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+--- Thread: Salary cap rule changes for 2020 (/thread-22747.html)
Salary cap rule changes for 2020 - Bengalholic - 01-12-2020
Jason Fitzgerald, from OverTheCap explains some of the changes that will be in play for 2020 free agency:
1. There is no June 1 Cut
The question I’ve gotten the most in the last few weeks has been “Hey Jason where did the June 1 option go on the cap and calculator pages” and the answer is quite simple. As of now it doesn’t exist so rather than have people be confused about ways they can manipulate the cap we simply removed it from most of the pages on OTC. For those unfamiliar with the June 1, it was a date in the NFL calendar that was used to defer acceleration (dead money from future years) due to signing bonus prorations to the following league year. So when you cut a player all the cap dollars have to be taken in 2020. While this sounds bad to most fans its not that big of a deal. Only a handful of teams in recent years have had such a bad cap/contract situation where they have needed to use the June 1 so most times deferring money to the following year is just due to circumstance not need.
2. Teams have Both a Franchise and Transition Tag at their Disposal
In a normal year a team can designate just one player either a Franchise or a Transition player. In 2020 they can designate both. So for a team like the Cowboys with a set of major free agents this is a very useful tool as it gives them the ability to, at the very, least match any offer received for two players. In a normal year a team like Dallas would franchise Dak Prescott which would leave Amari Cooper and Byron Jones free to find employment. Now only one of those two will be 100% free. It’s important to note, though, that you can’t use two Franchise tags or two Transition tags, it’s a one and one situation.
3. Expect some Funky Sounding Contracts due to the 30% rule
To prevent teams from dumping huge amounts of cap into what may one day be uncapped seasons the league has a rule in place that does not allow raises of more than 30% of a player’s cap charge minus the signing bonus proration in 2020. So if a player has a cap charge of $6M in 2020 and $3M of that comes from a signing bonus it means he is only allowed a $900,000 raise in any season beyond 2020. Basically the rule is in place to prevent teams from using a signing bonus and from backloading contracts.
3A. These 30% Rules also Impact Renegotiations
What that means is that teams who usually convert millions of dollars to a signing bonus in February to create salary cap space in March won’t be allowed to do it that same way because they have to be 30% rule compliant and remember signing bonus prorations won’t count in the equation. This is why there was a flurry of renegotiated contracts in the last week of the 2019 season primarily by the smarter salary cap strapped teams (Falcons, Eagles, Lions, etc…) as it was easier to accomplish last year by some liberal use of what is and is not considered a likely to be earned salary escalator or de-escalator and putting in option bonuses that can be exercised and prorated in 2019.
4. Teams have to account for all incentives in 2020
Normally when it comes to incentives the way it works is if the incentive was reached the year before it counts on the cap and if it wasn’t then it doesn’t count. At the end of the year the league then determines who did and did not actually earn those incentives and adjusts the cap the following year. For 2020 all of this happens in real time so teams will need to carry the cap space to account for all possibilities.
As an example, since it was well publicized, Richard Sherman earned $4 million in incentives in 2019 from the 49ers. The 49ers were not charged for that on the salary cap because Sherman did not meet the criteria in 2018. Instead they will have their 2020 salary cap knocked down by $4 million. If that same situation occurred in 2020, the 49ers would be required to have $4 million in cap space to cover the incentive.
It will also work the other way too. This year Sherman should carry a $4 million LTBE incentive on his cap figure because of what he did last season. If he does not hit those same incentives the 49ers would then receive $4 million in cap room once it becomes apparent that he will not earn the incentive.
5. Void Years May be a Problem
We all know that teams use void years in contracts to dump salary cap dollars for the future. It’s a big discussion point right now because of the pending free agency and huge void year prorations for Tom Brady and Drew Brees. Teams often use multiple void years to make cap hits work. That will be fine this year as well except for 1 year contracts. This is a problem because the void occurs in what is technically still the 2020 league year (the 2020 league year runs until the first day of free agency in 2021). This is never an issue for teams because that void date is post June 1 of the prior year so the money follows the calendar year for all practical purposes.
Since there is no June 1 all the money from those voids should accelerate into 2020 when the void occurs. That means teams will need to carry the cap room to cover those cap charges essentially rendering the void useless. As an example Drew Brees has a 2021 void year charge of $5.4 million. Assume the Saints bring him back on a new one year contract for 2020. The way they have always done Brees’ recent deals would be to do something with a low salary, huge signing bonus, and two or three void years to dump that money. Assume between the existing void and any new ones that there is $20M in void year cap charges. Well once the deal voids the Saints need $20M in cap to cover it.
So my opinion is that teams with Brees type players will actually have to negotiate two year contracts likely using the “Revis structure” from his time with the Patriots where you make the second year salary so high that you will be forced to cut the player thus making it a one year deal but protecting yourself from the void charges since in this case you actually release whenever football resumes. So if you see someone like Brees get a $40M a year deal with a big 2nd year payment relative to the 1st its really a one year deal written in a manner to protect both parties.
6. Expect a Second Salary Cap Adjustment
Usually the NFL salary cap is set around the combine in late February/early March. That number is then firm for the rest of the year. Normally the accountants then go over various items to determine where things may have been off and whatever that number is usually gets baked into the cap the following year. This time around I believe they have to issue the adjustment for this season and it should come in later April or early May. The last time this happened in 2010 every team got an additional $4 million or so in cap space to use. If that happened here it would be a help for teams that may have been relying on that June 1. Of course the adjustment could be negative too but Id think that is much more unlikely.
7. There may be no Cap Carryover for 2021
Technically the CBA ends in 2020 so the concept of carrying over space seems unlikely. The last CBA was somewhat different with regard to carryover rules so its not fair to lean on that for information but it was a “start over” in 2011. So it’s possible that the NFL would agree to just keep things going as if there was no interruption in 2021 but there is also no guarantee. Rather than chance losing it the smart teams should be putting voids and buyback options into player contracts this year which should be a way to accelerate future prorated money into 2020 and thus use up the cap room. Likewise if you want to cut a player who is underperforming you can do it after the season is over and use up some of that cap room that you have and get the player off the books for 2021.
RE: Salary cap rule changes for 2020 - Synric - 01-12-2020
Speaking of the new CBA I've heard on podcasts that the NFLPA wants to shorten rookie contracts to 3 years with no extra year option for first round and do away with all Tags.
RE: Salary cap rule changes for 2020 - Truck_1_0_1_ - 01-12-2020
(01-12-2020, 04:42 PM)Synric Wrote: Speaking of the new CBA I've heard on podcasts that the NFLPA wants to shorten rookie contracts to 3 years with no extra year option for first round and do away with all Tags.
While that would help for busts, guys who break out will demand a ton and then could regress.
I think at least 4 would be good, as the whole, "takes 3 years to whatever," that most positions have, will make negotiations better.
RE: Salary cap rule changes for 2020 - bfine32 - 01-12-2020
I think the Transition Tag would be the perfect way to go with AJ
RE: Salary cap rule changes for 2020 - Luvnit2 - 01-12-2020
(01-12-2020, 05:21 PM)bfine32 Wrote: I think the Transition Tag would be the perfect way to go with AJ
I agree
RE: Salary cap rule changes for 2020 - TheLeonardLeap - 01-12-2020
(01-12-2020, 04:42 PM)Synric Wrote: Speaking of the new CBA I've heard on podcasts that the NFLPA wants to shorten rookie contracts to 3 years with no extra year option for first round and do away with all Tags.
I don't see the NFLPA having enough to offer the NFL in return to getting all those concessions.
Normally they do a "I'll give you this if you give me this" type negotiation and here the NFLPA would be getting 3 enormous things. I don't know if I could imagine what the NFLPA would be able to give up in return for getting those. It would have to be something huge like the split being 60% owners/40% players, or the NFL getting all the endorsement rights of players+full monetary rights to their likeness in other media (video games).
RE: Salary cap rule changes for 2020 - Luvnit2 - 01-12-2020
(01-12-2020, 09:08 PM)TheLeonardLeap Wrote: I don't see the NFLPA having enough to offer the NFL in return to getting all those concessions.
Normally they do a "I'll give you this if you give me this" type negotiation and here the NFLPA would be getting 3 enormous things. I don't know if I could imagine what the NFLPA would be able to give up in return for getting those. It would have to be something huge like the split being 60% owners/40% players, or the NFL getting all the endorsement rights of players+full monetary rights to their likeness in other media (video games).
Owners want 17 or 18 games. Is that big enough for the big concessions?
I say yes
RE: Salary cap rule changes for 2020 - SunsetBengal - 01-12-2020
I like the modifications in the idea that it stops the practice of teams exploiting weaknesses in the cap rules to in effect spend more than the spirit of the cap permits. For example, signing players to large contracts with huge signing bonuses and "voidable" years. I'm also big on the change of teams having to account for all incentives in contracts, the same year.
Those who have been football fans for several decades know that periodically, the NFL changes things in the best interest of parity. They would like to see every team have an equal opportunity to rise to the top and perhaps win a Championship. For some number of years, some teams have been exploiting "loopholes" in the salary cap rules
I have a feeling that these new salary cap rules will have a profound impact on how free agency is handled across the league, this upcoming season.
RE: Salary cap rule changes for 2020 - TheLeonardLeap - 01-12-2020
(01-12-2020, 09:11 PM)Luvnit2 Wrote: Owners want 17 or 18 games. Is that big enough for the big concessions?
I say yes
I don't think it is, because the talk was in exchange for the 17th game, there would be 1-2 less preseason games and 1 extra bye. That was already most of the exchange right there.
With QBs making $30m+/yr now, there's no way that owners easily give up 2 years of cost controlled 1st round pick QBs.
CURRENTLY
Lamar Jackson: 5yr/~$25.2m + ~$25m franchise tag = ~$50.2m for 6 years
Patrick Mahomes: 5yr/~$39.2m- + ~$25m franchise tag = ~$64.2m for 6 years
THEORETICAL FUTURE
Lamar Jackson: 3yr/~$7m + ~$35m/yr free agency price = ~$112m for 6 years
Patrick Mahomes: 3yr/~$12.3m + $35m/yr free agency price = ~$117.3m for 6 years
Same amount of control, and roughly twice the price. That's a huge give. It also takes away teams ability to franchise tag a player and then trade him.
RE: Salary cap rule changes for 2020 - michaelsean - 01-12-2020
I didn’t understand a word of what I just read, and I read physics tomes for fun. (OK I don’t, but I’d be just as likely to understand one of those.)
RE: Salary cap rule changes for 2020 - michaelsean - 01-12-2020
(01-12-2020, 04:42 PM)Synric Wrote: Speaking of the new CBA I've heard on podcasts that the NFLPA wants to shorten rookie contracts to 3 years with no extra year option for first round and do away with all Tags.
That’s ridiculous. Not nearly long enough. Hell Bengals picks would be in a contract year the first time they stepped on the field.
RE: Salary cap rule changes for 2020 - J24 - 01-13-2020
(01-12-2020, 04:42 PM)Synric Wrote: Speaking of the new CBA I've heard on podcasts that the NFLPA wants to shorten rookie contracts to 3 years with no extra year option for first round and do away with all Tags.
I don't think that will happen for this CBA at least. I think what you will see is the end of the COMP picks. It really hurts veteran Free agents and gives them a huge disadvantage when it comes to picking teams.