Despite Salary Cap Restraints, Free Agency Still a Buyer’s Market

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What do COVID-19 and the 2011 Collective Bargaining Agreement have in common? These are the two reasons the NFL salary cap has decreased year-over-year since 1994 when the cap started. Let’s rewind a bit and analyzesome history as the 2011 decrease is very dissimilary than what is apparent a decade later. And, yes, thank you covid.

What Was the Deal in 2011?

In 2011, when the league decreased the salary cap from $123M in 2009 to $120M in 2011, several reasons cause an asterisk this figure. Foremost, that isn’t a typo, recall 2010 was an uncapped year.  Two NFC East teams were sanctioned for violating unwritten rules.  If that sounds like a miscarriage of justice, it was, but that is a different story.  The new collective bargaining agreement dropped the league salary cap by three million, but it did something more constructive — it required rookie contracts to follow a simple algorithm.  Prior to this correction, the teams that drafted players in the Top 10 or so picks would have to ransom the right to get a top-tier talent out of their college uniform.  

While this was technically a decrease in the salary cap, this significant difference in the rookie contracts resulted in the new reality — there was more cap space available for the tenured veteran players. So, this was a decrease on paper.  The actuality was that each team had more to spend on their veterans than they previously did.

The Present Conundrum 

And what is going on right now? The challenges and limitations of a pandemic season resulted in considerablerevenue decreases for each team across the league. Teams usually, of course, make a significant amount of revenue in ticket and ancillary sales. With the diminished attendance ranging from zero (Los Angeles and Las Vegas) up to 20,000 folks in the Dallas stadium toward the season’s end, an economic reality lurks. Those attendance figures don’t keep the lights on with regard to the bargaining agreement player share. 

The 2020 cap space was at approximately $198M. Several sources including Over the Cap are now reporting that 2021 is going to be slightly better than they thought –$180,500,000. That is nearly 9% less than of 2020. Despite that cringeworthy loss, there are still 19 teams that are above water in salary cap room in the mere days when Floridians has not yet fully recovered from theirchampionships hangovers. 

The bottom three in the “above water” category are barely hanging on, ranging between $1.1M to $6M. The Giants, Seahawks, and Lions would not be able to afford their draft pick salaries, let alone any free agency moves.  

When factoring in those who are barely above water, the league is split in half (almost). Some teams like the Jaguars, Colts, and Jets could afford to do serious spending ranging between $67 and $77M of cap room. But teams are on the opposite end of the spectrum. You’ve likely heard the Saints are in dire shape with $74M in deficit, but they are joined by the Eagles ($49M), Falcons ($31M), and Steelers ($30.6M). Each of these teams seemingly built their contracts on the anticipated 2021 cap of $211M. 

Would it surprise anyone that Drew Brees isn’t really the problem with the Saints cap? His retirement would mean very little to their predicament as six players are consuming more salary-cap money in 2021 — including Taysom Hill. If there is a word of advice for the Saints players, consider widespread contract restructures or take your chances in the free-agent market at your own peril.  

But Still – a Buyer’s Market

Why is 2021 free agency a buyer’s market?  

This is a combination of two likeminded concepts. First, the reduction in the salary cap reduces spending cash everywhere.  The Jaguars went from anticipating over $100M to $77M.  While most don’t get to swim in that deep end of the pool, one can imagine going from a $1000 paycheck to a $770 paycheck. Some costs look differently when slicing nearly 25% off.

The second issue is that the reduction in salary cap money plopped some team’s situations from bad to critical.  If the cap was increased to the expected $210M area, the number of teams underwater would decrease from 13 to four. 13 teams are needing to clear room on their salary cap, so there will be many salary-cap casualties. Good players who negotiated great deals will find themselves all free agents looking for new homes.  

As we look forward to a more normal year, one can only feel for the players who hit one of their two or maybe three free-agency opportunities this year. A player could put up career numbers in their position and still end up taking a pay cut in this circumstance.  Players, teams, and agents alike, this is not your year to push the limits of your negotiations. 

Be humble, be reasonable, and know the market that exists.

This market could make a world of difference to those 10-win teams who found themselves outside the playoffs or those playoff teams who exited in the first round.  The patient general managers could find rare value in this opportunity.  Hopefully, the players can see the opportunity before them as it is — a chance to win. And an opportunityto sign a short-term deal to weather this market and perhaps exhibiting patience for the next gig. Minnesota