The NFL and the NFL Players Association agreed Wednesday to a salary cap of $182.5 million per team for 2021, a long-anticipated 8% decrease from last season.
The league informed teams of the official cap number Wednesday morning in a memo, which was obtained by ESPN. The drop-off will force teams to make difficult roster decisions in the coming days and weeks.
Cap limits had risen in every year since 2011 in conjunction with rising league revenues, but a 92% drop in attendance during the COVID-19 pandemic led to reduced revenues in 2020. The NFL and the NFLPA agreed last summer that the cap would be no lower than $175 million; last month they informed teams that it would be at least $180 million. It was $198.2 million in 2020.
As in previous years, the final number is the result of negotiations between the league and the union on projected revenues and other factors. A source told ESPN’s Dan Graziano that, absent those negotiated projections, the league’s 2020 revenues would have dictated a cap of about $160 million this season.
Teams must be in compliance with the cap by next Wednesday at 4 p.m. ET, when the new league year begins. Planning has been underway for a year, but teams are expected to release an unusually high number of players into the free-agent market to either get under the limit or create space to address other roster needs. The cap number likely also will depress growth for high-end deals in the market.
The pain is expected to be temporary as attendance increases in 2021 and, more significantly, the NFL works to finalize new broadcast contracts that are expected to elevate revenues far beyond pre-pandemic levels.