A number of people have already reported this number but we did confirm with a source as well that the NFL salary cap will drop from $198.2 million to $182. 5 million in 2021. This is pretty much in line with the $183 million number I mentioned on the podcast this week and is pretty much what most of the cap people in the NFL have been working with. We have adjusted the numbers on the site accordingly but are still working through updating things so just remember that the cap is very fluid right now for each team.
As for the future I just adjusted our cap estimates down to $203 million for 2022 and $225 million for 2022 and 2023 respectively. I know people has said how much lower they expected the cap to be this year had there not been a floor and the working numbers looks to be around $155 million would be the ballpark without the floor. Given typical cap growth rates I think this likely means there is about $30 million or so in losses still unaccounted for.
Generally the NFL does not like large spikes in the cap if they can avoid it so Id back on a 2/3 loss on 2022 and then the balance in 2023. This also ensures that the entire loss is covered in the three year cash spending window teams will begin next week. This is probably important to teams to avoid any kind of big spike in 2023 that could force teams to do deals they do not want to do. I would expect the big growth to come in 2024 which may be a bit of a major reset for the NFL. Of course huge TV increases can change all of this but this seems like a reasonable assumption for now.
This is the first time since 2011 than the salary cap has dropped. The NFL and union did negotiate some things back then to try to lessen the impact but we did see many changes that year for the middle class in the NFL. Teams did benefit from having an uncapped year in 2010 to dump money and spending that year also fell off. This is different in that it was unexpected during the free agency and spring extension periods.
The $182 million salary cap is between where the cap was in 2018 and 2019. However there are fundamental differences now. Minimum salaries are much higher in the new CBA, around $150K per player, and 60% of the NFL plays on those minimums. In addition the rookie pools are going to be based on last years numbers since they can not fall (and will actually increase slightly). The same goes for the restricted tenders though those are much lower in number.
So in terms of working within the confines of the 2020 CBA rather than the 2011 CBA I would say that the effective salary cap is really closer to $170 to $172 million per club once you factor in those other added costs relative to where the cap was two years ago. That is basically 2016 and 2017 levels. So this could be a pretty wild ride as teams work through this.
One thing that is important for players here is to realize that there are all kinds of ways to use cap space. Teams have moved away from all of these things in recent years but you can look at the past to see how teams did contracts to work within the cap. You can even study teams like the Saints and Eagles to see ways for it to work. I think it is important to not just settle for “the cap wont allow it” excuse when there are ways to push for more despite the salary cap.
The bigger question and hurdle will be how do owners approach this. Budgets historically run, for the most part, along cap numbers. Last years average spend per year was about $210 million. If teams plan on slicing $20 to $30 million of actual payroll there is less that you can do to convince teams to skirt the cap. If the money is not there it simply is not there. Looking at the historical biggest spenders is probably a good place for free agents to start to see just what kind of impact is going to come for the 2nd and 3rd tier free agents (we already can see nothing is going to happen to stars).
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.