It’s time to face facts, amidst the current pandemic, the salary cap is likely to drop in 2021 if adjustments aren’t made.
Running contrary to what everyone seems to be incessantly talking about these days, the NFL salary cap is destined to drop next season. This reality may catch Dallas Cowboys fans off guard in particular because for months, even years, Cowboys Nation has been hearing about the ever-inflating nature of the cap.
The ever-growing revenue is why players’ salaries noticeably rise each and every year, and it’s why Dallas Cowboys shouldn’t get sticker shock at the numbers being thrown around regarding Dak Prescott’s new deal. The cap rises like clockwork, going up roughly $10 million per season. To put it bluntly, it would take an act of God to impact the revenues enough that it would negatively impact the salary cap. Enter from stage right: COVID-19
Concrete plans regarding live attendance has not been made yet for the upcoming season but most assume, at the very least, attendance will be cut in half. Governor Greg Abbott has announced outdoor stadiums can host 50% capacity crowds, but there’s no telling if that will be a possibility league-wide. Every state needs to make their own determination and the NFL is striving for competitive balance across the nation.
So while we can’t say exactly what will transpire, we can reasonably conclude revenue from live fans will be down. Jonathan Jones at CBS Sports discussed all this and more in his three-part series on the impact of COVID-19 on the NFL. He states teams generate anywhere from $70-$100 million from their local revenue streams.
This is significant to the salary cap because the NFL salary cap is determined each season based on revenue from the previous season. If the NFL makes more revenue than the previous season, the cap goes up. If the NFL makes less, the cap goes down.
While majority of total league revenue is gained through TV deals, live fans still account for a sizeable chunk. Tickets, parking, concessions, and merchandise all go into the final cocktail.
How likely would it be for the salary cap to drop next season?
Michael Lombardi from The Athletic called it “the only sure thing about the future of the NFL.” Owners even voted to raise the debt limit for their teams to over 40 percent.
The Dallas Cowboys Must Adjust
The Dallas Cowboys, along with the rest NFL must adjust. If the cap does drop next year teams will need to cut payroll. Last week I discussed what this means for Dak Prescott’s contract situation and what the Dallas Cowboys can do to avoid disaster. Check it out here:
Finding new ways of generating revenue is important. Re-signing and retaining talent is also important. It’s not time to panic because the entire league is in this together. And compared to other teams, the Dallas Cowboys are in pretty good shape.
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So while there’s no need to panic, we also can’t afford to bury our heads in the sand. Very few people are acknowledging the fact revenues are going to drop. Everyone’s focused on the enormous new TV deal in three years they are losing sight of the hurdles facing the league this coming year.
These are uncharted waters for the NFL and we all need to appreciate the uniqueness of the situation. It could explain the Dallas Cowboys recent troubles re-signing Dak and it also might explain why they let Byron Jones walk in free agency when it’s clear they were financially able to keep him.
If things continue on their current course, revenues will be down this season and the salary cap will drop. The NFLPA and the league itself will be expected to work out a way to avoid catastrophe so there shouldn’t be major concerns at the fan level, but we need to respect the difficult situation ahead for both sides as they navigate these uncharted waters.