Per the Collective Bargaining Agreement (CBA), the NFL and NFLPA have an established formula for determining the league's salary cap for each season. Typically, the NFL uses the profits/losses from the year prior to help guide how much the salary cap will increase/decrease.
For over a decade the salary cap saw significant gains, but due to the COVID-19 pandemic, they took massive losses in 2020. As a result, the NFL and NFLPA opted to intervene on the predetermined formula, in order to avoid absorbing the loss in just one season—which would have seen the salary cap drop an estimated $70 million.
Instead, they chose to spread out the losses over multiple seasons, and as a result, the 2021 salary cap dropped from $198.2 to just $182.5 million. With stadiums expected to be at full capacity again in 2021, the NFL and NFLPA are estimating a profitable season and the salary cap should once again begin to rise, but there is still an outstanding loss from the 2020 season that needs to be accounted for.
While the net profitability of the 2021 season is far from determined, teams need to have an idea of a workable budget for long-term planning purposes. Therefore, the NFL and NFLPA have agreed that based on profit expectations and the funds from the shortfall still outstanding, the 2022 salary cap will not exceed $208.2 million.
The NFL and NFLPA have agreed to a $208.2 million salary cap ceiling for 2022, per source.— Tom Pelissero (@TomPelissero) May 26, 2021
There is no cap floor as of now. The sides agreed last August to spread the COVID-related revenue shortfall from 2020 over several years, and the cap dropped to $182.5M this year.
After the season is concluded (typically in February), the league’s accountants will determine how profitable the season was and the salary cap will be finalized at that time. But for the time being, general managers at least know how cautious they need to be with their team finances.
At the time of this publication, the Detroit Lions have 42 players signed for the 2022 season, accounting for an estimated $182.3 million of the salary cap next season, per OverTheCap.com. From a league perspective, that slots them in with an estimated 16th most salary cap available heading into next offseason.
Now, that number is still very fluid.
The Lions have 90 players on their current roster, and depending on who makes the 53-man roster, some of the 42 players may no longer be under contract next season and the estimated cap may be lower. There will also be players cut in the offseason which will lower the number even further. Additionally, there will be some leftover cap from the 2021 season that GM Brad Holmes can carry over into 2022 helping increase their spending amount.
This is a positive sign that the league is heading in the right direction with their salary cap, and with the new TV deal set to kick in in 2023, it’s possible the NFL will have made up their losses fairly quickly. That’s good for the league, good for the players, and good for the fans.