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Volume 21 No. 2
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Slight revenue revision may raise NFL cap

The NFL took in $9.7 billion of revenue in 2012, a 2 percent increase from earlier internal estimates, sources said. As a result, the 2013 salary cap, which is expected to be set by Saturday, when teams can begin negotiating with free agents, may be slightly higher than previously projected.

The league had informed owners in December that the salary cap for 2013 would be $120.9 million, a few hundred thousand dollars more than 2012’s cap. It might now rise to as much as $123 million, though the precise figure remains a moving target.

While the increase might seem small, a flattening cap is strapping many of the league’s teams, so even a minor upward adjustment is welcome.

The new collective-bargaining agreement, put into place in 2011, has done two notable things related to the cap. It has corralled the rising salary caps that characterized the previous CBA, and it has shifted more of the players’ take into benefits such as pensions, health care plans and workers’ compensation, dollars that aren’t accounted for under the cap.

It’s unclear what caused the NFL to revise upward the 2012 revenue figure. A league source in January pegged the figure at $9.5 billion and several weeks later revised it to the higher amount.

The league’s revenue has now risen from $8.5 billion in 2009 to the $9.7 billion mark for 2012.

The NFL declined to comment.

One team source said the change could be due to any number of factors, including late incoming merchandise orders or revenue from sponsors and advertisers tied to TV ratings that might have come in higher than any target noted in an agreed-to contract.

The NFL knows what is coming in this year from national deals such as TV contracts, but the cap also has to reflect local revenue that’s not fully materialized, such as ticket sales. That means the league uses the previous year as a gauge in setting the cap for the coming season. If some of the extra revenue that caused the bump to $9.7 billion came from these local sources, it would affect how much local revenue the league estimates for 2013 in determining the cap.

Also, if more revenue materialized in 2012 than was expected in setting that year’s cap, the difference would have to be paid to players in future years.

The cap each year is set in part based on formulas detailed in the CBA — complex formulas that also changed with the new CBA — and also through negotiations between the NFL’s labor group and the NFL Players Association.