As you may very well know, 2020 hasn’t been a normal year. Just like our personal lives have changed due to the current coronavirus outbreak, so has the sports world. Right now, few sports are back in action and none of the major sports leagues are back in the United States. And as far as changes go, we’re still trying to figure out what will happen and how it will happen.
For instance, right now MLB is trying to reach an economic agreement with its ballplayers since league revenues will take a hit because fans won’t be able to attend the stadiums if the season starts. Although baseball is aiming to start in the summer instead of the fall, one has to question if fans will be in attendance when the NFL kicks off in September.
If there are none, one has to wonder what will happen next for the NFL? More specifically, what will happen to its salary cap?
Things clearly won’t remain the same. Heck, earlier this week, reports emerged on the league’s teams agreeing to raise their debt limits because of the financial hit they might be forced to take.
The NFL economics work on a revenue-sharing system. That’s how the salary cap is determined every year. Based on the league’s revenue, 48% of the money goes to the players (according to the new CBA, with the percentage set to increase when a 17th game is added in the near future).
That means how much the league earns impacts the salary cap every year. That’s why it’s continually increasing and why top players get more money than the ones who signed contracts before them. More money for the owners means more money for the players.
With new TV deals on the horizon and a new CBA in place, the salary cap was expected to grow drastically in the upcoming years. But the current contingency might alter that quit a bit. While the league gets most of its money from TV broadcasts, tickets, beer, and food make up for a significant amount of their earnings.
If you look at professional basketball, you’ll see their CBA has a clause that protects the league from “force majeure” situations. This means if something beyond the control of the parties occurs, such as a pandemic, the NBA can ask players to take a pay cut.
This isn’t included in the NFL’s CBA which likely means the NFLPA won’t be accepting any owners’ proposals for players to take less money.
By now, we’ve talked about Dak Prescott’s negotiations with the Dallas Cowboys a lot. Since Dak is aiming to become the highest-paid quarterback in the league and has been franchise tagged, a lot of factors come into play.
But maybe we haven’t talked about the current COVID-19 as an important X-factor.
With the first $40M per year quarterback about to arrive at the NFL in the shape of Patrick Mahomes or maybe even Deshaun Watson, we need to question if that will be at all possible in 2021 when the salary cap would take a considerable hit if fans are not in the stands this fall.
At a time where Dak Prescott seems to have the leverage in his current negotiations with the Cowboys, the front office could be benefited by the uncertainty of next year’s salary cap before signing Dak to an extension.
Of course, the league and the player’s union could reach an agreement due to the extraordinary circumstances that are upon uns to keep the salary cap from being reduced. But as it seems to be the case with everything related to COVID-19, there’s no way of knowing what will happen.
For now, all we can do is be patient and be on the lookout. And of course, stay at home. Do that.