The NFL and NFLPA have a collective bargaining agreement in place that will expire following the 2020 season. The two sides are reportedly interested in talking about an extension before the deal expires, but odds are pretty good we won’t see an agreement by the end of the 2020 season. I suspect we see a labor stoppage, but maybe the two sides will find some common ground.
Barring an extension between now and March 2020, next offseason will be the “Final League Year.” That is the formal CBA designation of the last year before the contract expires. The Final League Year brings with it some changes to how the salary cap and contracts work.
This offseason, teams are allowed to use either a franchise tag or a transition tag. In the Final League Year, they can use one of each. The 49ers most notable unrestricted free agents next offseason are currently Joe Staley and Arik Armstead. Matt Breida and Nick Mullens will see their contracts expire, but Breida will be a restricted free agent, and Mullens will be an exclusive rights free agent.
No post-June 1 designations
When the new league year starts, teams are allowed to release a player and designate him as a post-June 1 release. When a player is released, their prorated signing bonus money and any guaranteed money rolls up as dead money on the current salary cap. If designated a post-June 1 cut, the money is spread between the current season and the next season. The Final League Year means any players released will see all their cap money roll up on the 2020 cap, and not able to be split between 2020 and 2021.
Graziano noted that this means we could see some different structures of contracts to limited 2020 dead money. We saw this last year with the 49ers using roster bonuses more than signing bonuses to take advantage of their excess of 2018 cap space. I suspect we see more of that in the way they structure any big deals this offseason. The 49ers have a ton of cap space at this point, so it could provide an edge in negotiations.
Contracts often include Not Likely To Be Earned (NLTBE) incentives to provide players an opportunity to earn more money while also delaying the cap hit. For example, if a player had 1,000 receiving yards in 2018 and signed a contract in 2019 that included a $1 million incentive for reaching 1,100 yards, that incentive would be NLTBE and would not immediately count against the cap. If the player did not reach the yardage total in 2019, it would never count. If the player did reach the yardage total, the $1 million is applied after the season retroactively.
In the Final League Year, if that NLTBE incentive is earned in Week 15, the bonus hits the cap immediately and has to be accounted for then, not after the season ends. The 49ers have plenty of cap space, so I don’t think ends up being a real issue, but teams facing more of a crunch will have to keep this in mind. As mentioned above, it might be a way for the 49ers to one-up other contract offers.