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How does the NFL salary cap work in 2021?

How does the NFL salary cap work, what is the cap space set to be in 2021, and what are the minimum and average salaries for NFL players?

How does the NFL salary cap work in 2021?
ATLANTA, GA - DECEMBER 20: An NFL logo on the field during the Week 15 NFL game between the Atlanta Falcons and the Tampa Bay Buccaneers on December 20, 2020 at Mercedes-Benz Stadium in Atlanta, Georgia. (Photo by David J. Griffin/Icon Sportswire via Getty Images)

Over the past 12 months, the 2021 NFL salary cap has been a subject of much discussion. Let’s look at the situation regarding the 2021 NFL salary cap, the minimum and average salaries in the NFL, as well as which team currently has the most cap space as we head into the 2021 NFL season.

What is the NFL salary cap in 2021?

As of yet, the salary cap for the 2021 NFL season has not been officially set. However, a recent report from Adam Schefter indicated that the cap could sit in the region of $180-181 million. On the February 18th Draft Insiders show, Pro Football Network’s Chief Draft Analyst Tony Pauline confirmed this report. However, Pauline also discussed that there could be further developments in the 2021 NFL salary cap.

“I’m told that it could be closer to $181 million dollars, but then there are stories out, reports out there that the league is negotiating right now with new TV deals and depending on the size of those tv deals, they may artificially increase the cap this year and then pay it off down the road.”

Therefore, in the lead-up to the new NFL league year on March 17th, the 2021 NFL salary cap could be set to rise. However, as Pauline also discussed, the uncertainty surrounding the cap is currently having the effect of reducing news surrounding free agency. With teams uncertain as to how to manage their current rosters, discussions regarding free agents have yet to get going.

On February 18th, the NFL confirmed that the salary cap will be at least $180 million in 2021.

The NFL salary cap could yet be even higher than that $180 million figure

On the February 23rd episode of Draft Insiders, Tony Pauline discussed how the final number could be higher than that $180 million figure.

“I’m hearing that that number is likely to grow when all the revenue is accounted. I’m hearing the number is likely going to be at least $185 million per team, but it could go as high as $193 million per team. From what I’m told, the $180 million figure was put out there because there were people, both on teams and the NFLPA players union, who were getting frustrated and wanted a base number to work off of.”

However, Pauline is also hearing that there is “no specific date. All I was told is that it will happen before March 17th.”

How is the salary cap calculated in the NFL?

The 2021 season will see the NFL get away from their usual method of calculating the cap. With the revenue from the 2020 NFL season significantly lower than earlier projections, the cap would drop significantly below the $175 million minimum if the NFL follows its standard procedure.

The system of setting the salary cap is reasonably simple, using the previous season’s revenue as a starting point:

  • Revenue calculations x CBA percentage = Players revenue share
  • Player revenue share – projected benefits = The amount available for salaries
  • The amount available for salaries/number of teams = Base salary cap per team

The revenue is calculated as a combination of revenue generated from television deals and the revenue generated from day-to-day sales such as tickets, merchandise, and refreshments. In 2020, the revenue from those day-to-day sales was significantly lower than originally projected.

How is the NFL preventing the salary cap from dropping further in 2021?

It may seem that the NFL is being generous by not letting the cap fall significantly in 2021. A drop in the 2021 salary cap to $175 million would represent a 13% decrease in the 2020 cap number. Now, assuming the cap can drop by as much as 40% ($80 million), the NFL is essentially paying to keep the cap higher.

Related | When is the 2021 NFL Draft?

However, the system that will likely be used to finance the NFL salary cap in 2021 is similar to a mortgage. The NFL will essentially loan the money to the players and then claim it back in future years. The exact amount of time they take to reclaim it will likely depend on how much money the NFL loans out.

They will reclaim the loan by taking the money off future salary caps. Let’s say the NFL loans $50 million per team to keep the cap at its level in 2021. In 2022, if the cap then calculates to be $250 million, the NFL may choose to set it at $225 million. They could then reduce the 2023 salary cap by the same amount.

What is the minimum salary in the NFL?

Just over half of the NFL players operate on deals that pay them one of the minimum salaries. Unlike the NFL salary cap, the minimum salary is mandated by the Collective Bargaining Agreement (CBA). Yet, the minimum salary varies based on experience within the league and also grows through the life of the CBA.

In 2020, a player with less than one year of experience earned a minimum of $610,000. However, by the end of the current CBA, that will rise to $1.065 million. Players with more than one year of experience earned a minimum of $675,000 in 2020, rising to $1.185 million by 2030.

The final tier of minimum salaries in the NFL comes once a player has over seven years of experience. Those players earned a minimum salary of $1.05 million in 2020. That will rise to $1.48 million by the end of the CBA in 2030.

What is the average salary in the NFL?

Unlike elements such as the minimum salaries and the NFL salary cap, an NFL player’s average salary is extremely variable. As stated above, just over half of NFL players are on contracts paying them the minimum salary. Meanwhile, you have players such as Patrick Mahomes, who earns $45 million a year on average.

All told, the average NFL salary now sits between $1-1.5 million per year following the signing of the new CBA. In the past, this number has been suggested to reach as high as $2 million, with the exact number depending on the method of calculation used.

What NFL team has the most cap space for 2021?

The situation regarding NFL salary cap space for the 32 teams is changing on a seemingly daily basis. As of February 27th, the Jacksonville Jaguars have the most cap space for the 2021 NFL season. The Jaguars currently project to have a little under $83 million in cap space.

Related | NFL Team-by-Team Salary Cap and Cap Space for 2021

The Jaguars are one of four teams that, as of now, will have over $50 million in cap space in 2021. The other three are the Indianapolis Colts, New York Jets, and New England Patriots. Another seven teams currently project to have over $20 million in cap space.

Which teams currently project to be over the cap in 2021?

As it stands on February 16th, 12 NFL teams project to be over the salary cap entering 2021. This ranges from the New Orlean Saints, who project to be around $70 million over the cap, to the Bills at less than $2 million. All teams must be under the salary cap when the new league year begins and free agency starts on March 17th.

NFL salary cap by year

  • 2020: $198.2 million
  • 2019: $188.2 million
  • 2018: $177.2 million
  • 2017: $167.0 million
  • 2016: $155.3 million
  • 2015: $143.3 million
  • 2014: $133.0 million
  • 2013: $123.0 million
  • 2012: $120.6 million
  • 2011: $120.0 million

Want more NFL news and analysis?

Be sure to follow us on Twitter (@PFN365) to stay up to date with all things around the NFL. Also, continue to visit Pro Football Network for NFL news and in-depth analysis concerning the 2020 season and beyond.

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