Usual talk of long-term contracts missing from NFL offseason
It has been eerily silent on the contract front across the NFL for the past few months. Usually at this time of the year teams would be signing veterans to long-term contracts or, at least, working with agents toward new deals that would be signed in training camp.
But COVID-19 has turned the pro sports world upside down, and hammering out those lucrative long-term deals has been hard because teams simply don’t know what the revenue streams will look like in the future.
Will stadiums be filled to full capacity? Half capacity? No capacity? How much revenue will there be from parking, concessions and merchandise sales?
“We were working on [a long-term deal], and we had to put the brakes on it,” said Greg Diulus, a Pittsburgh-based agent and a partner in Vantage Management Group who has clients throughout the NFL. “Teams want to try and figure
out if fans are going to be in the stands because that’s going to figure into how much money is out there. Next year, we could be looking at a flat cap or one that’s going downward.”
While it’s true the NFL is best-situated among the major pro sports leagues to withstand a season without fans because of its huge television contracts, the lost revenue if fans can’t attend will leave bank accounts a little light.
That won’t affect the 2020 salary cap. It’s set at $198.2 million and won’t change. But what the 2021 salary cap will look like is anyone’s guess. The NFL will negotiate new TV deals that undoubtedly will be worth more than the current ones, but in the short term it might merely offset lost revenue from game days.
According to Forbes, based on 2018 data, the Steelers took in $156 million of their $439 million in revenue that year through tickets sales, parking, concessions and merchandise sales. That’s 35.5% of their total revenue.
The Steelers have a few veterans entering the final year of their contracts, most notably defensive end Cam Heyward and receiver JuJu Smith-Schuster.
In a typical year the Steelers might already have signed Heyward to a new contract. He was named All-Pro twice in the past three years and is showing no signs of slowing down. The Steelers don’t move on from those types of players; they re-sign them.
Heyward, whose current contract pays him an average of slightly less than $10 million a year, is in line for a big increase. Oft-injured Steelers defensive end Stephon Tuitt is making $12 million a year, and he has never made a Pro Bowl, much less All-Pro.
The Steelers know they have to pay Heyward more than Tuitt. Somewhere between $13 million and $15 million a season would be market value for a player of his caliber at his position.
Diulus said one of the reasons contracts have been put on hold is the optics of teams signing players to multimillion dollar deals during a pandemic. He expects star players will still command big-dollar contracts, some of them coming before the season starts.
Inevitably, other players will not. The league’s middle class could bear the brunt.
“The middle-of-the-road negotiations, I don’t think you’ll see many of those,” Diulus said.
But there are no guarantees the Steelers will sign Heyward before the start of the season. The team has a longstanding policy of not negotiating contracts during the season.
If ever there was a year to amend the policy, this is it. The idea behind the policy is rooted in keeping the focus on the team once the season begins. It’s a policy that has served the Steelers well over the years. They sign high-priority players they want to keep before the season begins and deal with the others in the 2½-month period after the season ends and before free agency starts. It might, however, be a smart move to — at the very least — be open to negotiating deals during this season.
It’s hard to imagine the 2021 salary cap increasing much given the current financial climate. For a team such as the Steelers that has a $41.2 million cap hit coming for quarterback Ben Roethlisberger in 2021, it’s problematic.
The Steelers have six other players who will count $10 million or more against the cap in 2021, including Tuitt, Joe Haden, Steven Nelson, T.J. Watt, David DeCastro and Maurkice Pouncey.
And there are more contracts to negotiate on the horizon. The biggest looming deal is for Watt, who has two years left on his rookie deal. He’s expected to become one of the highest-paid edge rushers in the league and stands to double his $10.6 million cap hit in 2021, which is the number for the fifth-year option on his rookie deal.
Minkah Fitzpatrick, who also has two years left on his rookie deal, should command one of the biggest contracts for safeties, too.
Waiting until January to negotiate a contract for Heyward and/or Smith-Schuster would make for a couple of hectic months for general manager Kevin Colbert before free agency begins in
March. But, if some or all fans are allowed in stadiums this fall, the Steelers would have a decent handle on what the revenue streams and cap will look like in 2021.
November or December might be the perfect time to pull the trigger on a longterm deal with Heyward, or maybe even Smith-Schuster. It’s not a matter of the Steelers wanting to keep Heyward or Heyward wanting to remain with the Steelers, it’s simply a matter of understanding the financial landscape of the league — or at the very least approximating it.
The Steelers probably won’t know that in August. They might not even know for sure in November. But they would have a better idea and perhaps a better chance to sign some of their top players.
The Steelers are an organization that builds through the draft. When those draft picks perform well, they sign them to second and third contracts. It’s what has made them one of the more consistent organizations in the league over the years.
Amending the policy on a one-time basis could help the Steelers stay there.