How does COVID affect the salary cap?

[Augie]

We will probably have no fans this year, and we may not even have a season. The salary cap is based upon shared revenue. What if there IS no revenue? Does the cap drop like a brick? Do they average it in some way? How do teams fit under the cap in that case? Do players get a year of service, and are they a year closer to the end of their contracts? Do they need to play games? If so, how many? Are players smart to sign now and get what they can? Does the CBA have a force majeure clause? That’s seems to be why NBA players need to try to go forward lest they lose leverage in a new deal. 

 

So many questions, and I have no answers. I’ve heard that they have discussed spreading the revenue loss over a single season, or stretching it out to 5-10 years. 

 

I really don’t know how this works.  What are people thinking? 

 

 

.

Edited July 15, 2020 by Augie

[costrovs]

I remember reading somewhere that the majority of the salary comes from advertising. (85%+)? That's just a guess, i don't know the exact figures.

So, with that in mind, I think the NFL will be okay for at least a year. I could be wrong though.

 

Edit.

In regards to the other questions, I've thought about that stuff too. Your guess is as good as mine. And I have no idea.

Edited July 15, 2020 by costrovs

[Augie]

2 minutes ago, costrovs said:

I remember reading somewhere that the majority of the salary comes from advertising. (85%+)? That's just a guess, i don't know the exact figures.

So, with that in mind, I think the NFL will be okay for at least a year. I could be wrong though.

 

Edit.

In regards to the other questions, I've thought about that stuff too. Your guess is as good as mine. And I have no idea.

 

What if there is no advertising/television revenue? Or do the networks have some minimal guarantee? Not putting you on the spot, I just don’t really have a good idea of how this works out. If we add our ideas together, apparently the total would be zero. 

[Mr. WEO]

6 minutes ago, Augie said:

 

What if there is no advertising/television revenue? Or do the networks have some minimal guarantee? Not putting you on the spot, I just don’t really have a good idea of how this works out. If we add our ideas together, apparently the total would be zero. 

 

TV contracts go through 2022.  If there is no football then, unless there is a force majeure clause already in each network contract, the networks would have to sue to keep the money for a season not played.

 

If the season is canceled then there is no year for players to accrue.  If there is a season and a player opts out then they get no money but and accrued year.  Players under contract don't have much option to "sign now".

 

The revenue split in the CBA is what it is.  I'm not sure how a force majeure would apply.  They have already agreed to split whatever the revenues are.  How would or could it be changed?  Unlike the MLB, revenue sharing has made these questions much easier for the NFL (and NHL).

 

If games are played this season, the cap for next season will be decimated.  If the season is canceled and there is no revenue even from networks it gets interesting.  Maybe the 2021 cap stays the same as 2019.

[costrovs]

If the games are gonna be on T.V., then they'll be receiving ad revenue.

I just Googled 'nfl ad revenue' and it said that the NFL pulled in $5B in TV ad revenue. And the NFL salary cap for this year is 198.2 million. If I bump that up to 200 million and divide that by $5B, I get 25. That's 25 team salaries right there. Not to mention local team revenue, jerseys, and other NFL goodies. Not to mention the new Redskins** jerseys. I'm sure a lot of people will want those.

 

https://www.investopedia.com/articles/personal-finance/062515/how-nfl-makes-money.asp

 

In the 3rd paragraph it says 'Bloomberg estimates it earned around $15 billion during the 2018 season'

Based on that, I'm sure they'll be fine. Everyone will get paid, and the show goes on.

 

There's too much money to be made here. I'm guessing the NFL will tell the players to play or don't get paid.

[Seasons1992]

@Augie with a straight take.....well done and good question. 
 

I actually wonder in a crazy world, if no season this year, 2021 goes to a DOUBLE salary cap amount. Like $285M for only one season. 

[Augie]

5 minutes ago, Mr. WEO said:

 

TV contracts go through 2022.  If there is no football then, unless there is a force majeure clause already in each network contract, the networks would have to sue to keep the money for a season not played.

 

If the season is canceled then there is no year for players to accrue.  If there is a season and a player opts out then they get no money but and accrued year.  Players under contract don't have much option to "sign now".

 

The revenue split in the CBA is what it is.  I'm not sure how a force majeure would apply.  They have already agreed to split whatever the revenues are.  How would or could it be changed?  Unlike the MLB, revenue sharing has made these questions much easier for the NFL (and NHL).

 

If games are played this season, the cap for next season will be decimated.  If the season is canceled and there is no revenue even from networks it gets interesting.  Maybe the 2021 cap stays the same as 2019.

 

If there is no football, I’m guessing they don’t have to pay. It gets muddier if they try to start a season, and then have to stop. If they play 3-4 games and have to stop, does a player earn an entire year towards the end of a rookie deal? I like our young core and their current contracts. I might rather not play than play 3 games and stop. 

 

If they split revenue according to the current CBA, then EVERY team might be over the cap. 

[Mr. WEO]

3 minutes ago, Augie said:

 

If there is no football, I’m guessing they don’t have to pay. It gets muddier if they try to start a season, and then have to stop. If they play 3-4 games and have to stop, does a player earn an entire year towards the end of a rookie deal? I like our young core and their current contracts. I might rather not play than play 3 games and stop. 

 

If they split revenue according to the current CBA, then EVERY team might be over the cap. 

 

Regardless of a lower "cap" next year, teams would be obligated to honor their contracts.  

 

If there is not football, there would have to already be agreed upon circumstances in the network contracts allowing them not to pay the NFL for this season.

[Ethan in Cleveland]

Cap is based on gross revenue and not net revenue. So if there is no season it doesn't matter that the players wont get paid. 

They will have to negotiate a new cap. There would be no other way.

Owners will still want to negotiate guaranteed money for roster bonuses as they would be obligated to pay regardless if there is any revenue or not. 

[Punching Bag]

No NFLPA will insist they should be paid including full amount for any potential bonuses they may have earned (but not fines they would likely have paid).

 

There will certainly be advertisers who are not advertising this year whether due to advertising budget down, what they are adverting is less in demand in this environment (cruises as example were big advertisers on NFL games) or local advertisers who will not be paying for stadium advertising not see by attendees.

[Doc]

I think the salary cap is immune to it.

[Augie]

7 minutes ago, Mr. WEO said:

 

Regardless of a lower "cap" next year, teams would be obligated to honor their contracts.  

 

If there is not football, there would have to already be agreed upon circumstances in the network contracts allowing them not to pay the NFL for this season.

 

Those contracts pay them to play football. What if there is no football? Where do we go from there? What is the wording in the contract? And the CBA? The devil is in the details. I doubt they pay them to sit home and play video games. 

 

 

.

Edited July 15, 2020 by Augie

[Augie]

17 minutes ago, Seasons1992 said:

@Augie with a straight take.....well done and good question. 
 

I actually wonder in a crazy world, if no season this year, 2021 goes to a DOUBLE salary cap amount. Like $285M for only one season. 

 

I doubt that happens, as the owners don’t have double the income. 

 

This is crazy %$^#$, and I’m sure people far smarter than myself have spent significant time on it. I just don’t know how this turns out. 

[Mr. WEO]

5 minutes ago, Augie said:

 

Those contracts pay them to play football. What if there is no football? Where do we go from there? What is the wording in the contract? And the CBA? The devil is in the details. I doubt they pay them to sit home and play video games. 

 

 

.

 

Again, there would have to be language in the TV contracts.  The CBA is shared revenue.  48% of nothing is nothing.

[Punching Bag]

6 minutes ago, Augie said:

 

Those contracts pay them to play football. What if there is no football? Where do we go from there? What is the wording in the contract? And the CBA? The devil is in the details. I doubt they pay them to sit home and play video games. 

 

If up to NFLPA yes.  They voted to have no preseason games and will probably go to court to try to get it.

[costrovs]

At the end of the day, the show will go on(I hope).

If a player or players get sick they'll probably take them out of the game for a week or two(assuming they actually feel sick and not just test positive).

This virus will hit 350lb Joe Blow with diabetes in the 300 section a lot harder than any of the NFL players.

 

Zeke had it, he said he had a little cough and a little shortness of breathe for a couple days.

Coincidentally, the virus doesn't seem to do very much to professional athletes or people in tip top physical shape.

 

[Mr. WEO]

13 minutes ago, Limeaid said:

 

If up to NFLPA yes.  They voted to have no preseason games and will probably go to court to try to get it.

 

 

good luck with that.  They can't demand what hasn't been collectively bargained.

[Mr. WEO]

6 minutes ago, costrovs said:

At the end of the day, the show will go on(I hope).

If a player or players get sick they'll probably take them out of the game for a week or two(assuming they actually feel sick and not just test positive).

This virus will hit 350lb Joe Blow with diabetes in the 300 section a lot harder than any of the NFL players.

 

Zeke had it, he said he had a little cough and a little shortness of breathe for a couple days.

Coincidentally, the virus doesn't seem to do very much to professional athletes or people in tip top physical shape.

 

 

Von Miller says you don't know what you're talking about.

 

Also, if symptomatic, player will be out for at least 10 days since symptoms began and at least 72 hours since last symptomatic.  

 

Try that google.com.....

 

 

[Augie]

10 minutes ago, costrovs said:

At the end of the day, the show will go on(I hope).

If a player or players get sick they'll probably take them out of the game for a week or two(assuming they actually feel sick and not just test positive).

This virus will hit 350lb Joe Blow with diabetes in the 300 section a lot harder than any of the NFL players.

 

Zeke had it, he said he had a little cough and a little shortness of breathe for a couple days.

Coincidentally, the virus doesn't seem to do very much to professional athletes or people in tip top physical shape.

 

 

I have to disagree there. If you test positive, you are OUT! I’d bet a minimum of two weeks, then, like the NBA, you need a number of negative tests to get back in the game. 

 

I don’t see this season happening. I hope and pray I’m wrong. 

[Rochesterfan]

Ok - guys slow down with the takes.

 

The NFL and NFLPA are having meetings to determine answers to all of these questions and more.

 

They have to determine and agree to thresholds for the games counting for this year and how to account for the loss of revenue.  To prevent a huge drop in the cap - they are discussing spreading the lost revenue out over 3-5 and even the next 10 years.  
 

Typically (as in other work stoppages) - the NFL just have to play games to get the TV revenue that was agreed to, but my guess is the NFL will be working with the stations to help cover if games go missing.

 

They also have to negotiate with the NFLPA the entire testing protocol and how teams are going to handle positive tests.  There was talk of maybe trying to negotiate AFC plays on even weeks and NFC on odd weeks to give teams 2 weeks between games to lessen the impact.

 

The NFL and NFLPA were hoping for some clear plan by the CDC or federal government to help guide their planning, but as that looks lost - they will have to hammer all of this out in a changing environment.

 

Until they come to agreements - everything else is just guessing and some may be right, but most will be wrong.

 

[Punching Bag]

20 minutes ago, costrovs said:

 

Zeke had it, he said he had a little cough and a little shortness of breathe for a couple days.

Coincidentally, the virus doesn't seem to do very much to professional athletes or people in tip top physical shape.

 

 

Other than sprout nonsense right?  You have version if you say it does not hit professional athletes. We have a professional on board.

[Augie]

5 minutes ago, Rochesterfan said:

Ok - guys slow down with the takes.

 

The NFL and NFLPA are having meetings to determine answers to all of these questions and more.

 

They have to determine and agree to thresholds for the games counting for this year and how to account for the loss of revenue.  To prevent a huge drop in the cap - they are discussing spreading the lost revenue out over 3-5 and even the next 10 years.  
 

Typically (as in other work stoppages) - the NFL just have to play games to get the TV revenue that was agreed to, but my guess is the NFL will be working with the stations to help cover if games go missing.

 

They also have to negotiate with the NFLPA the entire testing protocol and how teams are going to handle positive tests.  There was talk of maybe trying to negotiate AFC plays on even weeks and NFC on odd weeks to give teams 2 weeks between games to lessen the impact.

 

The NFL and NFLPA were hoping for some clear plan by the CDC or federal government to help guide their planning, but as that looks lost - they will have to hammer all of this out in a changing environment.

 

Until they come to agreements - everything else is just guessing and some may be right, but most will be wrong.

 

 

The bolded, then you go off on your own? 

 

I don’t know, and I said I don’t know.  I’m curious what others may think or know. This is a tricky time. 

[costrovs]

14 minutes ago, Mr. WEO said:

 

Von Miller says you don't know what you're talking about.

 

Also, if symptomatic, player will be out for at least 10 days since symptoms began and at least 72 hours since last symptomatic.  

 

Try that google.com.....

 

 

 

I get it. Rules are rules.

BUT.....

 

Hypothetically, if this virus keeps going into January and February and and the playoffs are on the line, you don't think a team will fudge some results for some players?

Maybe a shot of steroids before the game? Just saying.

 

6 minutes ago, Limeaid said:

 

Other than sprout nonsense right?  You have version if you say it does not hit professional athletes. We have a professional on board.

 

I never said that.

I said 'This virus will hit 350lb Joe Blow with diabetes in the 300 section a lot harder than any of the NFL players'

[Augie]

6 minutes ago, costrovs said:

 

I get it. Rules are rules.

BUT.....

 

Hypothetically, if this virus keeps going into January and February and and the playoffs are on the line, you don't think a team will fudge some results for some players?

Maybe a shot of steroids before the game? Just saying.

 

 

I never said that.

I said 'This virus will hit 350lb Joe Blow with diabetes in the 300 section a lot harder than any of the NFL players'

 

What if the 350# Joe Blow is your nose tackle??? 

[Punching Bag]

32 minutes ago, costrovs said:

 

Coincidentally, the virus doesn't seem to do very much to professional athletes or people in tip top physical shape.

 

 

He did not say that.  Someone hacked his account or he has multiple personalities.

[Rochesterfan]

3 minutes ago, Augie said:

 

The bolded, then you go off on your own? 

 

I don’t know, and I said I don’t know.  I’m curious what others may think or know. This is a tricky time. 

 

My take is that we don’t know because they have not come to an agreement yet on any of that.

 

All of the questions you asked are legitimate, but no one can really answer because they are still in discussions.  
 

WGR had a great interview yesterday talking about this and the journalist basically said there is a ton of speculation, but everything needs to be agreed to similar to a short term CBA because these are not part of the current CBA.

The NFL and NFLPA were meeting this week to begin discussions.  As they come to agreements you (and everyone else) will get answers.

 

Sorry if you do not like my answer, but it is the truth.  

 

 

 

[costrovs]

Just now, Augie said:

 

What if the 350# Joe Blow is your nose tackle??? 

 

Then Joe Blow's gonna get some roids before the game. lol

I'm sure Joe Blow the NT and Joe Blow in the 300 section have different body types and workout regimens. You get the idea.

[Punching Bag]

21 minutes ago, Rochesterfan said:

 

They also have to negotiate with the NFLPA the entire testing protocol and how teams are going to handle positive tests.  There was talk of maybe trying to negotiate AFC plays on even weeks and NFC on odd weeks to give teams 2 weeks between games to lessen the impact.

 

 

Teams play only 8 games in a season with players getting full salary or double the season?  Neither works out well.

 

What WOULD help would be altered schedule where teams play more in area.  Stupid to be playing East vs West in this environment.

[Mr. WEO]

13 minutes ago, costrovs said:

 

I get it. Rules are rules.

BUT.....

 

Hypothetically, if this virus keeps going into January and February and and the playoffs are on the line, you don't think a team will fudge some results for some players?

Maybe a shot of steroids before the game? Just saying.

 

 

I never said that.

I said 'This virus will hit 350lb Joe Blow with diabetes in the 300 section a lot harder than any of the NFL players'

 

You also said this...

 

39 minutes ago, costrovs said:

 

Coincidentally, the virus doesn't seem to do very much to professional athletes or people in tip top physical shape.

 

 

 

And no team is going to be "fudging the results".  That's insane.  Players have access to their results from the labs that do them.  

 

You're off the rails.

[costrovs]

5 minutes ago, Limeaid said:

 

He did not say that.  Someone hacked his account or he has multiple personalities.

 

Coincidentally, the virus doesn't seem to do very much to professional athletes or people in tip top physical shape.

 

Where did I say that the virus doesn't hit professional athletes?

 

 

Von Miller and Zeke's symptoms are VERY different than what an 80 year old will get, or a diabetic.

Hell, a 70+ year old can die from the normal flu.

 

Von Miller's was worse than Zeke's. Von has Asthma, of course his symptoms will be worse.

 

Can a professional athlete get it really bad? SURE.

but they have a lot less of a chance than other people.

[Augie]

8 minutes ago, Rochesterfan said:

 

My take is that we don’t know because they have not come to an agreement yet on any of that.

 

All of the questions you asked are legitimate, but no one can really answer because they are still in discussions.  
 

WGR had a great interview yesterday talking about this and the journalist basically said there is a ton of speculation, but everything needs to be agreed to similar to a short term CBA because these are not part of the current CBA.

The NFL and NFLPA were meeting this week to begin discussions.  As they come to agreements you (and everyone else) will get answers.

 

Sorry if you do not like my answer, but it is the truth.  

 

 

 

 

Don’t get me wrong, it’s not whether I like it or not. I have questions. I’m sure that to some extent the current CBA addresses some $%#^ like this that could not be anticipated. I wonder what that language is. I wonder what those terms are. I wonder how much wiggle room exists.  

 

 

[costrovs]

6 minutes ago, Mr. WEO said:

 

And no team is going to be "fudging the results".  That's insane.  Players have access to their results from the labs that do them.  

 

You're off the rails.

 

Really?

Spygate? Deflategate? Fudging numbers, results, etc.. lt happens all the time.

Just because you don't hear about it, doesn't mean it doesn't happen.

 

You don't think other teams do this type of stuff?

The symptoms are similar to the flu. If a player feels fine, but tests positive, BOOM! Shot of roids and back into the game.

 

Welcome to the real world of sports.

 

[Rochesterfan]

9 minutes ago, Limeaid said:

 

Teams play only 8 games in a season with players getting full salary or double the season?  Neither works out well.

 

What WOULD help would be altered schedule where teams play more in area.  Stupid to be playing East vs West in this environment.

 

It is not what I would do - just some of the discussion talked about on WGR to try to help teams address the 10-14 days away with a positive test.  If they do not look at the schedule - the discussion on WGR is what happens when your WR is positive on a meeting day or in position work-out and now potentially all WRs on your team need to sit for 10 days and test negative 2 times prior to clearing.  
 

The NFL and NFLPA would need to agree to an altered schedule and how that impacts contracts and if the want to stretch out the season or what.

 

As far as they talked yesterday - the first thing they need to agree on is testing frequency and where that cost is coming from - the NFLPA was asking for daily tests for all players - which would be a huge cost.  They also have to decide on where and type of testing as the NFLPA was hoping to use a saliva test rather than a swab.

[Passepartout]

Yeah as if there is a season. We can be playing less games. And follow the route of the NBA, or M.L.B. Contracts could be fitting on in for the teams and players.

[Punching Bag]

The NFLPA is never cooperative with contracts.  What they cannot get in agreement they take to court.

[Mr. WEO]

45 minutes ago, costrovs said:

 

Really?

Spygate? Deflategate? Fudging numbers, results, etc.. lt happens all the time.

Just because you don't hear about it, doesn't mean it doesn't happen.

 

You don't think other teams do this type of stuff?

The symptoms are similar to the flu. If a player feels fine, but tests positive, BOOM! Shot of roids and back into the game.

 

Welcome to the real world of sports.

 

 

Man you got it ALL figured out!

 

38 minutes ago, Limeaid said:

The NFLPA is never cooperative with contracts.  What they cannot get in agreement they take to court.

 

 

Oh yeah?

 

[machine gun kelly]

9 hours ago, Augie said:

 

The bolded, then you go off on your own? 

 

I don’t know, and I said I don’t know.  I’m curious what others may think or know. This is a tricky time. 

Augie, it was a good question on a lot of people’s minds.  There should be football without fans so that is 70% roughly of the revenue from the tv contracts.  They may be able to make up a small portion with a Saturday contract with the networks.  College most likely will not play until the Spring.  College ball needs fans in the seats to pay for most of their sports programs as evidenced by so many universities cancelling sports this season in the other sports as football pays for these programs.

 

There are billions of dollars on the line and the players want to play to get paid.  Augie, you’re right, there has been a lot of discussion of spreading out the cap loss over multiple years.  Also, the NFLPA won’t go for it, but the NFL also floated holding back 35% of this year’s salaries for players, meaning they still get every last dime, just delayed to deal with the loss.  Bottom line is the owners will take it partially on the chin, but still one of the safest investments for a billionaire as each team is almost assured of a profit.  It’s just a matter of how profitable.

 

Anyway, again, good question Augs, and a good discussion.

[SlimShady'sSpaceForce]

there have been a few threads on this.

 

If you choose to look at the other comments .

 

 

 

 

Its a mess and probably won't be figured out until they have revenues to review IMO.  

 

[Tuco]

14 hours ago, Augie said:

 

Don’t get me wrong, it’s not whether I like it or not. I have questions. I’m sure that to some extent the current CBA addresses some $%#^ like this that could not be anticipated. I wonder what that language is. I wonder what those terms are. I wonder how much wiggle room exists.  

 

 

 

All the wiggle room they need exists. There is no force mejeure clause. But there is a clause that says if there is a significant cap drop because of missed games then both sides are bound to work out an agreement that is fair to both sides. Everything after that is speculation because nobody knows right now exactly what's going to happen yet. When it does happen then they will have solid numbers to work with. And yes it's been discussed and seems most likely that any significant drop in next year's cap would most likely be agreed to spread it out over several years.

 

Now if the season were to be totally cancelled that would certainly be an obstacle. Without a force mejeure clause it will become an ugly battle with most likely protracted court decisions, etc. But again, nobody knows. There are no simple answers to these questions right now. Wait and see is pretty much all we can do at this point.

 

Here's pretty much the only language in the CBA, and it leaves a wide open field of what ultimately may or may not happen. 

NOTE: The term "AR" refers to "All Revenue" as defined in the CBA as the amount agreed upon each year on which to base the salary cap-

 

(xii) Cancelled Games. If one or more weeks of any NFL season are cancelled or AR for any League Year substantially decreases, in either case due to a terrorist or military action, natural disaster, or similar event, the parties shall engage in good faith negotiations to adjust the provisions of this Agreement with respect to the projection of AR and the Salary Cap for the following League Year so that AR for the following League Year is projected in a fair manner consistent with the changed revenue projection caused by such action.

[Augie]

3 hours ago, Tuco said:

 

All the wiggle room they need exists. There is no force mejeure clause. But there is a clause that says if there is a significant cap drop because of missed games then both sides are bound to work out an agreement that is fair to both sides. Everything after that is speculation because nobody knows right now exactly what's going to happen yet. When it does happen then they will have solid numbers to work with. And yes it's been discussed and seems most likely that any significant drop in next year's cap would most likely be agreed to spread it out over several years.

 

Now if the season were to be totally cancelled that would certainly be an obstacle. Without a force mejeure clause it will become an ugly battle with most likely protracted court decisions, etc. But again, nobody knows. There are no simple answers to these questions right now. Wait and see is pretty much all we can do at this point.

 

Here's pretty much the only language in the CBA, and it leaves a wide open field of what ultimately may or may not happen. 

NOTE: The term "AR" refers to "All Revenue" as defined in the CBA as the amount agreed upon each year on which to base the salary cap-

 

(xii) Cancelled Games. If one or more weeks of any NFL season are cancelled or AR for any League Year substantially decreases, in either case due to a terrorist or military action, natural disaster, or similar event, the parties shall engage in good faith negotiations to adjust the provisions of this Agreement with respect to the projection of AR and the Salary Cap for the following League Year so that AR for the following League Year is projected in a fair manner consistent with the changed revenue projection caused by such action.

 

Thanks! There are so many aspects to this and so many unknowns. I guess all we really know for sure is that a bunch of attorneys are going to make a fortune while they work to figure this out.  It’s difficult to even guess at this point, since there is no way of knowing how far this season gets, or if it even starts. With so much money at stake, you know they’ll give it their best shot.