Let The NFL Offseason Begin
High level look at the upcoming free agency period for the NFL
As I am writing this, the window to apply the franchise or transition tag is now open for the 32 NFL teams. For many that marks the unofficial beginning of the offseason. Technically the offseason began on Monday February 13, 2022. That was the start of the waiver period for the league.
The one thing we do know about the 2022 league year and upcoming free agency…the league salary cap should be $208,200,000. That number is the salary cap ceiling, agreed to between the NFL and NFLPA (player’s association).
With the two sides agreeing to a “ceiling” implies that the cap may have risen even higher. How much higher we don’t truly know. The league does not want to allow a spike in the league salary cap. The preference is a even staggered rise year over year. Additionally, the league and NFLPA borrowed from future salary caps, which will be repaid as part of the staggered rise in subsequent years.
In the previous CBA the salary cap averaged a 5.6% year over year increase. The increase from 2021 to 2022 is slated to be 14.08%. We should also remember that 2021 league cap was down due to COVID.
The increase in 2023 and 2024 could easily match this 14% increase with the influx of the television contracts and fans returning to full capacity across all the stadiums. Something to keep an eye on with how teams structure their contracts and cash flows in the next 18 months.
We currently have two of the three pieces to calculate each team’s adjusted salary cap: League cap + Carryover + Annual Adjustment. The adjustment is the piece we are missing at this point in time.
Teams are currently completing their year end accounting to generate their team specific annual adjustment. The number could be a credit or debit depending on a number of factors, which we won’t get into today.
Average By Team:
Team Cap Spending (Top 51): $196,585,645
Team Cash Spending: $153,469,461
Given these numbers, without the adjustment, the average team cap space is approximately ~$15.9 million. We are still way early in the process, keep that in mind.
Per Overthecap.com there are 12 teams with negative salary cap projections. Much work to be done within the next 25 days.
Many teams, including the Houston Texans, shifted a portion of their cap dollars from 2021 into 2022. This was completed via restructures, extensions, and void year usage.
Teams will either continue that process of shifting money forward to hedge on a rising cap. Other teams will choose to clean up their roster to open cap dollars in the future.
Teams To Watch
The teams I am personally keeping an eye on, strictly to monitor how each manages their respective salary cap situation:
New York Giants (rebuild)
Green Bay Packers (contender)
Kansas City Chiefs (contender)
Houston Texans (rebuild)
Los Angeles Rams (champion)
New York’s new General Manager Joe Schoen has stated publicly the organization will need to shed upwards of $40 million in cap dollars for the 2022 league year.
Green Bay will need to shed over $55 million just to be cap compliant for the start of the league year. Coupled with the pending Davante Adams franchise tag situation, the front office has a tough task ahead of them. Update, they have already started the process with Kenny Clark and Aaron Jones. Watch out for Aaron Rodgers news as early as this weekend.
Kansas City built in mechanisms into their top contracts to allow for quick restructuring to open cap dollars. At some point down the line, this tactic may catch up with them. This is a situation where the organization is betting on a strong rise in salary cap the next 3 years.
Los Angeles Rams have some quality free agents hitting the market. The organization also will need to address Matthew Stafford’s contract with a new near top of the market extension. How Les Sneed manages this will be fun to watch as always.
Houston Texans as you may have guessed is the team I follow very closely compared to the league. The team is in a difficult spot. New GM Nick Caserio shifted money to 2022 in hopes of fielding a contending roster in 2021. The team finished with 4 wins. For 2022 the organization is saddled with limited cap space, a ton of roster spots to fill, and (already) $35+ million in dead money already allocated to the salary cap. We will dive into detail in subsequent newsletters.
Important League Dates
February 22 - Teams can apply a franchise or transition tag tender to one player on their roster. The amount is derived from a formula and 120% of their previous cap number, whichever is higher. The tender will be applied to the salary cap once the transaction is processed (i.e. submitted by the team).
March 1-7 - NFL Combine. A good chunk of “business” is conducted between teams and agents, and between teams themselves.
March 8 - At 4pm EST the window for applying a franchise or transition tag tender closes.
March 14-16 - Known as the “legal tampering” period. Quite silly given how much illegal tampering occurs in the days leading up to this.
March 16 - 4pm EST the 2022 league year begins. All teams must be cap compliant. All options, tenders, and qualifying offers must have been submitted. At this time the 2021 player contracts expire. Free agency begins at this time as well. Trades can also become official at this time.
Teams will be quite busy the next 3 weeks between contract extensions, restructures, releases, trades, and new player signings. Between a big rise in salary cap now and in the future, coupled with a potential for a whirlwind quarterback carousel incoming this should be an offseason free agency period to remember.
Thanks for reading Cap & Trade! Subscribe for free to receive new posts and support my work.