The impact of coronavirus hit home for the Dallas Cowboys with the news that “several” of their players have tested positive. That puts even more stress on trying to start training camp sometime next month without having more personnel and staff infected. But that is far from the only impact. Current plans are for the Cowboys to be able to have fans limited to 50% of stadium capacity, and that is something that could significantly reduce revenues. Even that number could be lower by the time fall comes.
Under the CBA, reduced revenues would lead to a lowering of the salary cap. The NFLPA is already discussing how that will affect things.
Sources tell PFN that due to COVID-19 and the ramifications that will likely be felt this coming season, the NFLPA is preparing for a potential drop in the 2021 salary cap due to a loss of revenue from the 2020 season.— Pro Football Network (@PFN365) June 15, 2020
When the player’s union is treating this as more or less inevitable, it is a strong sign that the dip is on its way.
For the Cowboys, this is especially worth watching for a couple of reasons. One is the ongoing talks to get a new deal done with quarterback Dak Prescott. He is currently set to play on the franchise tag, which is not going to be affected this year. But should he and the team not reach agreement on a new contract, then this could affect the cost of a second tag. More importantly, it may change the thinking of one side or the other during the ongoing negotiations. It is hard to predict how both see this, but it may put some pressure on the team to go ahead and get things done before risking another round of talks in 2021, when it may be even harder to make the numbers work out. Prescott’s camp could go either way. They might see this as leverage to get the shorter deal they want, or take the position that it might be more logical to sign to a longer term as the team is reported to desire, which would lock in Prescott’s money before a lowered cap put downward pressure on future deals.
More generally, a lower cap affects all teams, but would be more difficult for those with a lot of high-dollar, long-term contracts already on the books. And that certainly is the situation for the Cowboys. According to Over the Cap, they already have $182 million committed for 2021, and that does not include anything for Prescott. Given that the current cap is $198.2 million, that leaves precious little space to work with should the number go down instead of the annual increase we have seen in recent years, and it would not take much of a reduction to throw Dallas (and several other teams) into negative territory. The Cowboys are already in the bottom third of cap space for next year. With a reduction in space, they would be forced into more contract restructurings. That is a viable strategy in an environment of constantly rising cap space, but things are much riskier if it heads the other direction.
The Cowboys might try to get some players to renegotiate their deals to reduce the payouts, but it is hard to imagine many players being eager to go that route. Stretching things out, often referred to as “kicking the can down the road” in the past, is far more likely. It just is going to be a much more difficult thing.
One way the NFL could alleviate some concerns would be to allow cap relief for teams. Use a lower cap to set the floor, but allow teams that are willing to exceed it, perhaps by “borrowing” against future years. The problem with that is how it basically circumvents the entire reason for the cap, which is to limit how much money owners have to give up to the players. It also allows the rich teams, such as Dallas, to outspend those in poorer financial condition. If some teams were ready to pay out more money to preserve their rosters, it would be a tacit admission that the NFL is actually able to put more money in the pockets of the players. Many owners would be loathe to do that, because it sets a dangerous (for them) precedent down the road. You can be sure it would be brought up in the next CBA.
While we are on that topic, it is proof that the league was wise to get the current CBA done ahead of the deadline. Imagine how difficult the negotiations would be if the specter of reduced revenues were looming over them.
There is no question that the Jones family has sufficient income to pay whatever they need to, although that is also going to dip with the overall economic slowdown. And they are certainly very cognizant of how that could be used against them in the future.
It is just one more way COVID-19 is disrupting things. Now we are seeing direct impacts on pro football, which was supposed to be providing a needed distraction starting next month. As we watch both MLB and the NBA struggle with restarting their sports, we have to brace for more issues for the NFL.