Tag: floor

What does NFL’s new salary cap floor mean for the Chiefs?

We’re getting closer to where Veach wants the salary cap to be for 2021.

Each year the NFL’s salary cap is determined based upon the profit and net loss of the league from the previous season. The NFLPA and NFL agreed to a lessened $175 million salary cap floor ahead of the 2020 NFL season to compensate for any profit losses associated with the COVID-19 pandemic. The NFL and NFLPA recently renegotiated that number to $180 million before doing final audits to reach a final salary cap number for the 2021 season.

So what does this all mean for the Kansas City Chiefs as it relates to the 2021 NFL season? Well, it’s certainly good news.

According to estimations based on a $180.5 million salary cap, OverTheCap.com projects that the Chiefs will be $23 million over the cap. That means they’re still going to have to make some cuts and move some money around in order to get under the cap by March 19. That was always going to be the case with any lessened salary cap. This just provides them with some extra buffer room. The fact that this number will very likely go up and could reach or exceed $185 million is very good news.

Brett Veach spoke on the challenges of navigating the unique salary cap situation ahead of the 2020 NFL draft. The team has a number of different strategies and which one they employ this offseason will be based on the final salary cap number.

“We’ve even talked about having different game plans,” Veach told reporters. “We know it won’t be lower than $175M, but it could anywhere from $175 to $195 million. I don’t think it’ll get much higher than that, but even from $175-195, it’s a big deal for us. So that’s challenged and fortunately, I have some good people that I work with, Brandt Tilis and Chris Shea. We’ve been going through some different models. A few at $175M, a few $180M, a few at $185M. . . So, they tell me anything over $185M and we’re in pretty good shape. But we’re prepared if it’s $175M too.”

Right now, it looks like the league is approaching that sweet spot where Veach and his staff all want to be at for the 2021 NFL season. This will allow them to keep building the roster for the now and the future without any financial setbacks. Of course, this is all still dependent on where that final number lands, but the increase in salary cap floor certainly has people around the league feeling a lot more optimistic about 2021.

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What a new $180 million salary cap floor means for the Detroit Lions

Examining what a new $180 million salary cap floor means for the Detroit Lions’ 2021 offseason.

Per the NFL/NFLPA collective bargaining agreement, the NFL’s salary cap is determined based on profit/loss from the previous season. In 2020, the salary cap was $198.2 million, but with the COVID-19 pandemic negatively impacted the league’s profitability, the salary cap is expected to see a significant drop.

The NFL is still in the process of determining the final 2021 salary cap, but in a new memo sent out to NFL clubs, they announced that they have raised the cap floor from $175 million to $180 million.

This is still a sharp decline, but the league said it will continue working on ways to increase this number — they are negotiating new television contracts and auditing their final 2020 revenue figures — before the league’s new year begins on March 17th.

The Lions have also rolled over $12.8 million from last season and will put that towards their available cap room in 2021, meaning their cap floor is actually $192.8 million.

Currently, the Lions have $185.2 million invested in 53 players and are under the requirements for beginning the new year, but once the new year begins and the Matthew Stafford/Jared Goff trade becomes official, the Lions cap will see a significant change.

As noted when examining how the trade would impact the Lions cap, Stafford’s $33 million comes off the books but he leaves behind a $19 million cap hit. Then factoring in Goff’s new contract cost of $28.15 million, and the Lions are going to take on an additional $14.15 million in cap charges once the trade happens.

That means, the Lions’ new cap number will be approximately $199.35 million and they will be roughly $6.5 million over the allowed allotment.

$6.5 million over the cap is not ideal, but half the league is in a worse situation than the Lions — including all three teams in the NFC North — and the Lions seem poised to clear more cap space by releasing players with bloated contracts.

With cuts coming and the League continuing to attempt to raise the salary cap floor, the Lions should find themselves in a much better cap situation come mid-March.

What does a 2021 salary cap floor of $175 million mean for the Lions?

The NFL salary cap floor has been set at $175 million for the 2021 season. But how will that impact the Detroit Lions? General manager Bob Quinn will have a tough task ahead of him preparing for an unanticipated $23 million drop in available funds, but due to good planning, they are prepared.

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.

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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