On Friday, the NFL and NFLPA reached an agreement on an addendum to the collective bargaining agreement that puts the league on schedule to have training camp and the regular season start on time in 2020.
One of the key decisions made was how to distribute the anticipated losses in revenue from the 2020 season due to the COVID-19 pandemic.
This is both an NFL and NFLPA issue mainly because the league salary cap is determined based on profit/loss from the previous season. With massive losses expected in 2020, the 2021 salary cap was estimated to drop roughly $70 million — which would have been detrimental to how the league operates in the offseason.
In order to soften the impact from the 2020 losses in revenue, the NFL and NFLPA agreed to spread the losses out over a four year period (2021-2024), keep the 2020 salary cap at $198.2 million, and set a floor for the 2020 salary cap at $175 million. If the 2020 losses aren’t as great as anticipated, then the 2021 cap could see an increase.
By setting the floor for 2021, it will allow general managers the ability to begin planning for the future now. That could mean teams will be spending less money in 2020 in order to gain available rollover funds for 2021, targeting contract extensions with lower cap hits in the next few seasons, and even contract restructuring to shift player payments around.
This will be a challenging task for about half the league.
As of today, if every team’s 2020 salary cap space remained the same, they were able to roll over the extra space in its entirety, and the 2021 salary cap stayed at an estimated $175 million, eight teams would open the offseason over the cap — including the Vikings and Bears — while another eight would have less than $17 million available to spend — including the Packers.
If the 2021 NFL Salary cap is set at $175 million and every team is able to rollover all of their current 2020 cap space, here is a look at where every team in the league could enter the offseason.
(data gathered at https://t.co/ZzzOrFvbmu) pic.twitter.com/y7t8QMIV6J
— Erik Schlitt (@erikschlitt) July 25, 2020
The Lions are right in the middle of the pack. They currently have 44 players signed for through the 2021 seasons at a cost of $175 million, but with an opportunity to roll over nearly $23 million from 2020, they are in decent shape before making any future contractual decisions.
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This situation should not prevent the Lions from handing out contract extensions to current players like Kenny Golladay, Taylor Decker, or Matt Prater, but it could preclude them from signing many more free agents in 2020.
This will be an important year for any Lions player making more than $3 million per season in 2021, save the ones with lots of guaranteed money left on their deals. Players like Justin Coleman, Desmond Trufant, Jesse James, Nick Williams, Danny Shelton, Chase Daniel, Christian Jones, and Joe Dahl will need solid performances in 2020 to justify their 2021 deals. While players in contract years like Marvin Jones Jr. Danny Amendola, Romeo Okwara, Duron Harmon, and Jarrad Davis will be playing for future contracts.
The potential losses from the 2020 season will likely change the way teams approach player contracts over the next half-decade but with the financial parameters being established now, general managers like the Lions’ Bob Quinn can get to work on setting their team up for the future.
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