The NFL is seeing its first salary cap retraction since its creation in 1994. On Wednesday the NFL announced that the cap for the 2021 season would be $182.5 million, down from $198.2 million a year ago. The Covid pandemic led to lower than expected earnings, and the effect is that we’re going to see one of the most bizarre free agency and offseasons in recent memory.
For years teams have operated under the safe assumption that the cap would rise. Some organizations, in an effort to try and get in front of inflating contracts, signed players to longer, larger deals than at any point in NFL history in recent years. At the time this was smart. Securing a quarterback you believed in for $26 million a season might be high when the deal was inked, but on the back end it was believed it was going to be a steal when contracts at the position approached the $40 million mark annually.
There’s just one problem: those deals were signed with an assumption that the the NFL salary cap would continue to grow. Covid stopped the NFL in its tracks.
Make no mistake, the NFL is not poor by any means. The cap retraction is simply a correction that ensures billionaire owners keep making their massive profits in spite of the pandemic, passing the losses along to players. Those hurt by the retraction won’t come from the league’s elite, but rather aging players whose contracts are no longer worth the cap hit, and those scheduled to hit free agency this year. Which is where this story really begins.
The retraction changes how teams operate
We are entering uncharted waters where there won’t just be be the expected group of free agents teams planned around, but a bevy of veterans cut in order to get under the cap. In the last month we’ve seen numerous veteran player cut, who otherwise would likely be retained.
- Ricardo Allen, FS (Atlanta)
- Allen Bailey, DE (Atlanta)
- A.J. Bouye, CB (Denver)
- Nick Easton, G (New Orleans)
- DeSean Jackson, WR (Philadelphia)
- Christian Kirksey, LB (Green Bay)
- Kyle Peko, DT (Denver)
- Kawann Short, DT (Carolina)
- Ricky Wagner, RT (Green Bay)
- J.J. Watt, DE (Houston)
- Stephen Weatherly, DE (Carolina)
This is just the first list of cuts, and will likely be accompanied by dozens more high-profile names now the cap is known. The issue for this is simple: Teams overspent, by a lot. As it stands a stunning 16 teams are over the $183 million cap, with half the league fully planning on another cap bump in 2021.
Consider this: From 2019 to 2020 the NFL salary cap went up $10 million. Teams assumed a similar thing would happen again. Had Covid not happened, and the league progressed as normal, the cap for this year would be $208 million on the season. Had this been the number only four teams would have been over the cap. Instead we have a situation where not only is the cap not growing, but the retraction is tantamount to a $25 million swing in projected payroll.
That’s big, and what has led to the issue of so many teams being over the cap now.
Who is in the worst cap spot?
At this point you’ve probably heard about the situation the New Orleans Saints are in, but it’s so much worse than you can imagine. As it stands today the Saints are a staggering $57.7 MILLION over the 2021 cap.
Huge spending in each of the last three seasons is coming home to roost, and even cap wizards are having a hard time projecting how the Saints dig their way out. Drew Brees potentially announcing his retirement is one small piece of the puzzle, but in order to drop their figure New Orleans will need to jettison big players into the open market, possibly including Kwon Alexander, Jared Cook, Janoris Jenkins, and Emmanuel Sanders. These players, particularly Alexander, would garner lots of attention in free agency by other teams.
The problem is: They’re all having to navigate the narrow cap too.
What does this mean for NFL free agency?
Right now all we have to go on is speculation, but there’s a possibility that agents advise clients not to take long term deals starting in 2021 as a result of the salary cap retraction. Cardinals running back Chase Edmonds hinted this on Twitter.
This free agency Gon be wild. Gonna be a lot of REALLY good players take one year rentals because that salary cap. Super teams type. IMO we Gon see tho
— Chase Edmonds (@ChaseEdmonds22) February 17, 2021
The concept of the one year “prove it” deal was on the rise in the NFL before this latest salary cap, and that will only intensify now. Nobody is going to want to commit long term to a deal that underpays their net worth because of Covid, only to see the cap potentially shoot up $30 million next year, and leave tons of money on the table.
This is also a perfect storm with the Buccaneers helping form a Super Bowl team on the back of the short-term, veteran, “super team” concept. There’s no better way for a prospective free agent to get visibility than being on a championship team, and that could push a lot of players to accept low-money, one-year deals with contenders — and bank on their big payday to come when fans can be back in the stands full force, and the league is flush with money again.
There’s a very real possibility that the cap between the league’s haves and have-nots will be greater in 2021 than ever before because of this. The balance in the league is normally kept afloat by the idea that bad teams don’t often carry terrible contracts, meaning they should have funds to secure the best free agents. However, this year they conceivably won’t be able to out-spend better teams, out of virtue of the cap.
Really there are only six teams with the funds to make a serious splash in free agency if they want: Jaguars, Jets, Patriots, Colts, Bengals, and Washington Football Team. If you’re a free agent looking for a one-year deal would you really pick, say, the Giants when the Seahawks, Ravens or Bills could offer you the same money?
There is a risk this year could change the NFL as we know it
This isn’t designed to be a doomsday scenario. The NFL has maintained its status quo for decades, and that will likely continue — but there are tea leaves to read that something concerning could be on the horizon.
If bad teams are forced to overpay for talent in order to sway them away from taking one-year rental deals, then this will have a knock on effect where bad teams are saddled with bad contracts, while the league’s best teams now have healthier cap space in the future.
The concept of the “super team” working in the NFL was always hand waved off by the notion that there are too many moving parts, and too much of a learning curve for players to truly be effective entering a team on a one year deal. However, the league is simplifying offensive and defensive concepts, the Buccaneers proved it could be done, and we could see a greater shift league-wide to teams adopting for more roster churn in the future than in the past.
If this becomes the norm we will see the league take a massive hit to the parity its always lauded as being one of its best qualities. Of course, for this to happen it starts with bad teams making bad decisions in free agency, and there’s no guarantee that will happen — but it is something to watch.
Either way, we’re about to enter the most fascinating year in the modern NFL.