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2021 cap/cba question
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<blockquote data-quote="HardRightEdge" data-source="post: 884877"><p>The $175 mil cap for 2021 is the minimum per agreement with the NFLPA to amend the CBA, so there's no issue there. That number is just a placeholder until the losses are totaled up and there is greater revenue visibility going forward. Everything is negotiable.</p><p></p><p>If all goes well and Covid-19 is largely in the rearview mirror before free agency begins next March, a big if, I would expect another CBA renegotiation whereby the cap over a few years remains flat or increases slightly until the losses are recouped. Expect a 17 game 2021 season which is an owner option negotiated into the CBA to help with that.</p><p></p><p>If there is not an effective vaccine that is widely distributed and widely accepted, I couldn't venture a guess where that might lead.</p><p></p><p>Right. If you ballpark TV revenue at about 60% of what would have been the total and toss in a generous 10% from all other sources instead of the expected 40%, that's a 30% revenue haircut. With the players getting around 50% of revenue, by all rights the cap this year should have been around $140 mil. Back of the envelope, the players have $60 mil that must be given back sometime.</p><p> </p><p>But that's just revenue. From the owner's negotiating position there's the matter of profit. If revenue is 70% of what it would have been in the absence of Covid-19, the % of lost profit is much greater than 30%. All the overhead is unchanged--non-player salaries, debt service, stadium maintenance, utilites, insurance, yada, yada. Further, owners view profit in it's entirety including ancillary ventures, like the Titletown District, which we can assume are taking bigger hits than the football operation. Most if not all franchises will be taking a net loss this year, some pretty substantial.</p><p></p><p>Again, in short, the minimum $175 mil 2021 cap is just a placeholder until there is some kind of visibility. I would not, however, expect anything more than a token increase in the 2021 cap over 2020 under the best of circumstances.</p></blockquote><p></p>
[QUOTE="HardRightEdge, post: 884877"] The $175 mil cap for 2021 is the minimum per agreement with the NFLPA to amend the CBA, so there's no issue there. That number is just a placeholder until the losses are totaled up and there is greater revenue visibility going forward. Everything is negotiable. If all goes well and Covid-19 is largely in the rearview mirror before free agency begins next March, a big if, I would expect another CBA renegotiation whereby the cap over a few years remains flat or increases slightly until the losses are recouped. Expect a 17 game 2021 season which is an owner option negotiated into the CBA to help with that. If there is not an effective vaccine that is widely distributed and widely accepted, I couldn't venture a guess where that might lead. Right. If you ballpark TV revenue at about 60% of what would have been the total and toss in a generous 10% from all other sources instead of the expected 40%, that's a 30% revenue haircut. With the players getting around 50% of revenue, by all rights the cap this year should have been around $140 mil. Back of the envelope, the players have $60 mil that must be given back sometime. But that's just revenue. From the owner's negotiating position there's the matter of profit. If revenue is 70% of what it would have been in the absence of Covid-19, the % of lost profit is much greater than 30%. All the overhead is unchanged--non-player salaries, debt service, stadium maintenance, utilites, insurance, yada, yada. Further, owners view profit in it's entirety including ancillary ventures, like the Titletown District, which we can assume are taking bigger hits than the football operation. Most if not all franchises will be taking a net loss this year, some pretty substantial. Again, in short, the minimum $175 mil 2021 cap is just a placeholder until there is some kind of visibility. I would not, however, expect anything more than a token increase in the 2021 cap over 2020 under the best of circumstances. [/QUOTE]
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