Two factors combined Sunday to reduce the amount of cap space available to GM Brian Gutekunst and the Green Bay Packers.
In fact, the Packers might have lost $5 million or more in spending power – unfortunate timing with the legal tampering period and unrestricted free agency set to begin this week.
Why did this happen?
For starters, the NFL and the NFLPA officially agreed to ratify a new collective bargaining agreement (CBA) on Sunday. The deal increases minimum salaries by a significant margin starting this season, which will cut into the salary cap space of every team. All teams have players under contract with minimum salaries. Over the Cap estimates the majority of teams will lose between $3 million and $3.5 million in cap space in 2020 due to boosted minimum salaries, which have to be accounted for on the cap.
Later on Sunday, the NFL released the official salary cap number for 2020, and it’s slightly lower than expected.
According to Tom Pelissero of NFL Network, the cap for all teams this season will be set at $198.2 million. While it’s a $10 million increase on 2019, it’s $1.8 million less than the $200 million projected before the new CBA.
Teams must also consider the impact of increased active roster sizes and increased practice squad sizes. Both will contribute to adding more costs on the cap for teams.
Add it all up, and the Packers lost $5 million or more in spending power as the new league year creeps closer.
Ken Ingalls, a CPA who studies the salary cap, projects the Packers to have roughly $22.5 million in cap space after Sunday’s adjustments. A big chunk of that money will get eaten up by signing draft picks and allocating money for in-season moves and other cap expenditures, leaving the Packers with just over $9 million in true spending money in free agency.
Of course, the Packers can add to that total at any time, either by releasing players (such as veteran offensive lineman Lane Taylor), extending current contracts or restructuring other deals.
Also, the new CBA will allow the Packers to use their preferred format of contract in negotiations. More than likely, any veteran player signed in free agency will receive a decent signing bonus and various roster bonuses, allowing for a lower Year 1 cap hit.
Gutekunst, cap manager Russ Ball and the Packers have work to do this week. They’ll just have a little less cap room to get it done.