LA Rams Salary cap: Setting stage for 2021

17 games and a new CBA

Each year, the NFL looks at the previous year’s revenue and sets a new salary cap for the current year. The salary cap is predetermined by the NFL-NFLPA contract and with the new agreement, sets the salary cap at 47% of the annual NFL revenues in 2020.  The normal trend was fairly positive, with each new year showing a healthy increase from the previous year’s ceiling.

For 2021, the salary cap is set at 48 percent of the annual revenue of the NFL and can increase to 48.5 percent if the league adopts a 17-game season.  Of course, all of this was established just before the coronavirus pandemic obliterated the 2020 revenue stream. Here is where we must recall what we said about the salary cap.  This year’s cap is based upon last year’s revenue. But with 2020 revenues down dramatically, what of the salary cap?

Well, the NFL-NFLPA met to avoid a precipitous drop and agreed to set a minimum salary cap of $175 million for the 2021 season. Now with a floor, teams could preplan to set up their 2021 salary expense with some assurances that they can pay their players.

Anticipating some challenges in 2021, the LA Rams bit the bullet in 2020 to relieve salary cap pressures on the team for 2021 and were extremely wise to do so.  It paved the way for the Rams to commit to trading Jared Goff this year, as the team has taken on very similar dead cap amounts over the past two seasons.

Even still, previously signed contracts are still in effect. So the LA Rams’ total salary cap expense for 2021 is currently estimated at over $210 million, while current estimates set the cap ceiling at or about $185 million.  So how can the LA Rams create cap space? And once under the cap, how can the Rams structure new contracts to stay there?  Those are the next salary cap articles.