In a surprising announcement on Thursday, the NFL announced that the 2021 salary cap is expected to increase from $175 million to $180 million.
It was known for a while that the NFL would be decreasing the salary cap from 2020’s $198.2 million cap number due to the global pandemic. However, the 2021 cap was expected to be at $175 million.
After talking with the NFLPA, the NFL decided to increase it by an additional $5 million.
"As you know, one aspect of the agreements negotiated last summer with the NFLPA to address operations during the pandemic provides that the 2021 Salary Cap will be no less than $175 million,” the NFL said in a memo to all 32 teams.
“Following discussions with the union that addressed both actual 2020 revenues and projected attendance for the 2021 season, we have agreed to increase the minimum Salary cap for the 2021 League Year to $180 million.”
The league added that the $180 million is the minimum number for the 2021 salary cap. After reviewing the 2020 financial figures, the NFL will come to an official number.
How the Salary Cap Affects Betting
When the NFL is in an offseason, betting on free agent signings becomes extremely popular. While teams were budgeting for a $175 million, the extra $5 million could give some extra wiggle room for signings.
For example, when it was announced that J.J. Watt was released by the Houston Texans, the Pittsburgh Steelers had top odds of signing him (+150). A big part of those odds was the fact that Watt’s two brothers play in Pittsburgh.
However, the Steelers were estimated at being around $30 million over the cap, so their odds moved to +550. Even though an extra $5 million may not seem like a lot in the grand scheme of things, it can make a difference. Now, the Steelers will have extra wiggle room to restructure pre-existing contracts to make room for Watt.
Not only can the salary cap change affect NFL free agent signings, but it can also impact the odds on trades.
On February 9, BetOnline released odds on a possible Russell Wilson trade after it was rumored that he may be available. Assuming they move away from Dak Prescott, the Dallas Cowboys had the second-best odds on that list at +600. Meanwhile, Wilson has a cap hit of $32 million next season.
The extra $5 million gives the Cowboys more of an opportunity to either move, release or restructure contracts if they’re interested in Wilson.
Will the NFL Salary Cap Increase in the Future?
While no one can predict the future, the NFL salary cap should increase as soon as league revenue returns to normal. The COVID-19 pandemic hurt the NFL’s financial numbers as a limited number of fans could attend games.
Initially, it was projected that the 2021 salary cap would’ve been at $160 million, which would’ve been awful for most teams.
However, ESPN is projecting that if revenue can get back to “normal” numbers, the salary cap could be anywhere around $220 million or above in 2022 and 2023.
ESPN adds that the NFL could then take $10 million from each year to make up for the $20 million difference between the projected $160 salary cap and the actual $180 million floor for 2021.