Forget The Chiefs' Contracts, Pay Attention To This Number

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Adam Hunger-USA TODAY Sports

Therefore, it appears that the 2015 salary cap will hem pretty closely to the increases in overall league revenue. How much will that be? Well, if you could predict it, the NFL would probably like to hire you as an accountant.

What we know is that the NFL is shooting to increase its annual revenue to $25 billion by 2027, because, I dunno, it wants to invade a small country or something. That’s a 150% increase from its current state.

USA Today crunched the numbers (so thankfully I didn’t have to). This is how the league’s revenue breaks down right now:

  • About $5 billion from media and television rights to broadcast games.

  • About $1-2 billion in sponsorships, such as its long-running deal with PepsiCo, worth about $90 million to $100 million per year.

  • About $2 billion related to attendance and ticket sales.

  • About $1 billion in merchandise and licensing.

Hitting its $25 billion target will basically require the league to have a compound annual growth rate of about 7%, or $1 billion per year in dollar terms.

Who knows if the league will hit Roger Goodell’s probably exaggerated target. But, if they manage to grow by $1 billion this year and compute things they way they did last year, then that means $500 million more to the salary cap or $15.6 million per team. This would raise the cap to $148.6 million. That seems overly optimistic, and PFT’s source put forward a slightly more modest estimate of $145 million for 2015 and $160 million for 2016.

But, we really don’t know. Either way, if the salary cap is in that neighborhood, the Chiefs are not going to be nearly as hopelessly cash-strapped as they appear right now. If the cap jumps to $145 million or even $150 million next year, then the team should have no problem finagling a way to keep both Smith and Houston in red for as long as they want and maybe even keep OLB Tamba Hali.

We shall see, but either way, this is the most important number for the Chiefs, and one that hasn’t gotten much attention.

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Tags: Alex Smith Justin Houston Salary Cap

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