NFL free agency will soon be upon us and teams have a lot of difficult decisions to make. Due to COVID, the NFL salary will actually decrease for the first time since 2011. Teams will have to be creative in the ways that they construct their roster that effectively fits under the cap this year. In this article, I will show ways NFL teams could save money in this upcoming year.
There are currently 20 teams that are under the cap for this upcoming season using a baseline value of $180,500,000 as the base salary cap number. The leader in cap space available is the Jaguars who have around $82 million to spend. The team that is still above the cap with the lowest to spend are the New York Giants who currently have $906,453 to spend. With the NFL free agency period coming up soon (March 17), it’s important to consider these guidelines in terms of how much money teams can allocate towards free agency.
- Teams have to allocate a portion of their available salary cap towards their incoming 2021 draft class.
- This can cost anywhere from a projected $4,943,112 (Saints) to $13,823,688 (Jaguars) which is based on factors such as draft position and number of draft picks per OverTheCap.
- Franchise tags or transition can be applied to players until March 9th, but that player can sign a long term contract to replace their franchise tag.
- Teams must have at least 51 players signed to their active roster.
With that in mind, the overall cap space that teams can allocate to free agents this year will be lower than the values in the graph due to the amount of money they have to spend on the incoming rookie class. In fact, rookie contracts will be more important than ever given that the salary cap is lower. Since rookie contracts are lower than veteran contracts, especially in their first year, teams may choose to keep more rookies on their roster to be able to stay under the cap. Needless to say, for teams that don’t have a lot of money to spend, this upcoming draft will be very important. Rookie contracts tend to be more flexible for the front office to manage given that they can cost under $1 million in net cap.
Below are the teams that are starting the 2021 NFL offseason under the cap:
As seen in the graph, the Saints are around -$69 million below the cap. While it is a large amount, there are ways for teams to get back under the cap.
- Cutting players: Teams can look to free up cap space by cutting players on their active roster. While this may seem like an easy option, there are a lot of hidden costs that come with cutting a player. One thing that a team can incur when cutting a player is dead money due to player guarantees and roster bonuses. Even if the team releases them, they must still pay these players what they are owed.
The Eagles announced that they will cut Alshon Jeffery after June 1st. They made this move specifically after June 1st instead of before June 1st because there is less dead money taken on by the Eagles. If they cut Jeffery before June 1st they would take on $11,026,441 in dead money. But if they cut Jeffery after June 1st they would save $5,435,706. Teams routinely make moves like this to try to save money whether it be a Pre-June 1st cut or Post-June 1st cut.
- Converting base salaries into a roster bonus: This move is one that has been rising into prominence the last few years by a couple teams. The method ultimately allows for teams to focus on the present and not the future. What teams would use this? Teams that are in win now mode. By pushing players’ salary cap hits into the future, they have more money to work with in the present. This can be used to sign veteran free agents that are released midseason by losing teams or trade for players as well. Examples of teams in win-now mode the past four years that have utilized this method are the Saints, Eagles, and Rams. These 3 teams are also at the bottom of the available salary cap this year. This is how it works:
Teams convert a portion of a players base salary into a signing bonus. The signing bonus amount is then spread out throughout the remainder of a player’s contract. This means the current salary cap space for that team will increase while future years decrease.
For example: The Packers were over the cap and on February 13th, they converted David Bakhtiari’s $11 million roster bonus into a signing bonus that would be spread out through the rest of his 4 year contract. What this means is that the Packers cleared up $11 million in cap space this year, which they needed, but they are potentially compromising their future as they will have to pay Bakhtiari $2.768 million more in the next 5 years and they will have to subtract $2.75 million from their available salary cap.
|Year||2021 (Before)||2021 (After)||2022||2023||2024|
|Salary Cap Number||$21,993,014||$10,993,014||$22,768,014||$26,268,014||$30,268,017|
- Trading Players: This move isn’t widely used especially during free agency because it takes two parties to complete. So far, one major trade that has gone down involved 2 big name quarterbacks: Matthew Stafford and Jared Goff. The interesting part about the Stafford-Goff trade was the picks involved with it. The Rams had to give up 2 first rounders and a third rounder on top of Goff to get Stafford. This is because the Lions will take on Goff’s 4 year $106 million contract. Mcvay probably didn’t see Goff as worth it given that he ranks 23rd in EPA/Play + CPOE composite since 2019.
Like I mentioned before, rookie contracts will be more important than ever due to the cap hit that each player incurs. Since rookies on cheap deals will be more valuable than expensive veterans on long-term deals, teams may deal those veterans elsewhere to bring in more valuable rookies this year. We may see teams that are under the cap, or have less than $10 million in cap space make trades to free up space for this upcoming season and utilize more rookie contracts to stay under the cap. On the flip side, teams with money to spend (Jaguars, Broncos, Jets) could make more trades with teams given that they have more than 7 draft selections.
- Signing players to 1-Year Deals: This year, there is a high likelihood that we see more players signed to 1-year deals than ever before. Due to a decreasing salary cap, teams may choose to sign players to 1-year contracts to be able to fit their entire roster under the cap. The new TV deal that the NFL signed with Disney and ABC are also good signs for the salary cap likely to be rising after the 2021 year. Thus, teams may choose to sign players to long term contracts after the 2021 year as they will have an estimate of future cap numbers.
However, players will likely be exercising this choice as well. Due to the salary cap being lowered for 2021, more players might choose to take 1-year prove-it type deals for cheap to try and build up their value when the salary cap rises again after 2021. If players take long term deals, they might be paid less right now because of all the uncertainty surrounding COVID and future salary cap numbers. Additionally, if their performance isn’t good in 2021, or they get injured, they could get cut after the season is over and lose out on money. To counter this, players may be willing to take 1-year deals to bet on themselves to have a productive 2021 season in hopes for a larger payday.
So to recap, the salary cap for 2021 will be no lower than $180 million, and will likely end up in the $182-183 million range. Teams will have to get creative with the ways they can finesse their 2021 cap hit. These methods include: cutting players, converting base salaries into signing bonuses, trading players, and signing players to 1-year contracts. It should be a fun offseason and we can expect a lot of surprising moves to be made by teams to try and stay under the cap.