The New TV Deal And The Salary Cap

Earlier today, the NFL announced an agreement with CBS that will see the network produce 2014’s Thursday Night Football games, with half of those broadcasts moving over to CBS from the NFL Network. Most fans will only notice the immediate impact of the agreement based on what channel they tune into each Thursday, but in the longer term, the additional revenue created by the deal will significantly affect the salary cap, creating a bump in spending power for NFL teams, write Mike Florio of Pro Football Talk.

While the exact numbers have not yet been released, Florio estimates that the deal could be in the area of $300MM, and after factoring the loss of advertisement revenue (since the NFL will no longer be the sole provider carrying these games), he believes that the NFL may see a net gain of approximately $250MM. Because the salary cap is calculated based on the previous year’s revenue, the new arrangement will not affect the 2014 cap number. That being said, NFL franchises may have an extra $4MM to work with in 2015.

Having an extra $4MM to work with down the road could be a huge advantage for general managers in tight cap situations this offseason. The Super Bowl champion Seahawks, who are thinking about an extension for Earl Thomas, and eventually Richard Sherman and Russell Wilson, may be able to push some more money for their stars into the future during negotiations this offseason. That way, they could leave room under the cap this year to re-sign key players such as Michael Bennett or Golden Tate, as the team looks to make another run at a championship.

The 49ers are in a similar situation, as they believe their window to win a championship is now. While they talk with Colin Kaepernick about an extension that will certainly pay him like a franchise quarterback, they may be able to keep short-term cap space available for their own free agents.

Another option available to a team looking to improve its roster is the restructuring of veteran contracts. While restructuring is often viewed as a great short-term tool, it can be crippling to a team’s cap situation down the road, as is the case now in Carolina, where the Panthers are trying to find a way to re-sign Greg Hardy despite the dead money already on the cap in 2014. Additional future cap space could alleviate these concerns to a certain extent. One huge restructure has already occurred this offseason, as Larry Fitzgerald and the Cardinals have agreed on a new deal that will benefit both parties. Fitzgerald’s restructured contract will open up $9.4MM of spending money for the Cardinals during this offseason, while it will add an additional $2.35MM each of the next four years. An extra $4MM of cap space from the Thursday Night Football deal should help absorb that blow.

Ultimately, since every NFL club will be playing with the same amount of money, the new TV deal isn’t going to cure any one team’s cap situation, but a good general manager might be able to find a way to use that idea of an extra bit of wiggle room down the road to put the most competitive product on the field in 2014.