© Cary Edmondson-USA TODAY Sports
As training camp draws near, many of the NFL and NFL Players Association’s disagreements have been at least tentatively sorted. But maybe the most major remaining item is the salary cap and inevitable financial losses which will come this season as a result of fan-less or very few fan-attended games. As NFLPA executive director DeMaurice Smith told PFWA reporters on a call last week, some projections have teams losing $70 million this season, which, if applied next season, would create a roughly $120 million salary cap for 2021.
Per NFL Network’s Tom Pelissero, the main disagreement between the players union and owners is how to spread that potentially, if not likely, monumental loss in revenue. Owners reportedly want that loss to be dealt with in the short term, having the losses spread over the 2020 and 2021 seasons. Players want the negative cap hit spread over the next decade.
The NFLPA wants to spread the financial hit through 2030, rather than taking it now. And even a $10 million reduction in the 2020 salary cap would be “too much” at this stage, one GM said. Rosters are largely set. Many teams would be scrambling to free up money somewhere.
— Tom Pelissero (@TomPelissero) July 23, 2020
It’s not immediately clear how the league could accurately assess how much money it would lose this season, and decreasing the salary cap before the season, just after deals have been signed, would be short-sighted, as would placing the cap hit solely on the 2021 season.
A more likely scenario would be having the cap dropped in 2021 and 2022. Spreading it over the next 10 years would probably mean small increases in the salary cap as opposed to the traditional $10 million per year increases the league has become accustomed to.
Either way, the league is priming for some salary slashing to take place. It makes sense to proceed under the notion that any reduction would begin with the 2021 season, whether that’s with the league’s short-term loss absorption plan, the players’ long-term smoothing, or somewhere in between.
For the purposes of this article, we’re only looking at that short-term scenario, specifically, the league taking the entire cap loss next season, or spreading it over two or three years.
If the cap drops by the worst possible figure, $70 million, as Smith suggested, next year’s cap would tentatively sit around $130 million. Assuming the cap hit is spread over two seasons, and fans are allowed back into stadiums in 2021, you’d have around a $163 million cap in 2021 and a $170 million cap in 2022. If you use the three-year scenario, you’d see that loss smoothed to have a $175 million cap in 2021, a $180 million cap in 2022 and a $190 million cap in 2023.
Under any of these scenarios, teams need to drop a minimum of $15 million in salary in the first season. Keep in mind, rookie salaries, which would raise the 49ers’ cap hit anywhere between $3.5 and $6 million (using a $4.5 million placeholder, would have to be accounted for, as well as a George Kittle extension (using a placeholder of $16 million in 2021).
In scenario 1, with the cap at $130 million, you’re looking a devastating series of cuts. In scenario 2, a number of sizable veteran contracts will be cut, as will be the case, albeit on less severe level, in scenario 3.
Who would the 49ers cut? There are about six names that stand out, with two or three clear frontrunners to be cut. Per OverTheCap, the team’s current liabilities for the 2021 season amount to $170.16 million. Add in $4.5 million for rookies and $16 million for Kittle with Trent Williams, Richard Sherman, Jaquiski Tartt, K’Waun Williams and Ahkello Witherspoon as free agents, and things suddenly get very tight.
With just the rookies and Kittle alone, that’s about $190 million in cap liabilities. How would the team get that number down to, say, $163 million? Start at the top.
Ford is a likely cut, regardless of the impending financial losses due to his health, effectively specialty role and his outsized cap impact. He has a $17,600,000 cap hit in 2021, and cutting him drops that to $4.8 million saving just over $12 million in cap space (and roughly $19 million in 2022). In this scenario, the 49ers would be around $178 million in liabilities, still $15 million over the new, brutal cap.
Alexander, like Ford, is also a likely cut who has dealt with injuries, and already had his contract reworked which means cutting him sort of negates some of the rewards of the reworked deal. Those extra years at the end of his contract jump up to now, meaning his $16.5 million cap hit only drops to $10.4 million, saving the 49ers about $5.3 million in space in 2021 (and almost $17 million in 2022)
Like Alexander, Richburg has had his deal reworked, which means the earlier you cut him, the earlier that spread out money comes back to be paid. His $11.4 million would only decrease to $8.4 million, about a $3 million cap savings in 2021, and $12 million in savings in 2022. At this point, the 49ers have shredded their cap figure to about $170 million, still $7 million over in the second scenario, but just under in the three-year scenario. That is, however, without signing any corners or a strong safety. Ideally, they’d draft heavily at those positions and go for cheap veterans to make the numbers work, still betting on their defensive line.
A cheap extension for Daniel Brunskill could open the door to usher Tomlinson out of it. He’s scheduled to make $6.2 million in 2021 and would save the team about $4 million, with his cap hit dropping to $1.25 million. The 49ers’ cap hangs around $165.5 million.
Gould is the last substantial salary cut the 49ers could comfortably make without having to work on a Jimmy Garoppolo extension. The remaining salaries above $5 million belong to Garoppolo, Kittle, Arik Armstead, Nick Bosa, Jimmie Ward and Mike McGlinchey, none of whom save the team much money by being cut, and all of whom are obviously crucial players. Gould, meanwhile, can be replaced. His cap hit would drop to $1.5 million from $5.25 million, and the team’s cap for 2021 would sit at $163,141,144, assuming $4.5 million is budgeted for incoming rookies.
To squeeze under that number, Nzeocha, scheduled to make $1.6 million, would save $820,000, assuming the lowest salary on the 51-man roster is $780,000, the figure for a minimum player with one year of NFL service time. The 49ers’ cap sits uncomfortably at $161,541,144, just under the $163 million threshold, with all rookies signed, but having let Tartt, Sherman, Witherspoon, Williams and Emmanuel Moseley go. If Moseley is given a second-round free agent tender, they would again exceed the cap. That figure was $3.2 million in 2020, but would likely drop proportionally with the way the league chooses to space out revenue losses.
The likelihood of the proposals
There are teams in far more flexible financial situations and those in far more rigid financial situations than the 49ers. Looking at how difficult it is to slash salaries, it’s hard to see how the league could settle on anything less than a three-year plan to deal with revenue losses (planning for a $70 million loss in revenue per team, with fans back in stadiums in 2021, it would provide a roughly $175 million cap in 2021).
In the 49ers’ case, if they had any hope of retaining their players in the secondary in Tartt, Sherman, Witherspoon, Williams and Moseley, they would almost certainly have to extend Jimmy Garoppolo for the long term and have extraordinarily low cap hits in the first few seasons, and/or convert most of his salary to bonus money late on.
The players’ proposal of spreading the losses over a decade seems the far more reasonable option, but it’s something that would limit profit numbers in later years, and NFL owners have a reputation of being short-sighted. The idea of slashing salaries might well be a pipe dream for some of them. It’s reasonable to expect an agreement somewhere in the middle, where the new CBA is able to return to its normal schedule in the mid-to-late-2020s, and the revenue losses are spread over a four-to-six-year period.
Losses would still result in veteran cuts, but teams could plan those losses in for the long term without consistently making drastic cuts. Myriad contracts would get reworked, but you wouldn’t end up with organizations fielding teams of almost solely players with less than five years of service time. No scenario is ideal, but there needs to be perspective to prevent a rampant release of elite players who get priced out of the market because of the pandemic.