Coronavirus - Salary Cap Question

[Mingo]

If the NFL takes a revenue hit - due to the coronavirus - won't that result in perhaps a negative salary cap?

Are the players going to have to take a pay cut - as the salary cap number next year will likely be lower?

 

[58crash]

as in no season?

 

[58crash]

No fans in the stadium?

 

[58crash]

I think they play. and I think they bank money.

This virus is affecting 50% of people and they don't know it.

 

[fightinredantz]

I am hopeful that the season will go on as planned with stadiums full of fans.

The NFL was part of the healing after 9/11, and it might the first professional sporting events post COVID-19.

I will admit that the NFL season could happen with fans, be cancelled, or some where in between.

 

[Draft Crazy]

What’s the other option? Place stuffed animals with foam fingers in each seat and pump up some crowd noise?

 

[fightinredantz]

Games with no fans or maybe a partial season. Hard to predict how this is going to go. Our economy needs there to be a football season with fans in the stands. Every little bit helps.

 

[Draft Crazy]

We also need to stay alive... Hopefully by the time NFL season rolls around things will be back to normal in terms of being out in public.

 

[Mingo]

What I'm getting at is the agreement with the players allowing for the players to earn a certain percentage of league revenue and it is from this formula that the salary cap has been produced. If league revenue goes down - I believe the salary cap also goes down and instead of Millions more to spend on players each year - it might go the other direction for a while and cause a salary upheaval. It doesn't matter what causes the loss of revenue - just that there is a loss of revenue.

 

[SpringStein]

No doubt not having fans attending games will impact revenue big time. However, if the NFL can (as has been speculated) create a schedule having a couple more games televised on Saturdays they can make up most if not all that lost revenue.

I believe that would depend on whether college football is played or not though. So that’s a big if.

 

[CEH]

When demand drops , the first cost cutting is in your labor force so yeah I think the players will have to give in on order to have a season even without fans.

would you rather be furloughed or take a small pay cut ? Ask your spouse for that answer . It’s the same in professional sports.

 

[CEH]

No doubt not having fans attending games will impact revenue big time. However, if the NFL can (as has been speculated) create a schedule having a couple more games televised on Saturdays they can make up most if not all that lost revenue.

I believe that would depend on whether college football is played or not though. So that’s a big if.

How do networks make their money? Advertising? What if no one is buying beer or cars or soda? Yeah they are watching but not shopping.

interesting business study for sure

 

[cdumler7]

I don't think the salary cap will be changed for this upcoming year since they already set it and had teams sign contracts geared towards that. They might allow teams if players agree to not have to pay say certain parts of the contract all at once if they are struggling with some cash flow. The NFL should have a pretty big pot of money set up though to handle a down time like this.

Ticket sales will hurt but teams also won't have the extra overhead of staff at the games and such or the stadium maintenance to the degree that it was before. So save some money while losing some as well. Doesn't completely work out in the NFL's favor but better than what we are seeing for some of these other sports of possibly having to cancel the entire season.

 

[molsaniceman]

its already started in mlb NFL will adjust also but no idea what till sports are played

According to Ken Rosenthal and Evan Drellich of The Athletic, Major League Baseball might ask players to accept further reductions in pay if games are played this year without fans.
MLB owners and the MLBPA reached an agreement back in late March that shelled out $170 million in advance pay to essentially cover prorated player salaries for April and May, but the two sides will need to reconvene soon to address further compensation. And a lack of ticket sales could change the terms going forward. Rosenthal and Drellich note that the league "has yet to make a proposal to the players’ union on the subject," but New York Governor Andrew Cuomo appeared on CNN on Wednesday night and referenced a recent conversation with Mets COO Jeff Wilpon about potential salary cuts should games be played with zero paid attendance. It sounds like that element of the negotiations could get rather ugly.

 

[Mingo]

When the NFL offers guaranteed money - does it still apply for this situation if there is an interruption?

 

[CEH]

He’s referring to this provision that appears on page 82 of the 2020 CBA, under the heading “Cancelled Games”: “If one or more weeks of any NFL season are cancelled or [All Revenue] for any League Year substantially decreases, in either case due to a terrorist or military action, natural disaster, or similar event, the parties shall engage in good faith negotiations to adjust the provisions of this Agreement with respect to the projection of [All Revenue] and the Salary Cap for the following League Year so that [All Revenue] for the following League Year is projected in a fair manner consistent with the changed revenue projection caused by such action.”