Shrinking NFL Salary Cap Will Create Wild 2021 Offseason for Teams, Free Agents

Brent Sobleski@@brentsobleskiNFL AnalystFebruary 21, 2021

A general view of the NFL shield at midfield during an NFL football game between the Tampa Bay Buccaneers and the New York Giants, Monday, Nov. 2, 2020, in East Rutherford, N.J. (AP Photo/Adam Hunger)
Adam Hunger/Associated Press

Financial realities are setting in for NFL franchises after a pandemic-stricken season brought revenue losses that will affect each organization's roster-building capabilities.

"Biggest story right now is how low the salary cap will go and when will teams find out," an anonymous AFC executive told Sports Illustrated's Albert Breer earlier in February.

The league clarified the situation this past week when it announced the new agreed-upon salary floor is $180 million. The updated number provided some relief after the league and the NFLPA originally agreed on a salary floor of $175 million in July ahead of expected revenue losses during the 2020 campaign.

For context, the 2020 salary cap was $198.2 million. The cap rose by at least $10 million during the previous seven offseasons. General managers and decision-makers became accustomed to seeing a bump to their financial flexibility and operated as such. This offseason will be very different.

A slew of contract restructures should be expected. Veterans will almost certainly be more likely to take short-term or even one-year deals in hopes of cashing in down the road. From a bigger point of view, a disappearing middle class will likely result from this salary step-back.

Massive adjustments are forthcoming.

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While the new floor provides a semblance of stability, the teams still don't have the actual cap number for the 2021 campaign. The figure could land somewhere between $180 million and $190 million, depending on ongoing television negotiations.

Favorable terms will help the owners offset their losses from the previous season. At the same time, the league must balance those losses with the NFLPA's revenue-sharing, set at 48 percent, to make sure this year's number doesn't take too much from the future.

Basically, the owners will make up for lost revenue eventually—whether it's a massive short-term salary drop or spread over multiple seasons. If the losses exceed the upcoming fall in salary-cap availability, those numbers will be made up during the following campaign or two. So, the massive bumps previously seen may not come back for some time.

Once the salary-cap floor became known, the NFLPA also announced each club's rollover cap space from last season, which can be applied to the 2021 bottom line.

Based on projections, 11 teams are in the red at the potential $185 million mark, according to Spotrac, before making the necessary moves to get under the salary cap by the start of the new league year on March 17.

"It's a real concern," a league exec who manages contracts and the cap for a team told ESPN's Jeremy Fowler and Dan Graziano. "There are major impacts teams are gonna feel over the next month that they aren't used to."

Leon Halip/Associated Press

The impact is already being felt as multiple squads are trying to shed bloated contracts.

The Green Bay Packers released linebacker Christian Kirksey and offensive tackle Rick Wagner six days after left tackle David Bakhtiari restructured his record-setting deal to create cap space. The Eagles did more than trade quarterback Carson Wentz; they cut veteran wide receiver DeSean Jackson. More moves are forthcoming from both organizations since each is still in the red.

A game of chess will be played in the coming months as 32 general managers maneuver to achieve offseason checkmate.

An NFC executive spoke of "how open-minded people are to trades to create cap space," per Breer. "People think guys are gonna just get cut and signed by someone else with cap space. The thing is, most of the teams that have space have just enough cap space to sign their own guys back. So I think you'll see teams moving guys in trades, so guys stay on current contracts."

Players have to look around the NFL landscape and realize a restrictive market will decrease the value of proven veterans who aren't considered top-tier free agents.

Projected Available Salary Cap Space (2021)
RankTeamAvailable Space
1.Jacksonville Jaguars$79.6 million
2.New York Jets$75.5 million
3.New England Patriots$68.7 million
4.Indianapolis Colts$53.9 million
5.Cincinnati Bengals$45.6 million
6.Washington Football Team$41.9 million
7.Denver Broncos$39.7 million
8.Miami Dolphins$35.6 million
9.Carolina Panthers$35.2 million
10.Los Angeles Chargers$34 million
Spotrac

"If you have high-earning veterans and you aren't proactively approaching teams about restructuring deals [this offseason], you are doing a disservice," an anonymous NFL agent told Fowler and Graziano.

A team can entice well-paid, established players to decrease their salary-cap charges by creating new guarantees in the deal or adding an extra year or two for stability. It's a much better alternative to testing the open market, where teams won't have an abundance of spending money.

A wave of movement could be coming as general managers tinker while trying to dump individuals who either A) don't fit into the organization's plans or B) aren't willing to renegotiate.

Generally speaking, the veteran trade market has been undervalued for years. More often than not, a team can acquire an instant-impact contributor at a more advanced age for a much lower price compared to the promise of future returns in deals that include draft picks or players entering their primes.

For example, the Baltimore Ravens acquired defensive lineman Calais Campbell—a six-time Pro Bowl selection—last offseason for a fifth-round draft pick.

The overall value of this group could decrease even further as some squads look to dump salary. Shrewd general managers will take advantage of the opportunities to help their team and locker rooms in the short term.

Terrance Williams/Associated Press

For those who do test the market, one of two possibilities seems likely, both for high-end players and those in lower tiers.

Top targets such as quarterback Dak Prescott, edge-rusher Shaquil Barrett and wide receivers Allen Robinson II and Chris Godwin will receive top-dollar deals if they're not placed under the franchise tag. Once teams are past the first wave of free agency, the tune should drastically change.

Those who don't receive high-end offers will either see their value diminished well below previous market value or sign one-year contracts to reenter the market in a year.

As a result, the difference between the league's highest-paid player at each position and the next tier should experience an expansive widening in valuation, thus wiping out the league's middle class. Those viewed as difference-makers will get paid. Those who aren't probably won't.

How each franchise and individual reacts to these circumstances will vary. Organizations with maneuverability may be more aggressive in seeking team-friendly contracts. Others could search for short-term fixes in hopes of addressing problem areas once more financial clarity comes.

Whatever the case, the NFL isn't going back to its same old operating procedure. The ongoing pandemic made sure of it.

The navigation of these unsettled waters will create a course correction for well-run organizations and those not prepared for this moment. Adjustments to the evolving market from both franchise and individual perspectives will determine which teams emerge as successful operators in the coming years.

                     

Brent Sobleski covers the NFL for Bleacher Report. Follow him on Twitter, @brentsobleski.