Cap Space - Tre White Contract is on the books!

[ColoradoBills]

1 hour ago, Tuco said:

They have already agreed to that big of a drop in cap. Most businesses and employees in America have lost wages of some sort this year because their employer lost wages. The CBA is very specific in how the cap is tabulated, and the players voted to keep their salaries the same this year even though league revenue is way down. The agreement they made was that revenue (and subsequent salary drop) will be made up next year (and possibly beyond).

 

The cap is based every year on the projected revenue for the year, and then there is an adjustment made every year to reflect any difference in the projected revenue to the actual revenue from the previous year. So it's very possible the cap next year may be $200 million. But then there will be a huge adjustment because the players voted, and the NFLPA agreed, that instead of taking any kind of pay cut this year, they would proceed as normal with the cap, with the exception that any adjustment that makes the cap lower than $175 million in 2021 will be pushed even further into the next year(s).

 

So what happens? The NFL has a huge difference in revenue this year compared to what was projected, and subsequently the players are getting a much larger portion of revenue this year than they should according to the CBA. How much revenue difference? Well it's hard to say, but using some rough math we can say conservatively there's about 60,000 tickets not being sold every game. So let's say $100 per ticket average, times 60,000 = $6,000,000 times 8 home games per team = $48,000,000 times 32 teams = $1,536,000,000.  Add in loss of parking, concessions, luxury suites, 12 playoff games and the Super Bowl, etc., we can easily see a revenue shortfall of , let's say, $1.8 billion. 

 

Anybody who thinks the league is going to ignore that kind of money in the name of keeping their salary cap flat is delusional. So let's take the players'  roughly 48% of $1.8 billion, that's $864,000,000 in total reduction that needs to be rectified in the 2021 cap. $864,000,000/32 teams means a reduction adjustment of $27 million in cap for each team. So even if next year's cap does go up to $200 based on next year's revenue projections, it will then have $27 million subtracted (or actually $25 million so it doesn't go below $175 in 2021 and the rest pushed back another year).

 

Now people saying this isn't going to happen because it will create cap hell for a lot of teams don't seem to understand, it's already been bargained and negotiated. It's what they were doing right before training camp while they were hashing out all the other COVID rules. And all teams are expecting it to happen. It's been agreed to by both sides already. And unless there's some changes in the amount of fans allowed into games it's going to be ugly next year. Everybody knows it. The owners aren't stupid when it comes to money, and they were actually pushing for the floor to be $165 million next year. There's a reason for that. They know how much revenue they're losing. 

 

People need to stop thinking the league will ignore around $1.5 - $2.0 billion in lost revenue in the name of keeping their salary cap flat. They've already made that decision.

 

 

 

Thanks for doing some napkin math Tuco!  I agree your numbers are surprisingly in line with the 175 million 2021 numbers.

What may happen as the year goes on is revenue is realized for other sources and that the 25 million projected hit is lessened.

 

It's so up in the air as to what % of fans may be allowed in the months to come plus other revenue streams not privy to us peons.

I am hoping the 175 can be boosted to 180 or so.  It would lessen the blow.