How the absence of a new CBA could dramatically alter the 2020 NFL offseason

"Final League Year" rules would leave many teams with difficult decisions.

For a brief moment, it looked like the NFL and the NFLPA were going to get these CBA negotiations over in a hurry. The league was going to get what it wanted (a 17-game season and expanded playoff field) and the players were going to get what they wanted (more money and relaxed testing for marijuana). Then the details of the league’s proposal were publicized, and it quickly became apparent that the two sides weren’t so close.

The owners were essentially asking many players to play those extra games for less money than they normally would make for a regular-season game. Here’s how the league explained it…

“Bonus payment of 1/17 of his paragraph 5 salary up to $250K to any player whose contract runs through a season when 17 games is played”

While some players would be getting their regular paycheck for that extra game, the higher-paid players would not. So it’s not a surprise that those higher-paid players weren’t huge fans of the deal. J.J. Watt tweeted this…

Which was liked by Russell Wilson…

And co-signed by Richard Sherman…

So, yeah, that deal is not getting approved by the players. What could that mean for this offseason? A whole lot actually! Let me explain…

When the last CBA expired, the NFL operated with no salary cap for the 2010 season. But it wasn’t just a Wild West situation. The league sent out a warning that any teams trying to game the system for future salary cap benefits would be punished. And that’s exactly what happened to the Cowboys and Redskins after both teams tried to take advantage of the uncapped year by structuring deals with most of the money coming during the 2010 season, which led to smaller cap hits in the following seasons.

In order to prevent that from happening again, the league implemented what a set of “Final League Year” rules. If the NFL and players association don’t come to an agreement over the next few weeks, those rules could have a major impact on how teams build their rosters this offseason.

Let’s take a look at those rules…

1. Teams are permitted to use both the franchise tag and transition tag

Under normal circumstances, NFL teams can only use one tag per offseason. In the Final League Year, that’s not going to be the case. This works out for a team like the Cowboys, who could theoretically use the franchise tag on Dak Prescott and use the transition tag on Amari Cooper. The transition tag allows a free agent to negotiate with other teams but his original team can choose to match the contract. It would receive two first-round picks from the player’s new team if it chose not to match the offer.

2. The 30% rule

While that first rule will help teams keep their top players on the roster, the 30% rule will make it difficult for teams with little cap space to sign their players to extensions. The rule prohibits teams from offering contracts that include an increase of more than 30% from a player’s 2020 base salary. Signing bonuses are not included in the calculation.

In other words … a team can’t give a player a contract that includes a 2020 base salary of $5 million and a base salary of $7.5 million the following season, as that would be a 50% increase. The max salary the team could offer that player in 2021 would be $6.5 million.

The 30% rule will affect a team like the Rams, who can’t afford to tag star linebacker Cory Littleton. Giving him an extension will also be difficult because they don’t have much cap space in 2020 and the 30% rule prevents them from giving him a lower salary in Year 1 before giving him a significant raise later on in the contract.

In order to fit Brandin Cooks’ contract under the cap in 2018, the Rams gave him both a roster bonus (which was guaranteed at signing) and an option bonus that would be paid in the second year of the contract (2019). An option bonus basically works the same as a signing bonus, only the player gets it in Year 2, so that first-year cap hit stays low. Cooks’ cap hit was just $5.4 million in 2018 but jumped to $15.3 million in 2019.

Here’s the problem: For the 30% rule, roster and option bonuses are included when calculating a player’s base salary. So while Cooks’ base salary actually decreased from $4 million in 2018 to $1 million 2019, his contract would not have been compliant with the 30% rule because of the $12.9 million he made in option and roster bonuses in 2019.

Unless a new CBA is signed between now and the start of free agency, the Rams will almost assuredly have to let one of their best players hit the open market.

3. No June 1 cuts/trades

With a CBA in place, teams would be able to designate players as June 1 cuts, which would move a portion of that player’s dead money charge to the following season. Welp, not in the Final League Year. If a team wants to cut a player, the full dead money charge will apply to the 2020 season regardless of when the transaction is made.

Let’s use Sammy Watkins as an example. He has a 2020 cap hit of $21 million, but only $7 million of that is guaranteed. In past years, the Chiefs could declare him a June 1 cut, which would be split his dead money in two and spread it out over two seasons. So a $3.5 million charge in 2020 and another in 2021. With no June 1 option, Kansas City will be forced to accept the full $7 million charge this season.

The June 1 rule applies to trades as well.

So without a CBA, teams may be less inclined to cut or trade a player with a lot of dead money left on his deal.

4. In-season incentives are counted against the cap immediately

Performance-based incentives fall into one of two categories: “Likely to be earned” and “Not likely to be earned.” The former counts against the salary cap as soon as the league year begins. The latter isn’t counted toward the cap until after the season.

Before we get into what’s different for the Final League Year, here’s how incentives are categorized:

Let’s say a player’s contract includes a bonus for playing at least 14 games. The league uses the previous season to determine whether or not that bonus is likely to be earned. If that player played in 13 games the previous season, it’s considered “not likely to be earned.” Had he played in 14 games the previous season, it would be considered a “likely to be earned” incentive.

If a player earns an NLTBE bonus, the team doesn’t have to account for the increase in pay until after the season, so teams can use those bonuses to give players more money without it costing them short-term cap space. Meanwhile, likely to be earned bonuses count against the cap at the start of the league year. Teams receive a cap credit if the player fails to earn the bonus.

In the Final League Year, a team must fit NLTBE bonuses as soon as they are earned. Teams will have to keep salary-cap space open just in case.

Let’s use A.J. Green as an example. A team could offer him a $5 million bonus if he plays in 8 games during the 2020 season. If he’s healthy, that’s a benchmark he’s definitely going to reach; but for salary cap purposes, it’s considered not likely to be earned, so it wouldn’t count against a team’s cap until after the season. In the Final League Year, if a team offers Green that money, they’ll have to keep that $5 million is space available throughout the season.

So basically all bonuses have to be treated as if they’re likely to be earned, giving teams less cap flexibility before and during the season.