I would not want to be general manager Kevin Colbert right now.
To tag Bud Dupree, sign three free agents (Stefen Wisniewski, Derek Watt, Chris Wormley) and still be cap-compliant in 2020, the Steelers pushed $21 million of salary into the next season.
Pushing money from one year to the next is nothing new in the NFL and especially not for the Steelers. It’s part of the salary cap game to restructure contracts to be at or under the cap without players they need and want winding up casualties.
However, that money was pushed with the understanding that there would be a substantial cap increase in 2021.
Of course, no one knows the effect that the COVID-19 pandemic will have on the NFL and its salary cap just yet, but the potential implications paint an ugly picture.
The current salary cap is set at $198.2 million. Historically, the cap has increased by $10 million or more per season. Per Over The Cap, the projected salary cap for 2021 is an estimated $215 million. But that projection is contingent on the league operating as usual with a full 17-game schedule and stadiums at full capacity.
The salary cap for the following season is based on the income that the teams earn during a league year. While previous years’ salary caps have been limited to defined gross revenues (money earned from national television contracts, ticket sales, and NFL merchandise sales), the new collective bargaining agreement was expanded to include all revenues. All revenues incorporate ticket sales, luxury box suites and premium seating, local and national broadcasting royalties, concessions, parking, local advertising, stadium leasing, and merchandising.
On a recent episode of The Adam Schefter Podcast, Schefter broke it down like this:
“Now I want people to think about this going forward — because it is something that the NFL and the NFLPA soon is going to have to be thinking about — and that is if there are no fans in the stands this season that would equate essentially to about on average roughly $100 million less in revenue per team for each of the 32 NFL teams in the NFL. If we multiply that $100 million by the 32 we get $3.2 billion in lost revenue, and why is that a big deal? Because the salary cap is based off the total revenue that comes in…
“So if there is $3.2 billion in less revenue, which is a rough number… but well within the range that is expected and as other people pointed out there are other financial losses as well, we are looking, potentially, at the salary cap dropping in 2021 by $70 to $80 million.”
As Schefter speculates, if games are played without fans in the stands or only a percentage of fans, revenue will be significantly impacted, and the salary cap for 2021 could take a massive hit. An even worse scenario is if the season is canceled. I’m not going to pretend like I know how players’ 2020 salaries would be affected if no games are played and how that even would roll into 2021. But I do know that the Steelers are in a heap of trouble if the salary cap is reduced in 2021.
Let’s say that the cap drops by $80 million in 2021. That would put the salary cap at roughly $118 million. That’s still a ton of money, right? Currently, the Steelers total cap liabilities are at $187 million for next year.
Gulp.
And that’s without taking into account the money they will need to pay to any players they want to save from becoming free agents next year. Among the laundry list of players are unrestricted free agents JuJu Smith-Schuster, James Conner, Cam Heyward, Bud Dupree, and Mike Hilton.
I’m just glad I’m not in Colbert’s shoes.
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