Report: NFL Salary Cap could drop by $70 million in 2021 (1 Viewer)

[St. Geezy]

Ghost ... Not happy I know that

My mother would watch this movie at least 5 times a year while I was growing up. I'm ashamed to say I have the dialogue from several scenes memorized just merely from hearing it on in the background every so often.

 

[BoNcHiE]

I thought the cap was based on TV contracts, and that was shared with the players.?
Typical corporate model. Tell the labor that you can't pay them the same amount anymore.

This isn't difficult. The salary cap is literally a set portion of revenue divided by the total number of teams. That set portion, as agreed to contractually, has not changed. What this article is doing is projecting a huge drop in revenue, thereby bringing the cap down by $70M. They could be off by many millions in that projection.

There will be little to no revenue from stadiums, events, and merchandise this year. There will be a decrease in TV revenue as well because ads do not bring the same amount of money in during hard economic times. If out of conference games are cancelled, it gets even worse.

 

[BoNcHiE]

They share the revenue based on the CBA they negotiated. It doesn't only work that way when revenues rise. They get a set percentage of all revenues because they wanted to share in the increasing revenue. This is why the owners want to escrow some of the upcoming season salaries to offset the losses and soften the reduction in the cap so that the players do not suffer all at once.

Exactly. Players wanted to have revenue share so that they were essentially co-owners in the payment scheme. They can't now complain when salaries drop because that revenue share drops. They certainly weren't complaining when that revenue share was skyrocketing every year until now.

 

[Saint Jack]

This isn't difficult. The salary cap is literally a set portion of revenue divided by the total number of teams. That set portion, as agreed to contractually, has not changed. What this article is doing is projecting a huge drop in revenue, thereby bringing the cap down by $70M. They could be off by many millions in that projection.

There will be little to no revenue from stadiums, events, and merchandise this year. There will be a decrease in TV revenue as well because ads do not bring the same amount of money in during hard economic times. If out of conference games are cancelled, it gets even worse.

I don’t think it’ll hit the TV revenue that hard in my opinion. Any games this season will have good ratings. The League doesn’t have to worry about that.
In this time, the networks need the NFL more than ever. There is an article how streaming has affected the networks right now. Near the end, it states that the networks are prepared to pay more in the next contract. I’ll try and find it.

https://www.google.com/amp/s/www.wa...tworks-nfl-season-coronavirus/?outputType=amp

 

[BoNcHiE]

I don’t think it’ll hit the TV revenue that hard in my opinion. Any games this season will have good ratings. The League doesn’t have to worry about that.
In this time, the networks need the NFL more than ever. There is an article how streaming has affected the networks right now. Near the end, it states that the networks are prepared to pay more in the next contract. I’ll try and find it.

https://www.google.com/amp/s/www.washingtonpost.com/sports/2020/07/02/tv-networks-nfl-season-coronavirus/?outputType=amp

We'll find out. It's not just about ratings. It's about ad revenue. Go ask someone in internet marketing right now if their ad revenue for the same ads have taken a hit and they'll probably tell you yes. The same dynamics hold true for TV ads. You can have the same 100 people watching something, but if spending is down, advertisers don't pay as much for ads. But that might be gone by September as consumer spending rebounds.

But my post is still 100% correct. If you are right and TV ad revenue takes no hit at all, then the salary cap will not drop because of that. That article is just making a projection. It's all an equation at this point. It's not evil, corporate owners slashing revenues for players.

 

[texasjefe]

Hmm, seems like the NFL has a dead cap number for cutting itself.

 

[BoNcHiE]

Yikes!!
Dak should have signed that deal.

Yep. Said it like 3 months ago. There's a lot of players who should have not held out for a few extra million. When the cap goes down, all salaries signed under that cap take a hit because the minimum salaries will not change. It all comes off the top.

This is also why signing Mahomes to a 12 year deal is risky. What if the cap is depressed for 3-4 years? You are talking $10-15M a year each team may not have to spend and Mahomes' number is already locked in. They'll have the best QB in the game. But they will lose a lot of players going forward. We've seen how that worked out for us at times.

 

[No2DC]

We'll find out. It's not just about ratings. It's about ad revenue. Go ask someone in internet marketing right now if their ad revenue for the same ads have taken a hit and they'll probably tell you yes. The same dynamics hold true for TV ads. You can have the same 100 people watching something, but if spending is down, advertisers don't pay as much for ads. But that might be gone by September as consumer spending rebounds.

But my post is still 100% correct. If you are right and TV ad revenue takes no hit at all, then the salary cap will not drop because of that. That article is just making a projection. It's all an equation at this point. It's not evil, corporate owners slashing revenues for players.

It the rating for the UFC last weekend are any indicator, TV viewership should be higher if they can get back on the field. In terms of consumer spending, I don't think it's going get better with states reclosing and stimulus checks running out the consumer side it's not looking too good.

 

[GrayMatter78]

I don't see how they could do that. It would cripple about every team.

 

[onanygivensunday]

I don't see how they could do that. It would cripple about every team.

They'll borrow from the future to smooth the curve. It's the only practical solution imo.

 

[BoNcHiE]

I don't see how they could do that. It would cripple about every team.

Spread it out over four to five years is the only way.

 

[Clintonrebel]

I would just keep the cap the same next year. And every year until the 70mil is made up.

That's fine....where you gonna get the money?

The salary cap comes down because revenue comes down. The money has to come from somewhere. Just for the Saints, consider 70,000 seats times $100 times 10 and that's a $70 million hit just from ticket sales in a season, and I suspect our average seat is more than $100. That's actual real money lost....assuming no fans this year.

 

[Floridalsusaintsfan]

Exactly. Players wanted to have revenue share so that they were essentially co-owners in the payment scheme. They can't now complain when salaries drop because that revenue share drops. They certainly weren't complaining when that revenue share was skyrocketing every year until now.

I think it's only going to affect new contracts and players getting released. The Saints will be 65 mil over the cap and trying to resign Lattimore and Kamara. There will be drama for sure.

 

[Saint Greg]

That's fine....where you gonna get the money?

The salary cap comes down because revenue comes down. The money has to come from somewhere. Just for the Saints, consider 70,000 seats times $100 times 10 and that's a $70 million hit just from ticket sales in a season, and I suspect our average seat is more than $100. That's actual real money lost....assuming no fans this year.

They're billionaires. They can loan themselves 70 million dollars.

 

[SAINTSFAN]

They're billionaires. They can loan themselves 70 million dollars.

They didn't get that way by giving away millions, especially when they are contractually bound by a CBA.