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ESPN agrees to TV deal with NFL, setting up possible salary cap bump for 2021

All of the league’s TV deals appear to be nearing completion, and the contracts may be officially announced in the next few days.

NFL: NOV 16 Vikings at Bears Photo by Robin Alam/Icon Sportswire via Getty Images

At this point, it’s a matter of days, not weeks or months, before the NFL announces the framework of its new television contracts. The final media company to agree to the basics of a deal with the NFL was Disney, which owns ESPN and ABC; according to the Sports Business Journal, the two sides have agreed on the structure of their new contract as of Friday afternoon.

SBJ reports that all of the other major networks — CBS, NBC, and FOX — along with Amazon have already reached this same point in their negotiations. That means that with the final major player on board, the details should come together quickly to finalize all of the contracts. Indeed, SBJ says that media networks hope that all of them will be finalized and announced next week.

The timing of the agreement on these contracts is critical for the NFL, which has been waiting to announce a salary cap number for the 2021 season. These new deals, which reportedly involve several networks paying double the amount in their previous contracts, will result in a significant influx of revenue for the NFL. By the terms of the collective bargaining agreement signed last spring, players’ share of league revenue is set to increase to 48 percent in 2021 and beyond, and so these deals should set up a massive jump in the salary cap numbers in future years.

However, with the agreements likely coming before the 2021 cap number is set, some of the increase in revenue may get rolled into the coming year to help offset the reduction in cap expected as a result of revenues lost due to the COVID-19 pandemic. One question is whether the NFL Players Association, which negotiates the cap number with the league, will try to push harder for a more spread-out cap reduction, taking a smaller increase in the next few years to allow for a higher cap number in 2021.

Those hoping for a higher 2021 cap have reason to be optimistic today, however. Although the cap will be no lower than $180 million, as the NFL told its teams last week, finalizing these deals could push it higher and may alleviate the financial concerns facing several teams, including the Green Bay Packers. Green Bay is currently projected to be about $12 million over the cap if it comes in at $180 million, meaning that any increase in the cap will provide significant help as the team tries to maintain financial flexibility for the coming season.

In 2020, the league released projections of the cap on February 28th, estimating the cap to be about $200 million, but the final value was not formalized until March 15th, just three days before the start of the league year. If that schedule holds, teams would learn of the final cap value on March 14th this year, though the league has yet to formalize a projected cap number — only releasing the minimum possible value of $180 million.

Stay tuned next week for more news about the TV deals and their potential impact on the 2021 cap.