Chiefs shouldn’t worry about potentially shrinking salary cap yet

The Kansas City Chiefs shouldn’t worry about a potentially shrinking salary cap just yet.

Trying to predict anything in this time of a global pandemic is a fool’s errand when it comes to most subjects and the future of the National Football League is definitely in that category. Like every other major sport, the NFL is making its way forward one day at a time by trying to simply make the right choices in the moment while hoping future plans come to fruition despite all potential pitfalls.

Thus far, the NFL has actually skated through fairly well when compared with other sports. Major League Baseball is currently waffling on playing at all this calendar year, while the NBA and NHL have lost major portions of their own seasons already. Meanwhile, the NFL has enjoyed dominant headlines all offseason long thanks to a free agent frenzy and subsequent draft that went off without a hitch digitally.

Can the NFL count on such smooth sailing going forward? That much remains to be seen. And it’s here that some worry can enter the picture—at least when it comes to finances.

Two months ago, Adam Schefter reported that the league’s salary cap could drop precipitously in 2021 due to lost revenue from the lack of fans at NFL games for the upcoming season due to COVID-19 and the safety measures needed to curtail further spread of the coronavirus.

"“If there are no fans in the stands this season that would equate essentially to about on average roughly $100 million less in revenue per team for each of the 32 NFL teams in the NFL,” Schefter said. “If we multiply that $100 million by the 32 we get $3.2 billion in lost revenue, and why is that a big deal? Because the salary cap is based off the total revenue that comes in…“So if there is $3.2 billion in less revenue, which is a rough number… but well within the range that is expected and as other people pointed out there are other financial losses as well, we are looking, potentially, at the salary cap dropping in 2021 by $70 to $80 million.”"

Eight weeks later, the idea of fans at games still feels like a significant reach given the increase in the spread of COVID-19 as reported by states in recent days. Forthcoming waves are expected as summer brings the first events that bring mass attendance—e.g. outdoor concerts, amusement parks, etc.—and states relax their standards for quarantining. It’s difficult, at this point, to picture tens of thousands of people flocking to Arrowhead Stadium in just three months.

If this is the case and the NFL will suffer such huge losses, then those losses will undoubtedly be passed along to the players the following season. You make up for a budget shortfall by altering the next budget, which is why Schefter reported that the cap could drop by so much from its current state of $198.2 million.

For the Chiefs, a team already against the cap, the loss of, say, $70 to 80 million (or even half of that same total) would lead to the immediate loss of several key players. It’s hard to imagine Chris Jones gets a long-term extension in that climate. Sammy Watkins and Laurent Duvernay-Tardif likely would have been cut rather than restructured. Perhaps even Anthony Hitchens and Eric Fisher and Alex Okafor would all be cut simply due to lack of cap space. And that’s before you factor in Patrick Mahomes who deserves a record-setting deal at the worst possible time.

Fortunately we’re a bit early to worry so much. The reason the NFL is focused on the present is because that’s all it can control. Information changes daily about the disease, and it’s impossible to tell what August, October, or January will hold until those months arrive. Plans must remain adaptable. Hands must remain open. It does no one any good to leap to a worst-case scenario and begin to plan from that vantage point.

It’s also important to realize that the NFL is not without ways to deal with the issue. The league could choose to freeze the salary cap right where it’s at for the next five seasons. Instead of increasing it once fans are back, the league could then apply the extra money from gate receipts, merch sales, or television revenues to this shortfall from a generational event. The league could also attempt to create new revenue streams in order to make up for what has been lost. It’s also possible that even some level of attendance at games will be possible—or at least in some cities or regions—keeping the shortfall from being so dramatic.

No matter the angle, it’s simply too early for the Chiefs worry about the cap in 2021 just yet. There’s no way of knowing how this regular season will play out just yet and how great the losses will be. Until then, the Chiefs would do well to simply take things one day at a time and trust that the league wouldn’t allow—or that the NFLPA would never agree to—such a tremendous drop in the cap for next year.