I'd imagine they are monitoring this situation closely, and preparing to extend players before any large salary cap increase.  

I think you may have missed some dots. Like the Pro players are more immune than college players? Other pro leagues have already shortened seasons but the NFL is going to pull off business as usual? In a game that is basically a street fight inside a phone booth? The NFL has yet to play a preseason game, let alone a regular season game. You may be getting the cart out in front to the horse.  

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Pfftt.. increased salary cap means zilch, zip, nada, because all 32  teams get the same increase.

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Posted (edited)

First of all, before the cap goes up in 2021 it's going to go down. The cap is computed each year on projected revenues, plus or minus any adjustments made to the actual revenue from the previous season's revenues, in relation to how far off that projection was from the real thing. 

 

This year's revenue is going to be largely, hugely, bigly over projected. That already means a drop in next year's cap just to make up for that adjustment. Yes it can be renegotiated in the event of a catastrophe, but rest assured any new deal isn't going to wind up with the players getting any larger percentage in the long haul. More likely they will negotiate a prorating of next year's cap loss over the next 5 years or something. But it will go down before it goes up.

 

Now as far as adding 3 games on Saturday, I don't see where that would add anywhere near 50% to the existing TV revenue.  I can see some increase,  maybe. But there's only 16 games a week now, and the "regular" Sunday game networks already are able to protect a certain amount of games from being flexed out of their time slots because with all the prime time games now their slate of "marketable" games sometimes gets quite thin. Would all Saturday games be considered prime time? So would there be 6/7 out of 16 (at most) games every week played in prime time? And if so will the networks who already lose games to prime time sit idly by while they lose more? Or are they the ones who will be expected to pay more for the games they already pay for, many of which aren't very attractive and only appear in each team's home market?

 

Sorry I'm seeing a lot of unconnected dots that lead to a big jump in the 2021 cap.

Edited by Tuco
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2 hours ago, BarleyNY said:


The salary cap is based on revenue.  So if league wide revenue takes a big dip, then the cap takes a big dip and the owners (immediately) and players (eventually)  take it on the chin.  There would also be downstream issues around teams that are unable to get under the cap and that could even result in penalties like lost draft picks. 
 

There is a CBA clause that states that both sides agree to negotiate if something like this were to happen, but players have an advantage in those negotiations since teams are on the hook for their salaries this season even if there are no games.  This article from PFT explains the situation well:
 

https://www.google.com/amp/s/profootballtalk.nbcsports.com/2020/04/22/nflpa-acknowledges-lack-of-force-majeure-clause-in-cba/amp/

 

The owners could only be on the hook for the guaranteed money in most contracts without a season.  Additionally, player contracts vary from team to team and from player to player.  Blanket statements covering all players are not as accurate as many of us would hope that they would be. Some individual contracts contain provisions that protect some players pretty well and some have stronger protections for the owners.  The star players generally have the best financial protections and the lesser players, not so much.  It is in the best interests of the owners and the NFLPA to cut a deal that smooths the revenue curve over a couple of seasons.  This will allow them to protect the individual player contract structure, protect the majority of players (those without big guaranteed money), and be financially workable for the owners.

 

If the league can cut some deals on TV contracts, streaming services, or other media services to increase revenues, it will make this problem easier to manage.  We should all expect ticket prices to jump significantly in 2021, regardless of how this all plays out.

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11 minutes ago, Tuco said:

First of all, before the cap goes up in 2021 it's going to go down. The cap is computed each year on projected revenues, plus or minus any adjustments made to the actual revenue from the previous season's revenues, in relation to how far off that projection was from the real thing. 

 

This year's revenue is going to be largely, hugely, bigly over projected. That already means a drop in next year's cap just to make up for that adjustment. Yes it can be renegotiated in the event of a catastrophe, but rest assured any new deal isn't going to wind up with the players getting any larger percentage in the long haul. More likely they will negotiate a prorating of next year's cap loss over the next 5 years or something. But it will go down before it goes up.

 

Now as far as adding 3 games on Saturday, I don't see where that would add anywhere near 50% to the existing TV revenue.  I can see some increase,  maybe. But there's only 16 games a week now, and the "regular" Sunday game networks already are able to protect a certain amount of games from being flexed out of their time slots because with all the prime time games now their slate of "marketable" games sometimes gets quite thin. Would all Saturday games be considered prime time? So would there be 6/7 out of 16 (at most) games every week played in prime time? And if so will the networks who already lose games to prime time sit idly by while they lose more? Or are they the ones who will be expected to pay more for the games they already pay for, many of which aren't very attractive and only appear in each team's home market?

 

Sorry I'm seeing a lot of unconnected dots that lead to a big jump in the 2021 cap.

I would expect something similar to what hockey is trying to do (pending player vote) with a flat cap for the next 2 years.

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Loss of revenue from the pandemic is going to hurt the cap in the short term, you can already see it in other leagues with cap freezes.

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Posted (edited)
50 minutes ago, 1ManRaid said:

Loss of revenue from the pandemic is going to hurt the cap in the short term, you can already see it in other leagues with cap freezes.

The cap may go down, not up

Edited by Niagara
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5 hours ago, pennstate10 said:

Let's connect the dots. 

 

There is serious buzz about major college football being moved to the spring. 

 

This leaves Satrudays in the fall open for football. 

 

I could easily see the NFL filling that void with Saturday tripleheaders, along with the sunday and Monday games. Thursday slate might just get moved to Saturday evening. 

 

Of course, Saturday tripleheaders would increase NFL media rights revenue. Probably by at least 50%. 

 

Ticket sales will will be down, but balanced by the gain in tv revenue, probably a net increase in overall NFL revenue, maybe by 20-30 %. And a resulting increase in salary cap. 

 

Beane and company are very proactive. I'd imagine they are monitoring this situation closely, and preparing to extend players before any large salary cap increase.  

 

no clue.  but I like the critical thinking here!

2 hours ago, 1ManRaid said:

Loss of revenue from the pandemic is going to hurt the cap in the short term, you can already see it in other leagues with cap freezes.

 

I think the OP’s point is that ticket revenue may be made up by TV rights for games on Sat. 

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7 hours ago, Watkins101 said:

I am not 100% sure, but I don't think the leagues immediately see much of the increases in TV revenues. The channels pay millions for the contracts, and the rights to broadcast football. The increase in viewership then Increases the amount of money the channels make. So, the increase in TV viewership would not impact the salary cap now, but later on it might when the TV contracts are up, and new ones need to be made. 

 

The only thing I could think of that would change this is if the NFL actually made a percent of the TV revenues in addition to the money initially paid by the TV stations. I am unaware that this is the case.

And don't forget the millions each team would need to spend on COVID-19 to keep playing safe football, if even that is possible.   

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Posted (edited)

There aren’t enough good matchups in one given weekend for networks to want to give the NFL any substantial money for a double or triple header on Saturday. I also don’t think the NFL can just move games to another date (Saturday) and tell the networks it will cost more money for them to carry those games. In fact, I know the NFL can’t do that. Those networks have already paid for the right to carry each game no matter when or where it’s played,

 

Also, that would take away from the Sunday ticket. Thursday, Sunday and Monday Night games are already not carried by that as well as National games on the Sunday afternoons. Take away two or three national games on Saturday’s and buying that package becomes a lot less attractive. I’m sure DirecTV would have to have some sort of say as they already paid the NFL for rights to carry games.That’s taking up to a quarter or more games away (bye weeks) from the Ticket. Not to mention, the attraction of the Ticket is to watch your team when you don’t live in market. Your team will be on National television more which will make getting the Ticket a lot less attractive. 

 

All in all, increased money, through television, is a pipe dream for the upcoming season. It’s not going to happen. 

Edited by Beast

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Beast, I’m not sure and I’ll tell you why.  The networks care about viewership for advertising.  Whether they are great matchups or not, a lot more people will watch vs. reruns of one of the network shows, so they may only pay a certain amount, but they would most likely flex as many games as possible which would be in their negotiations to get viewership up.  A lot of people watch TNF and some of these matchups suck, but they watch anyway as the American public is addicted to football.

 

This still will not bring up the cap.  It most likely goes down as the losses of no fans in the stands far outweighs additional tv contracts.  I can see the NFL trying aggressive streaming as well and littering all of the stands with advertisements everywhere.  Now there has been discussions trying to flatten out the dip over two years.  I’d prefer they don’t do that as just take you’re lumps and get it over.  If they do flatten it out, it could delay contract extensions or encourage other teams with more space to try and poach talent.  We have some important players needing extensions so not sure how this plays out.   We’ll see.

 

Lastly, the networks may actually like this in that having the NFL on Saturdays in the fall, and NCAA college football in the spring could bring up viewership.  This is all conjecture and just thinking out loud.  None of us know and just need to play it out.

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Posted (edited)
3 hours ago, Beast said:

There aren’t enough good matchups in one given weekend for networks to want to give the NFL any substantial money for a double or triple header on Saturday. I also don’t think the NFL can just move games to another date (Saturday) and tell the networks it will cost more money for them to carry those games. In fact, I know the NFL can’t do that. Those networks have already paid for the right to carry each game no matter when or where it’s played,

 

Also, that would take away from the Sunday ticket. Thursday, Sunday and Monday Night games are already not carried by that as well as National games on the Sunday afternoons. Take away two or three national games on Saturday’s and buying that package becomes a lot less attractive. I’m sure DirecTV would have to have some sort of say as they already paid the NFL for rights to carry games.That’s taking up to a quarter or more games away (bye weeks) from the Ticket. Not to mention, the attraction of the Ticket is to watch your team when you don’t live in market. Your team will be on National television more which will make getting the Ticket a lot less attractive. 

 

All in all, increased money, through television, is a pipe dream for the upcoming season. It’s not going to happen. 

 

Yep. The Networks would have to willingly come back to the negotiating table to renegotiate the deals. Maybe they would do that because NFL football is still a ratings win compared to almost everything else but it is far from guaranteed and the NFL cannot compel them to. 

Edited by GunnerBill

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