In a report released earlier this week by Forbes Magazine, the New York Giants will lose the third most money among the 32 NFL teams if games are played in empty stadiums in 2020.
According to Mike Ozanian of Forbes Magazine, NFL teams derive an average 38 percent of their revenues from in-stadium attendance. That includes ticket prices, parking, concessions, and souvenirs. Based on 2018 numbers, Ozanian forecasts a $5.5B combined loss for the league if it plays the 2020 season without fans in the stands. Some teams will feel the hit more than others, including the New York Giants.
Due to the balanced distribution of national television contracts and what various teams charge for the stadium experience, the percentage of stadium revenue varies. The New York Giants are much higher than the league average. They get 50.48 percent of their total revenue from game day related income. Using 2018 numbers, the New York Giants took in a total of $519B. That means a full season with no fans will put a $262M dent in their coffers, third-highest in the league.
No one is saying that the losses from 2020 will bankrupt Giants owners John Mara and Steve Tisch. It’s not like either of them is a Wilpon. As a business, the team doesn’t spend every penny it makes each year. Big Blue will have more than enough money to keep the organization running successfully. More importantly, they will have plenty of cash to use on signing bonuses. Guaranteed money is king in the world of NFL contracts.
Salary cap freefall
A little more math is needed, however, because some critical “trickle-down” effects have to be taken into consideration.
In 2021, the NFL salary cap is derived from 48 percent of football-related revenue in 2020. If that revenue is reduced by $5.5B, the players will take a substantial financial loss. Forty-seven percent of 2019’s revenue brought the salary cap to $192.2M per team. Per the Collective Bargaining Agreement, a 38 percent drop in revenue could result in a drastic decrease to the cap. Each team might only have around $120M to spend on contracts.
Using salary information from overthecap.com, the New York Giants could choose not to re-sign Leonard Williams and Cam Flemming; plus, cut Nate Solder, Golden Tate, Evan Engram, Deandre Baker, and Spencer Pulley after 2020, and they would still be at a payroll of $134.57M.
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That’s still way above the cap and doesn’t include the new contract Saquon Barkley will want as he enters his fourth pro season.
Unless the NFL and Players Association can come to a new agreement (and maybe if they do), it will be the Wild West when it comes to cutting players and signing free agents. Teams will have to reboot their rosters in each of the next two seasons because so many players would be on a one-year contract in 2021.
What do you think the financial fallout for the New York Giants and the NFL, as a whole, will be if the 2020 season is played without fans in the stands? Let us know in the comments section below or on social media.