The NFL football season kicked off a few days ago with a match-up between the Houston Texans and the Kansas City Chiefs. Bragging rights go to KC.
In an unprecedented time due to COVID-19, no preseason games were played prior to this opening game, but that was not the plan when the new Collective Bargaining Agreement (“CBA”) was negotiated.
(NFL COVID-19 Updates --> https://nflpa.com/covid-19-updates-information)
There were many significant changes made to the CBA that will now be in effect through the 2030 season and several of those changes are outlined here:
- Training Camp Rules and Shortened Preseason
There were many changes made to how training camps are run to ensure that players have more time to recover. Included in those changes are the following:
- A five-day acclimation period (no pads to get used to the heat).
- 5-hour limit on padded and full speed practices.
- No more than 3 consecutive days of practice in 3 out of 5 weeks of camp.
- No more than 2 consecutive days in the other 2 weeks.
- Joint practices with other teams limited to 4.
- Mandatory 1 day off every 7 days, with 2 days off in the first week.
- No more than 16 days in full pads per training camp.
In addition to these rules governing training camp, the NFL preseason was shortened from 4 games to 3 games. Beginning in 2021, each team will play 3 preseason games with the fourth week being a bye week.
Fun fact: The last time the preseason was shortened from 6 games to 4 games occurred in 1978, the same year the NFL regular season increased from 14 to 16 games.1
- 17-Game Regular Season
The 16-game regular season will remain in effect for the 2020 season. However, every team will play 17 games (replacing one of the preseason games for a regular season game) starting in 2021.
The NFL season is already long enough as it is. Adding another game will likely affect players’ long-term durability in a negative way but with one more game to rack up stats, we can expect to see more records broken going forward.
- The Playoffs Expand from 12 to 14 Teams
Starting in 2020, a third wild card team will be added to each conference, expanding the playoffs to 14 teams. Only one team from each conference will earn a first-round bye as a result.
- Roster Sizes Increased (Including Practice Squad)
As a tradeoff for adding another week to the regular season, the NFL increased roster sizes.
- The active roster expanded from 53 to 55.
- The practice squad expanded from 10 players to 12 (2020 – 2021)*, then will grow to 14 starting in 2022.
- Active game-day rosters increased from 46 to 48 players.
*As a result of COVID-19, the NFL increased the practice squad size to 16 for the 2020 season with the additional 6 slots available to players with any amount of experience. Historically, veteran players with more than 2 seasons under their belts couldn’t be placed on the practice squad. The new rule has allowed for Josh McCown to become the oldest practice squad “player” at the age of 41. Josh will make $12,000 per week acting as a player coach and mentor for the Philadelphia Eagles working remotely in Texas.2 Not a bad gig.
- Revenue Share: 48% Guaranteed
The NFL is a multibillion-dollar company, so the revenue share was a big negotiating factor in this new CBA. Players are set to receive the following:
- 47% of annual revenue in 2020, plus about $100M in new Player Costs above current CBA for 2020.
- Guaranteed 48% share of revenue in 2021, with ability to increase the percentage to 48.5% share through a media kicker which applies in any season the league plays 17 games.
- Projected increase of around $5 billion to players during course of a new 10-year deal.3
- Raises and Minimum Salaries
Players raises are set to increase in the following fashion:
- Rookie Minimums: $100k increase in 2020, $50k increase in 2021, and then $45k increase each year after. By the 2030 season, the rookie minimum will be up to $1.065M (up from $495k in 2019).
- Veteran Minimums: At least $90k increase in 2020, $80k to $105k increase in 2021, and then $45k increase each year after. The minimum for a veteran with 7 or more credited seasons will be $1.48M in 2030 (up from $930k in 2019).
- Practice Squad: Raises for practice squad players with minimum set at $16,750 per week in 2030 for players with less than 2 years of experience ($8,400 per week in 2020) and $21,750 a week in 2030 for players with 2 or more years of experience ($12,000 per week in 2020).
- Performance-based pay pool increased.
- Fewer Fines (Marijuana Rules Loosened)
The NFL has been criticized for having rules and fines in place that diminish the fun for the fans which has led to the nickname the No Fun League. Under the new CBA, the NFL hopes to redeem itself by being less punitive.
- SOME, but not all, league fines for on-field violations have been reduced. For instance, a blindside block will now result in a fine of $15k for the first offense and $20k for the second (previously $24k and $48k, respectively).
- The Clubs will operate under a “Progressive Discipline” system whereby a player’s first fine for a specific club infraction can be assessed at 40% of the maximum fine amount, second fine will be assessed at 70%, and the third infraction is assessed at 100%.
- Violations of the Player Conduct Policy will now be heard by an “independent” discipline officer who will be selected jointly by the NFL and NFLPA.
A lot has changed in the country in respect to marijuana since the old CBA was negotiated. With more and more states legalizing the once prohibited drug, the NFL has reduced its punishments on marijuana use with the new CBA.
- Increased emphasis on clinical care rather than punishment (no suspensions for players receiving clinical care)
- Significant reduction of penalties for marijuana use (no suspensions for positive tests; annual testing limited to first two weeks of training camp; higher thresholds for positive tests -- 150 nanograms instead of 35; violations of law for possession "generally will not result in suspension")
- Increased discipline for DUIs (three-game suspension for each violation)
- Rookie Contracts and Minimum Salary Increases
Players drafted in the first round of the 2018 NFL Draft (or later) who excel early in their career will get a significant bonus.If a player makes the Pro Bowl twice in their first three seasons, their fifth-year option will increase to equal the price of the franchise tag.
For players selected in the third through seventh rounds of the 2017 NFL Draft (or later) as well as players drafted in the second round of 2018, there will be a formula for guaranteed salary escalation in the fourth season for players who play a certain number of snaps through years one to three.
- International Games
While COVID-19 has eliminated international games for the 2020 season, here are the rules surrounding international games in the future:
- No more than 10 international games per season from 2020 – 2025.
- Any team playing more than one international game in a season will pay players a $5,000 stipend for each additional game.
- Benefit Changes
Feel free to read our Overview of NFL Player Benefits prior to the CBA changes for a better understanding of what the league offers.
- Bert Bell/Pete Rozelle NFL Player Retirement Plan (Pension Plan): Pension contributions by NFL teams will go up by 10% annually. Even former players who have retired from the NFL will receive an increase to a minimum of $550 per monthly benefit for each season played.
- NFL Player Second Career Savings “401(k)” Plan: The annual matching contribution limit by each NFL team is increased from $28k per player to $30k per player. The player must contribute to the plan in order to receive the match. Under the new CBA, practice squad players can receive a match of up to $1,500 per year where the previously received no match.
- NFL Player Annuity Program: Annual contributions by teams to will increase to $100k per year for players with at least 4 credited seasons, up from $95k in the old CBA, and will increase by $15k in even calendar years.
- Gene Upshaw NFL Player Health Reimbursement Account ("GU HRA"): Under the old CBA, players received an HRA contribution from their NFL teams of $30k per credited season, and there was a lifetime cap of $350k. Under the new CBA, contributions are increased to $35k per season in 2020 and will climb to $50k per season in 2030. The cap was also increased to $450k. Former players who never had a Health Reimbursement Account will be granted a one-time HRA credit of $50k.
- NFL Player Severance Plan: Under the old CBA, any player who received a credited season for 2020 would receive a credit towards their severance of $22,500. Under the new CBA, this amount is increased to $30k, and will continue to increase up to $50k in year 2030.
1 – www.nytimes.com (2020)
2 – www.espn.com (2020)
3 – www.nfl.com (2020)
Reggie D. Ford, CPA is the Founder and President of Rosecrete Wealth Management. Rosecrete provides personalized, comprehensive financial services to affluent and high net worth clients. Rosecrete focuses on sports, legal, and medical industries with a passion for helping younger generations with early retirement planning.
Securities and Advisory Services offered through LPL Financial, a Registered Investment Advisor, Member FINRA/SIPC.
For a list of states in which I am registered to conduct securities business, visit my website at www.rosecrete.com.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
Investing includes risk including potential loss of principal.