Teams need to win low cap creatively
After weeks of number-crunching and haggling, NFL officials Wednesday made the much-dreaded announcement that the salary cap for the 2021 season will stand at $182.5 million.
The newly set spending limit represents a plunge of nearly $16 million from last year’s cap figure of $198.2 million. The NFL finds itself absorbing another blow dealt by COVID-19, which prevented many teams from hosting fans all season and limited other teams to only partial attendance.
The news confirmed fears across the league that many teams will have to scramble to unload tens of millions of dollars in salaries to ensure they are under the cap by the start of the league year at 4 p.m. ET March 17. Now the front offices must make difficult decisions on what key players to cut and what contracts they must restructure to provide financial flexibility. At the same time, some must accept that their chances of contending in 2021 might have unexpectedly taken a serious hit.
“It’s one of those things you wish we knew that a year ago,” Bills general manager Brandon Beane recently told reporters. “Maybe we wouldn’t have made every move we did. Maybe we wouldn’t have been as aggressive in some areas.”
Beane isn’t alone in his assessment. Generally, when constructing teams and handing out contracts, teams do so with an eye both on how those deals impact their budgets both immediately and in the next several years.
But no one could have anticipated ex
actly what kind of an impact COVID-19 would have on the NFL. This time a year ago, the country was going into lockdown and sporting events were getting scrapped. But as free agency kicked off, the NFL still had a six-month cushion before games began, and many assumed the country would have returned to normal by then. But as the games took place in empty or sparsely filled stadiums, the NFL lost an estimated $3 billion of its usual $16 billion revenue.
The previous year’s revenue determines the salary cap, but the NFL and NFL Players Association had agreed last fall that the salary cap for 2021 would not fall below $175 million and they would split the losses of 2020 over multiple seasons. Last month the NFL announced the cap would be no less than $180M, and many teams, players and agents hoped it would approach $190M.
So a year after they structured contracts with an initial anticipation of operating under a cap of roughly $210M, teams now must figure out how to field rosters using about $28 million less.
“That’s a dramatic departure from what the expectations were going to be prepandemic,” Joel Corry, former NFL agent-turned-CBS Sports analyst, told USA TODAY Sports. “The cap had been going up 5 to 8% each year, so $210 (million) was a reasonable estimate. … Nobody contemplated the cap taking a steep drop like it is going to this year.”
A number of teams would have found themselves in bad shape even without the depression of this year’s figure. When the offseason began, projections had the Saints $100 million over the cap.
As of Wednesday’s announcement, the Saints had released six players, restructured the contracts of seven players and still found themselves roughly $31 million over the mark, according to OverTheCap.com.
Between now and March 17, the league will see many players released who a year ago would have fallen under that “surprise” cut category. Or teams could try to trade such players. A perfect example is Miami linebacker Kyle Van Noy. Last spring, he signed a four-year, $51 million contract. But now it appears likely he will be either released or traded to help Miami create roughly $9 million in cap space.
The coming days also will feature creative moves by contract negotiators. A move made popular by the Saints in previous years and now catching on among others is restructuring deals and tacking additional voidable years onto contracts to massage salary caps. The Cardinals used this strategy when signing JJ Watt to a deal classified as a twoyear pact that actually pays him for longer.
The NFL and NFLPA “allow the voiding dummy years to be used for proration purposes even though they’re not real years, and they void the last day of the league year or some specified date,” Corry explained. “It’s a legal way to cheat the cap until they close it. I expect a number of the guys you see in free agency signing one-year deals on paper are four-year deals that void to one.”
As Corry pointed out, young players may find it in their best interests to bet on themselves through shorter deals this year. Older players may benefit from long-term security offered by multiple years.
But for now, teams and players will feel the crunch. The show must go on.