In a move that will make things a little less anxious in the executive offices of the Kansas City Chiefs, the NFL has told its teams that the 2021 salary cap will be no less than $180 million. ESPN’s Adam Schefter had it first.
NFL informed teams today the salary cap this season will be a minimum of $180 million.— Adam Schefter (@AdamSchefter) February 18, 2021
Albert Breer of Sports Illustrated’s MMQB chimed in with the memo itself.
Per a memo that went to teams, the 2021 salary cap will be set at a minimum of $180 million (up from $175 million).— Albert Breer (@AlbertBreer) February 18, 2021
This isn’t the final cap. Just the new minimum. pic.twitter.com/L0wtC8GuGv
In talks late last summer, the league and the NFL Players Association had agreed that the cap would be no less than $175 million, so this is just a $5 million increase to that minimum amount — and as Breer noted, this is not what the final cap number will be.
So why is this news important to the Chiefs — and the 10 other teams that are currently above the salary cap?
The biggest takeaway from this news is that despite the coronavirus pandemic, 2020 league revenues didn’t reach worst-case projections; the league is already comfortable with raising the cap’s minimum amount. Even if this $5 million increase amounts to only a drop in the bucket — which it does — this is really good news.
As Breer noted in another tweet, more is likely to be coming.
Two things to remember, re: 2021 salary cap ...— Albert Breer (@AlbertBreer) February 18, 2021
1) TV deals getting done, as has been the expectation, would likely make the owners more flexible in borrowing from future years.
2) A major drop in the cap hurts a LOT of people (veteran players, free agents, teams, etc.)
This follows reporting from NBC Sports’ Peter King in his “Football Morning in America” column on Monday morning.
The NFL is close—“within a month,” one source told me at the Super Bowl—to inking new 10-year contracts with its network partners that could result in an aggregate increase of 70 to 100 percent in rights fees from the last contract.
It’s important to remember that the salary cap is mostly driven by revenue from these television contracts. While many stadiums were empty in 2020 — and many others were filled to only a small fraction of their capacity — the NFL managed to get through the season without cancelling any games, which kept them from losing broadcast revenue. And as King noted, if they can get the deals done before the league year begins on March 17, it will help the NFL set the salary cap at a more workable level.
Getting the deals done now could provide the league with the influx of cash it needs to not have the salary cap crush teams in March.
Still... there’s no reason to expect that in 2021, the salary cap will suddenly return to normal — that is, 5-10% higher than last season’s 198.2 million; while the league avoided an absolute revenue disaster in 2020, revenues did go down. But with this news, there is now hope that it could come in somewhere closer to what it was a year ago.
As I explained on Wednesday, the Chiefs are currently $18.1 million over Spotrac’s projected salary cap of $185 million — just $5 million more than the new minimum. During Super Bowl Week, Chiefs general manager Brett Veach said that he and his staff have run through scenarios where the cap would be as low as $175 million — but that “anything over $185 million and we’re in pretty good shape.”
So at least for the moment, Veach and his team can throw out those $175 million scenarios — and we can hope that the Chiefs will not have to make a lot of drastic salary cap moves in 2021.