NFL will negotiate with the players’ Union to adjust the salary cap for the new season and the future

Although the focus of the 2020 season is on how to play safely and on time, there are still some financial problems to be solved before the start of the season.

Several people familiar with the matter said the NFL and the players’ Union acknowledged that important negotiations would soon be held to decide how to adjust the annual salary cap for the 2020 and future seasons. At present, affected by the epidemic, the game may only be played by part of the audience or empty field, which will bring huge losses to the team. Therefore, both the league and the players’ union need to reach a consensus on each emergency plan.

Although there is no deadline for negotiations, the two sides hope to reach an agreement by the end of July before the start of the training camp. In theory, the two sides can continue negotiations during the pre-season, but it is impossible to start the regular season without an agreement.

At present, the league and the players’ Union are studying how the revenue of each team will be affected and how to determine the loss. That’s one of the reasons why at one point after the start of the free agent transfer period, few players have signed new contracts.

The goal of both sides is to ensure that the wage cap continues to rise or at least remains unchanged. But what if neither is possible?

The league is fortunate to continue to wait and observe the movement of other sports leagues. Major league baseball and the players’ Union have held similar talks recently, but they are far apart.

The salary cap ($198.2 million in 2020) is based on expected revenue, but the NFL also has a mechanism to deal with unexpected higher or lower revenue in the previous season. Therefore, the salary cap in 2021 will be adjusted according to the situation that the number of fans in the new season is reduced or no fans are present at all.

The worst case scenario is that each game is played on a completely empty pitch, and people familiar with the situation expect League revenues to fall by about a third to $4 to $5 billion. In this case, the team’s revenue will be reduced by 400 million to 800 million dollars. However, the final loss may be slightly less than this figure, because some stadiums are expected to accommodate a certain number of fans, but they will certainly not be fully open. However, if there is a huge loss, the salary cap in 2021 will be affected.

But no one wants the cap to go down because it’s going to have an impact on the team and the players. Neither side wants to see pay caps fall sharply in 2021 and then rise sharply after signing a new television contract in 2022. It will make it difficult for the team to operate and renew the contract with the players.

One possible solution would be to borrow money from future TV contracts. The new broadcast contract will usually drive up the salary cap, but in this case, the funds will be used to adjust smoothly and make up for the losses suffered by the team during the 2020 season. The league and the players’ union may also agree to reduce or eliminate additional salaries based on player performance over a period of years.

Some hope the players’ Union will agree to return some of the money this year. This of course needs their cooperation. After the team has paid the retention bonus, training bonus, contract option bonus and signing bonus to the player, if you want to return the fund, you can only start from the basic salary of the player. As the negotiations have not yet begun, it is not known how much the League will ask players to cut their salaries and how they will agree to do so.

The league and the players’ Union declined to comment. But people familiar with the matter said the players’ Union knew the team could suffer huge losses this year and was willing to negotiate with the League to minimize the impact of the cap.

What’s worse is what to do if the season starts as usual but the epidemic ends early. In this case, the team will suffer more serious losses but must pay the full salary. The team thinks it can’t be done.

The league and the players’ union must now agree on every possible situation. They signed a new labor agreement before, and now they have to continue to negotiate.