In a pretty strange move the NFL and NFLPA have apparently agreed to a cap on the salary cap in 2022 with the cap ceiling being set to $208.2 million. I can not recall the NFL ever doing this before. I have seen floors set for the league, such as this past year, but never a ceiling. In terms of planning this really adds an element of certainty that the league has probably not had before.
The league and the union deferred millions of dollars in cap losses from the pandemic to 2022 and possibly 2023 to prevent the cap from falling down into the $150 to $160 million range in 2021. We had estimated that under a normal growth rate adjusted for lower attendance that this would likely bring the cap to about $203 million in 2022 assuming that they put at a pretty good amount of the remaining shortage from 2020 into 2022. The fact that they agreed to this makes me think that the league is now projecting a much higher adjustment for 2021.
The league by rule has to more or less provide a good faith estimate of revenues in the early winter. Those revenue projections become the basis for the salary cap that year. When the cap was set this year the pandemic was still a strong consideration and I would assume that this was reflected in estimates of local revenues that would reflect 50 to 70% capacity. Now the pandemic looks to be in the rearview mirror (knock on wood) and the expected capacity leaguewide should be 100%. That makes this years estimated way lower than expected which could lead to a very big positive adjustment on the cap, one that perhaps far outweighs the remaining negative one from last year.
By making an agreement to “cap the cap” the league maintains cost certainty and prevents a potential big uptick in salaries to meet CBA mandated requirements. Since 2011 the NFL has done everything in its power to maintain very steady increases in the cap. This was in direct contrast to old CBA agreements in particular the 2006 agreement that saw a massive jump in the cap which in turn led to massive increases in player contracts almost immediately. The 2011 CBA prevented that. My guess is this increase, which will be about 14%, reflects the maximum the NFL would want to see the cap increase year over year and will allow them to pay back whatever benefits and other losses were deferred due to the pandemic. It probably gives some insight into what may also occur once the big TV deals begin to roll in starting in 2023.
In any event I think this is a good faith gesture by the NFLPA to agree to this. They and the owners did a fair job of navigating the pandemic and they prevented what could have been a bloodbath among veteran players. This is good news for most teams in the NFL though it also takes out the chance to get a salary cap miracle for teams like the Packers, Cowboys, Rams, Saints, and Texans all of whom project to be over the $208 million cap next year. The NFL is good with these projections and the same way that the floor for 2021 ended up as the cap I would expect them to reach this ceiling next year. We have updated all the cap charges on the site to reflect the salary cap limit for next year.
Jason is the founder of OTC and has been studying NFL contracts and the salary cap for over 15 years. Jason has co-authored two books about the NFL, Crunching Numbers and the Drafting Stage, which are widely circulated in the industry and hosts the OTC Podcast. Jason’s work has been featured in various publications including the Sporting News, Sports Illustrated, NFL Network and more. OTC is widely considered the leading authority on contract matters in the NFL.