New CBA Approved, Cap Set at $198.2 Million

The new CBA was officially ratified by the slimmest of margins (reportedly by 60 votes) and the NFL immediately announced the new salary cap for the year at $198.2 million for the year. With the CBA drama behind us we now have a new set of rules in front of us and obviously a lot of work to do at OTC. So here are a few quick notes on what the new CBA means for the season.

The biggest change in my opinion is that minimum salaries will raise now by either $90,000 or $100,000 for 2020. This is a massive shift in salary which should mean that teams will now use up an extra $3 to $3.5 million in cap space and their budget for players already under contract. So for teams that are flush with cap room like the Dolphins it does not matter but for teams like the Jaguars operating close to the salary cap it’s a big hit. For teams that often have tighter budgets than most in the NFL (think Colts and Texans) this is an added expense that will likely take money away from use in free agency even if the cap space is not a concern for them. For us at OTC this is a big change as well to many deals so we will be doing our best to reflect these changes shortly. There may be some bumps along the way but we will do our best to make the necessary corrections where I realize that I may have messed up a number.

Similarly rosters will now expand in size for the practice squad and active rosters which are also going to mean added costs for teams. Two minimum salary players in the move from 53 to 55 will be an added $1.2M to a teams budget. PS salaries and squad size also increased but that will be a lesser number. It is important to note that teams wont be able to do the PS raises we often see so that should create a few bucks for some teams.

The new CBA will bring back the option of the post June 1 cut designation. So for teams like the Jets that have made it clear that they are releasing Trumaine Johnson but have not done so officially this was probably the reason for the delay. Players like Johnson can now be designated a post June 1 on the first day of the league year to open up millions of dollars in cap room in June for signing rookies. We will bring back our June 1 options to the cap pages and calculators to reflect the ability to do this.

The 30% rule will be eliminated until 2030 so that will make things much easier on teams to do conversions of salary to bonuses for cap purposes. Previously the 30% rule was going to make that difficult if not impossible and was going to be a burden on some teams.  In addition teams can now structure contracts again that allow for a huge difference in cap hit between year one and year two, giving teams the chance to defer money to the future and “buy on credit”. This is likely why some announced extensions like Austin Ekeler of the Chargers had not yet been officially sent to the NFL and why extension talk in general has been so quiet. This should make it much easier for teams like the Saints.

Void years for cap purposes on 1 year contracts will benefit teams again.  The way the rules stood the ability to do a one year contract with 4 dummy years for cap purposes was severely compromised. Now its back again. For the Saints and Drew Brees this should make life much easier.

Teams only can use one tag, either the franchise or transition, in 2020. This is big news for Amari Cooper and to a lesser extent Ryan Tannehill/Derrick Henry and Shaq Barrett/Jameis Winston. Unless the league delays the franchise period again teams have until the 16th to make a decision. So unless the Cowboys rapidly come to an agreement with Dak Prescott to free up the tag for Cooper, Cooper will likely become the most sought after free agency since Ndamukong Suh in 2015. In an open market there is no reason for Cooper to get less than $23M a year. If he does get tagged he will likely lose out on millions.

Incentives will count as normal this year. Prior to the new CBA teams were going to have to account for all incentives in 2020 rather than just getting an adjustment in 2021. Most likely that would mean teams would hold back an extra $7.5 million in cap room this year so it is more cap space that they can work with.

We will need to update our draft numbers on OTC but quite frankly those are low on the priority list since they will not impact the current cap situation. I have to go over those calculations to best estimate any changes that may exist from what we have online right now.

Teams should now be able to get a cap credit on certain long term players for up to $1.25 million. This may give teams a chance to retain their one or two of their low salary range free agents and not have it hurt their salary cap.

The NFL cap surprisingly was set at just $198.2M which is about $2M less than where we thought it would be when the players were under what was, on paper, a worse CBA. My projection is that it should have grown by $5 million. My only assumption is that the benefits side of the equation went up significantly in 2020 and that hurt the cap portion of the equation. We have adjusted the cap on the pages to reflect the new cap number and will add very rough estimates for 2021 onward soon.

I would think we will have some clarity on whether or not free agency will start as planned on the 18th. Im of the mindset it should be pushed back but I think we will know by tomorrow morning at the latest if it will be pushed back.

Thanks for reading and we will hopefully get these adjustments done in short order. Feel free to point out any changes or mistakes via email or twitter.