NFL salary cap discussion (2 Viewers)

[Hankmoody]

I have had a lot of PM's and questions about how the NFL salary cap works, so I thought I would put together an amalgamation of a bunch of important points.

Salary cap 101

• All NFL teams must stay within a "cap" that they can spend on players. This isn't necessarily down to the penny what they pay a guy every year, but that's a good enough generalization to get us started.
• The NFL cap is determined by league revenues and adjusted every year. For the 2024 season this cap is $255.4M
• Any unused cap space from the prior season can be "rolled over" into the current league year. The Las Vegas Raiders, for example, had $11,518,249 unused cap space, so they start 2024 season with $266,918,249 in cap space.
• Dead money can be roughly summarized as "money that's been physically paid to a player but not yet accounted for on the cap". That will be examined in detail as we progress.
• Only the Top 51 contracts count against the cap. All players below 51 are exempt from cap accounting. This allows teams the flexibility to expand rosters, sign IR replacements, promote Practice Squad players, etc. If any such transaction puts that player into the Top 51 salary cap hits then the team must remain within the structure of the salary cap rules

Accounting

• Salary - all scheduled salary, whether guaranteed or not, are accounted for in the scheduled league year.
• Signing bonus - this is a big fat check given to the player the day they sign. This money can be accounted for ("spread out") over up to 5 years starting with the current year.
• Roster bonus - another "up front" check the player earns, usually some time in the short future ahead. Roster bonuses are accounted for all in the current year.
• Other bonus - generally all other bonuses are paid out and accounted for in the current league year. Some common examples will be looked at as we progress.
• Restructuring - sometimes called a bonus, this is when an amount (generally salary) that would normally hit on the current year is converted to a "signing bonus" that is then spread out. This will be discussed in detail as we progress.

Please hold replies so I can reserve a few posts for future points

Simplified example

The Columbus Champions are an HMFL franchise. They have no rollover cap, no dead cap, and are operating with a $250M salary cap. Start with a couple of players currently under contract:

QB - 5 years, $250M contract, paid out exactly $50M salary per year.
WR - 3 years, $60M contract, $18M salary in 2023, $20M salary in 2024, $22M salary in 2025.

I'm only going to track one future year as rarely do contracts have significant impacts that require active cap management beyond "next" year

2024	Salary	Signing	Roster	Other	Cap hit
QB	$ 50,000,000				$ 50,000,000
WR	$ 20,000,000				$ 20,000,000
49 others	$ 150,000,000				$ 150,000,000
Total					$ 220,000,000

So Columbus has $30M in cap space for 2024. If they don't spend any more (they could sign a big FA that gets waived, or trade for Chase Young for a playoff run, etc) they would roll $30M into 2025

2025	Salary	Signing	Roster	Other	Cap hit
QB	$ 50,000,000				$ 50,000,000
WR	$ 22,000,000				$ 22,000,000
49 others	$ 120,000,000				$ 120,000,000
Total					$ 192,000,000

Columbus is scheduled to be $63M below the 2025 cap - probably due to big dollar contracts being up and those players hitting Free Agency so other minimum salary guys now fill the last Top 51 slots. They'll likely have to re-sign those guys or be active in Free Agency to replace them and spend much of this cap space. Remember though, the cap will almost certainly go up every year, so they likely have much more than $63M in available space once the league business officially opens.

Signing bonus

Now Columbus signs a RB to a 3 year, $20M contract. This RB is a little old so he wants most of his money up front. Columbus doesn't want to take a monster hit to 2023 however, so they agree on a signing bonus that's spread across the three years of the contract:

RB - 3 years, $20M contract, $9M signing bonus, $1M salary in 2023, $4m salary in 2024, and $6M salary in 2025

The $9M signing bonus is spread out as $3M on each year of the contract so cap hits are:
2024 - $3M signing bonus allocation + $1M salary = $4M cap hit
2025 - $3M signing bonus allocation + $4M salary = $7M cap hit
2026 - $3M signing bonus allocation + $6M salary = $9M cap hit

Player chart - this is roughly the format used by popular salary cap tools like Spotrac and Overthecap, simplified for this discussion

Player	Salary	Signing	Roster	Other	Cap hit
2024	$ 1,000,000	$ 3,000,000			$ 4,000,000
2025	$ 4,000,000	$ 3,000,000			$ 7,000,000
2026	$ 6,000,000	$ 3,000,000			$ 9,000,000
2027					$ -
Total					$ 20,000,000

Team chart

2024	Salary	Signing	Roster	Other	Cap hit
QB	$ 50,000,000				$ 50,000,000
WR	$ 20,000,000				$ 20,000,000
RB	$ 1,000,000	$ 3,000,000			$ 4,000,000
48 others	$ 150,000,000				$ 150,000,000
Total					$ 224,000,000

2025	Salary	Signing	Roster	Other	Cap hit
QB	$ 50,000,000				$ 50,000,000
WR	$ 22,000,000				$ 22,000,000
RB	$ 4,000,000	$ 3,000,000			$ 7,000,000
48 others	$ 120,000,000				$ 120,000,000
Total					$ 199,000,000

 

[Hankmoody]

Dead money

• Dead money is applied under any circumstance that a player is removed from the team's roster - retirement, trade, cut/waived.
• Dead money takes on a few forms. Roughly speaking it's "money already paid (or owed) that hasn't been accounted for.

Simple example

Columbus signed OT in 2022 to a 4 year, $50M contract with a $20M signing bonus and salaries of $1M, $9M, $10M, and $10M
The signing bonus is spread out over 4 years, so $5M per year

​

OT	Salary	Signing	Roster	Other	Dead	Cap hit
2022	$ 1,000,000	$ 5,000,000	$ 6,000,000
2023	$ 9,000,000	$ 5,000,000	$ 14,000,000
2024	$ 10,000,000	$ 5,000,000	$ 15,000,000
2025	$ 10,000,000	$ 5,000,000	$ 15,000,000
Total	$ 50,000,000

After the 2023 season Columbus decides to release OT. Since only $10M of the signing bonus have been accounted for, that leaves another $10M that must be recognized as dead money

​

OT	Salary	Signing	Roster	Other	Dead	Cap hit
2022	$ 1,000,000	$ 5,000,000	$ 6,000,000
2023	$ 9,000,000	$ 5,000,000	$ 14,000,000
2024	-	-	$ 10,000,000	$ 10,000,000
2025	-	-	-
Total	$ 30,000,000

Had OT had any guaranteed salary in either 2024 or 2025, Columbus would be required to pay OT that money and also account for that (since it's paid) as dead money.

Post-June 1

Players released after June 1st have their cap hits spread out over the "current" year and "next" year.* This applies for any player cut after June 1st, but NFL teams also have exceptions they can use - they can cut players before this date and "designate as post June 1st" for cap purposes. This helps the player a lot since they get to jump into Free Agency or contract discussions immediately instead of waiting until June 2nd for the official action since there are a lot less openings and a lot less available cap space for teams by that time.

So here's the player chart if Columbus decided to designate OT as a post-June 1st cut:

​

OT	Salary	Signing	Roster	Other	Dead	Cap hit
2022	$ 1,000,000	$ 5,000,000	$ 6,000,000
2023	$ 9,000,000	$ 5,000,000	$ 14,000,000
2024	-	-	$ 5,000,000	$ 5,000,000
2025	-	-	$ 5,000,000	$ 5,000,000
Total	$ 30,000,000

*I believe this formula recently changed? Anyone else that can cite a source feel free to weigh in here. I believe it used to be a 50/50 split, but now it's "all future prorations fall to next year".

Restructure

Restructuring a contract is a tactic teams use to push money from the current year into future years. They do this by taking a big current year cap hit, for example a $50M salary, and converting it to a signing bonus that is then spread out over future years. This is desirable for the players because they get a big fat chunk up front instead of having to wait until each game to get a check. Who wouldn't want 95% of their salary on Jan 1st with super small paychecks every two weeks after that? I know I would.

In our example, Columbus has a QB making $50M in 2024 and beyond:

​

QB	Salary	Signing	Roster	Restructure	Dead	Cap hit
2024	$ 50,000,000	$ 50,000,000
2025	$ 50,000,000	$ 50,000,000
2026	$ 50,000,000	$ 50,000,000
2027	$ 50,000,000	$ 50,000,000
2028	-	-	$ -
Total	$ 200,000,000

Should Columbus want to save cap space for 2024, they could do so (at the expense of dumping it into future years) by restructuring this contract. One decision might be to convert the $50M salary into a $2M salary with a $48M signing bonus spread out over 4 years.

​

QB	Salary	Signing	Roster	Restructure	Dead	Cap hit
2024	$ 2,000,000	$ 12,000,000	$ 14,000,000
2025	$ 50,000,000	$ 12,000,000	$ 62,000,000
2026	$ 50,000,000	$ 12,000,000	$ 62,000,000
2027	$ 50,000,000	$ 12,000,000	$ 62,000,000
2028	-	-	$ -
Total	$ 200,000,000

We can see a savings of $36M in 2024 but all of that money will have to be accounted for later on as seen in the new $62M future cap hits scheduled.

Void years

Void years are just an expansion of the Restructure concept above. They are dummy years added to allow for dumping more of the restructured money into the future. Consider the QB above but with only two years remaining:

​

QB	Salary	Signing	Roster	Restructure	Dead	Cap hit
2024	$ 50,000,000	$ 50,000,000
2025	$ 50,000,000	$ 50,000,000
2026	-	$ -
2027	-	$ -
2028	-	-	$ -
Total	$ 100,000,000

To restructure $48M of that over two years would save $24M in the current year, pushing that into 2025:

​

QB	Salary	Signing	Roster	Restructure	Dead	Cap hit
2024	$ 2,000,000	$ 24,000,000	$ 26,000,000
2025	$ 50,000,000	$ 24,000,000	$ 74,000,000
2026	-	$ -
2027	-	$ -
2028	-	-	$ -
Total	$ 100,000,000

Or the team could add two "void years" after 2025. These are technically years under contract but with the salary not guaranteed and they automatically void at some predetermined date. Because they are now contract years, that $48M can be spread across them. This saves an extra $12M in 2024 - but remember, it's just kicking the can down the road. The #1 rule of salary cap is that if you write a check, you eventually have to eat it on the cap.

​

QB	Salary	Signing	Roster	Restructure	Dead	Cap hit
2024	$ 2,000,000	$ 12,000,000	$ 14,000,000
2025	$ 50,000,000	$ 12,000,000	$ 62,000,000
2026	void	$ 12,000,000	$ 12,000,000
2027	void	$ 12,000,000	$ 12,000,000
2028	-	-	$ -
Total	$ 100,000,000

So without future manipulation, the team would eat $24M in the 2026 season when the contract voids.

 

[Hankmoody]

Speaking of the Saints, Marshawn Lattimore has had a wild ride with his cap number:

Mar 19 2020New Orleans (NO) exercised a $10.244 million 5th year option for 2021​

​

Jun 8 2021Converted $9.254 million of 2021 salary into bonus clearing $7.4M of cap space for 2021​

​

Sep 12 2021Signed a 5 year $97.6 million contract extension with no 2021 cap impact (extension only)​

​

Mar 12 2022Converted $8M of 2022 base salary & a $15M roster bonus into signing bonus, clearing $18.45M of cap space for 2022​

​

Mar 13 2023Converted $13.42M of 2023 salary into signing bonus, adding 1 void year, clearing $10.7M of cap for 2023​

​

Jan 3 2024Converted $13.79M of 2024 salary into option bonus, clearing $11.032M of cap for 2024​

Let's look at how these started to add up. Please note, there is some rounding inaccuracy here. I'm attempting to reverse engineer this from today's snapshot and comments.

First off, his starting position going into 2021 with just the 5th year contract:

​

Year	Base Salary	Signing	Roster	Option	Total restructure	Cap Hit
2021	$ 10,244,000		-	-		$ 10,244,000
2022						$ -
2023						$ -
Total						$ 10,244,000

Very simple, they go into 2021 with him at a nice bargain given how elite a CB he is.​

Jun 8 2021Converted $9.254 million of 2021 salary into bonus clearing $7.4M of cap space for 2021.

Divide $9.254 by 4 and spread that out over 5 years = $1.8508M each. It's still the same $10.244M, just with much of it pushed forward. 2021 is now only $2.84M, and that's where the $7.4M comes from:​

​

Year	Base Salary	Signing	Roster	Option	Total restructure	Cap Hit
2021	$ 990,000		-	-	$1,850,800	$ 2,840,800
2022					$1,850,800	$ 1,850,800
2023					$1,850,800	$ 1,850,800
2024					$1,850,800	$ 1,850,800
2025					$1,850,800	$ 1,850,800
Total						$ 10,244,000

Not sure why they did this in June, likely to get them legal to be able to do the next item below which was just 3 months later (since it will add $1.5M from the signing bonus). Might have been to sign a veteran, or address Brees though.​

Sep 12 2021Signed a 5 year $97.6 million contract extension.

This came with a $7.5M signing bonus, so that's spread out over 5 years for $1.5M per year:​

​

Year	Base Salary	Signing	Roster	Option	Total restructure	Cap Hit
2021	$ 990,000	$ 1,500,000	-	-	$1,850,800	$ 4,340,800
2022	$ 9,035,000	$ 1,500,000	-	$ 15,000,000	$1,850,800	$ 27,385,800
2023	$ 14,500,000	$ 1,500,000	-	-	$1,850,800	$ 17,850,800
2024	$ 15,000,000	$ 1,500,000	-		$1,850,800	$ 18,350,800
2025	$ 16,000,000	$ 1,500,000	$ 2,000,000		$1,850,800	$ 21,350,800
2026	$ 16,500,000	-	$ 2,000,000		$0	$ 18,500,000
Total						$ 107,779,000

So far nothing drastic. Standard big-dollar contract for a premium CB.​

Mar 12 2022Converted $8M of 2022 base salary & a $15M roster bonus into signing bonus, clearing $18.45M of cap space for 2022

​

This was spread over only 5 years so $8M + $15M = $23M / 5 years = $4.6M per year. I added a couple of columns to see how the "Total Restructure" was derived. This is a nice visual representation of the cascading bonuses and how it quickly adds up. Nearly $8M per year extra between the original signing bonus and the two restructures.​

​

Year	Base Salary	Signing	Roster	Option	Total restructure	Cap Hit	2021	2022
2021	$ 990,000	$ 1,500,000	-	-	$1,850,800	$ 4,340,800	$1,850,800
2022	$ 1,035,000	$ 1,500,000	-	-	$6,450,800	$ 8,985,800	$1,850,800	$4,600,000
2023	$ 14,500,000	$ 1,500,000	-	-	$6,450,800	$ 22,450,800	$1,850,800	$4,600,000
2024	$ 15,000,000	$ 1,500,000	-		$6,450,800	$ 22,950,800	$1,850,800	$4,600,000
2025	$ 16,000,000	$ 1,500,000	$ 2,000,000		$6,450,800	$ 25,950,800	$1,850,800	$4,600,000
2026	$ 16,500,000	-	$ 2,000,000		$4,600,000	$ 23,100,000		$4,600,000
Total						$ 107,779,000

Mar 13 2023Converted $13.42M of 2023 salary into signing bonus, adding 1 void year, clearing $10.7M of cap for 2023

Now they are adding void years. There were only 4 years remaining on the contract at that point so spreading $13.42M over 4 years would mean $3.55M per year. By adding a "void year" it lets them spread that $13.42M over 5 years at $2.684M per year instead. This is the beginning of the desperation, saving less than $1M on each years' caps from 2023-2026 but then eating $2.6M of "ghost money" on the 2027 cap. This is the GM saying "this will be future GM's problem, not mine".

​

Year	Base Salary	Signing	Roster	Option	Total restructure	Cap Hit	2021	2022	2023
2021	$ 990,000	$ 1,500,000	-	-	$1,850,800	$ 4,340,800	$1,850,800
2022	$ 1,035,000	$ 1,500,000	-	-	$6,450,800	$ 8,985,800	$1,850,800	$4,600,000
2023	$ 1,080,000	$ 1,500,000	-	-	$9,134,800	$ 11,714,800	$1,850,800	$4,600,000	$2,684,000
2024	$ 15,000,000	$ 1,500,000	-		$9,134,800	$ 25,634,800	$1,850,800	$4,600,000	$2,684,000
2025	$ 16,000,000	$ 1,500,000	$ 2,000,000		$9,134,800	$ 28,634,800	$1,850,800	$4,600,000	$2,684,000
2026	$ 16,500,000	-	$ 2,000,000		$7,284,000	$ 25,784,000		$4,600,000	$2,684,000
2027	-	-	-		$2,684,000	$ 2,684,000			$2,684,000
Total						$ 107,779,000

Continued below, I actually hit the 10 character limit for a post

 

[Hankmoody]

​

Jan 3 2024Converted $13.79M of 2024 salary into option bonus, clearing $11.032M of cap for 2024

​

In for a penny, in for a pound. Another void year, more money dumped on the future. Note that this was written as an Option Bonus, but they haven't yet paid that bonus out:​

• 2024 $13.79M option bonus must be exercised 1 week before the regular season

This doesn't change much for the chart below, but it carries a HUGE significance - since it's not yet paid, it's not Dead Money for the Saints should they trade him as long as they haven't yet exercised the option. The NEW team would take this cap hit.​

​

Year	Base Salary	Signing	Roster	Option	Total restructure	Cap Hit	2021	2022	2023
2021	$ 990,000	$ 1,500,000	-	-	$1,850,800	$ 4,340,800	$1,850,800
2022	$ 1,035,000	$ 1,500,000	-	-	$6,450,800	$ 8,985,800	$1,850,800	$4,600,000
2023	$ 1,080,000	$ 1,500,000	-	-	$9,134,800	$ 11,714,800	$1,850,800	$4,600,000	$2,684,000
2024	$ 1,210,000	$ 1,500,000	-	$ 2,758,000	$9,134,800	$ 14,602,800	$1,850,800	$4,600,000	$2,684,000
2025	$ 16,000,000	$ 1,500,000	$ 2,000,000	$ 2,758,000	$9,134,800	$ 31,392,800	$1,850,800	$4,600,000	$2,684,000
2026	$ 16,500,000	-	$ 2,000,000	$ 2,758,000	$7,284,000	$ 28,542,000		$4,600,000	$2,684,000
2027	-	-	-	$ 2,758,000	$2,684,000	$ 5,442,000			$2,684,000
2028	-	-	-	$ 2,758,000	$0	$ 2,758,000
Total						$ 107,779,000

​

I haven't been tracking Dead Money on these charts in order to keep the eye on the prize but I will add it now. Recall the above post about Dead Money. Since the Option Bonus hasn't yet been paid, it wouldn't be Dead Money to the Saints if they cut or trade him. They would only account for any remaining Signing/Restructure money. So today that would be $31.2M (yellow).​

​

Recall the part about Post June 1st though - if they trade him after June 1st they only eat the 2024 Dead Money now ($1.5M + $9.1M) and the rest on 2025. Remember don't @ me I know there are rounding errors here and the actual 2024 hit would be $10,648,400 but I don't want to do forensic accounting to determine where I missed the difference!​

​

Year	Base Salary	Signing	Roster	Option	Total restructure	Cap Hit	Dead​	2021	2022	2023
2021	$ 990,000	$ 1,500,000	-	-	$1,850,800	$ 4,340,800		$1,850,800
2022	$ 1,035,000	$ 1,500,000	-	-	$6,450,800	$ 8,985,800		$1,850,800	$4,600,000
2023	$ 1,080,000	$ 1,500,000	-	-	$9,134,800	$ 11,714,800		$1,850,800	$4,600,000	$2,684,000
2024	$ 1,210,000	$ 1,500,000	-	$ 2,758,000	$9,134,800	$ 14,602,800	$ 31,237,600​	$1,850,800	$4,600,000	$2,684,000
2025	$ 16,000,000	$ 1,500,000	$ 2,000,000	$ 2,758,000	$9,134,800	$ 31,392,800	$ 20,602,800​	$1,850,800	$4,600,000	$2,684,000
2026	$ 16,500,000	-	$ 2,000,000	$ 2,758,000	$7,284,000	$ 28,542,000			$4,600,000	$2,684,000
2027	-	-	-	$ 2,758,000	$2,684,000	$ 5,442,000				$2,684,000
2028	-	-	-	$ 2,758,000	$0	$ 2,758,000
Total						$ 107,779,000

So here we are. Lattimore's 2025 number went from its original $21.3M to $31.392M just by playing the restructure game. They didn't make it any "easier" to trade him because that $13.79M still has to be paid, but they did buy themselves some cap space in the event they are not able to.

 

[Hankmoody]

Reserved

 

[Ministry of Pain]

$255.4M per club from what I was reading, some might have some extra wiggle there.

Miami is still about $30M over the cap right now. Don't think they are going to be major players in free agency
Be lucky to keep a couple of the better ones about ready to walk out the door.
Wilkins on Defense/DL and Robert Hunt on the OL are essential to them having a successful 2024

 

[eighsse2]

Great work, thanks a lot for this!

Any unused cap space from the prior season can be "rolled over" into the current league year. The Las Vegas Raiders, for example, had $11,518,249 unused cap space, so they start 2024 season with $266,918,249 in cap space.

I'm already learning things in "101". Had no idea that it worked this way. I imagine there is some sort of "must attempt to be competitive rule" that prevents a team from saying, "Yeahhhh, screw 2024-2028. We'll spend maybe $50M a year, have no chance, that's fine. Then 2029 we can have a $2B payroll and buy everyone."

Or actually, does it even roll over multiple years like that? If you, hypothetically, spent only $1M in 2024 and $1M in 2025, are you carrying over $500M+ extra cap into 2026? Or is it just the $250+ 2025 cap that rolls into 2026, and the leftover from 2024 evaporates?

 

[dblock05]

There’s a minimum each team has to spend per year. Salary floor.

 

[Bri]

Great work

Why don't the Saints follow the same rules as everyone else?

 

[Bri]

There’s a minimum each team has to spend per year. Salary floor.

I don't believe there is a hard number anymore.
When the Titans were cheap; at the end of the league year, the 20(?) lowest paid players received significant bonuses. As I recall it was for their underspending.
I don't think going in, that teams must spend X amount

 

[nightmare]

One thing people forget- If the team cuts a player from the top 51 they don't get
the entire salary as a cap relief.

The 52nd player now counts against the cap. The new minimum salary is now
800K ish.

 

[zamboni]

Great work

Why don't the Saints follow the same rules as everyone else?

I was also going to mention the Saints, as they always seem to be hovering over the cap. I think they just have some good bean counters that can move money around and still sign the players they want.

But yes, great stuff here - much appreciated.

 

[Hankmoody]

Or actually, does it even roll over multiple years like that? If you, hypothetically, spent only $1M in 2024 and $1M in 2025, are you carrying over $500M+ extra cap into 2026? Or is it just the $250+ 2025 cap that rolls into 2026, and the leftover from 2024 evaporates?

Well it would work that way yes, but as mentioned there's a minimum spending rule that comes into play eventually. I don't recall what the floor is but let's call it roughly $150M. If a team spent $150M in 2023 against a $225M cap then they would roll $75M into 2024. They get $255M for 2024 plus the $75M rollover so now have $330M. If they only spend $150M in 2024 they would roll $180M into 2025.

I haven't paid attention to the floor in many years so I doubt it's that low but that's how it would work should a team be that cheap. No one's even close to that however:

NFL 2023 Salary Cap Tracker

A real-time look at the 2023 salary cap totals for each NFL team, including estimated cap space.

www.spotrac.com

SFO interestingly leads the way with $37M availble from 2023 to roll over into 2024. CLE at $30M, then teams at $12M and less.

 

[Hankmoody]

Great work

Why don't the Saints follow the same rules as everyone else?

They do. They just operate differently, and frankly I think it's brilliant. There's no restriction on restructuring contracts, and there's no penalty for being over the projected cap in future years. Why not borrow against that? Especially when you know the cap is going to go up? They just moved $23M of Carr's money forward. That saved them $23M this year at the expense of what, $6M a year for the next 4 years? The cap will go up more than $20M every single year (it went up $30M this year) so why not? I'm actually shocked more teams don't do it, it's free cap space.

This is kind of like refinancing your mortgage but instead of closing costs it's free. And instead of paying any interest on the borrowed money, it's interest free. And instead of requiring your home to have equity, it can be totally upside down. You can still borrow against it and get the money now and you're virtually guaranteed that your house will increase in value 10-15% every year (so yay you'll be able to keep borrowing against that future growth).

 

[Hankmoody]

Or actually, does it even roll over multiple years like that? If you, hypothetically, spent only $1M in 2024 and $1M in 2025, are you carrying over $500M+ extra cap into 2026? Or is it just the $250+ 2025 cap that rolls into 2026, and the leftover from 2024 evaporates?

I don't believe there is a hard number anymore.
When the Titans were cheap; at the end of the league year, the 20(?) lowest paid players received significant bonuses. As I recall it was for their underspending.
I don't think going in, that teams must spend X amount

Ok found the info. There's a hard number, kind of. The floor is 89% of the cap, but it's not per individual year, it's on a 4 year sliding window. Complex math, but the simple version is "If the last 4 years' caps are $900M total, teams must spend $801M of that". If a team didn't hit that threshold they would write a check for the balance to get up to the floor and that money would go into a general fund that "all players have access to" however that's allocated. So if the Raiders only spent $700M over that 4 year window they would still have to write a $101M check at the end to get to the floor.

Interesting to note that this floor is different than cap space. Recall above where a team can give a $50M signing bonus but it only counts $10M per year for 5 years against the salary cap. The spending floor is CASH, not cap, so that $50M signing bonus would all go to the current 4 year rolling window. Remember the NFL Players' Union only has one goal - to get the most money in the pockets of the players as a collective aggregate. They care less about one guy making $50M than they do about 51 guys making $1M each. So this minimum rule doesn't care how the money is accounted, only that it's paid out. Because of this difference in how it's accounted for the spending floor plays very little into salary cap management and impact.

Bottom line a team has to write the minimum checks, and you can bet they will make sure it goes to players that benefit them and not into some general fund. In @eighsse2 example they could be cheapos for a couple of years but they better spend it soon or they'll pay it anyway and lose the benefit of getting good players out of it.

 

[LawFitz]

^^^ Above re: Saints is partially true, but there is a day of reckoning coming to them and any others at the extreme of can-kicking cap mgmt.

Fortunately/unfortunately for them, a recently new technique to kick cans even a bit further known as Void Years has now become prevalent. I'll let you describe that tactic. Fine and good if you can win a Lombo, but otherwise, looking at two+ years of a gutted roster once the road ends - unless your name is Sean McVay and you have Walmo money behind you to find four first-round players in one year of middle round picks.

 

[Ministry of Pain]

2025-$273.3M is the projected cap, they really did follow thru on a big jump in '24,
That number was originally going to be around $280-$285M so that's come down a little bit.

-Teams can take a player and extend him with very little cap impact in the 1st year of the contract
This is why i am optimistic Miami can retain Hunt and Wilkins even while they extend Tua and bring down his cap hit of close to $25M on 5th year option.
Of course that cap number will balloon to like $40M-$50M by 2025 but it would give Miami a shot in the arm to go out and sign the missing pieces.

 

[Ministry of Pain]

Signing bonuses last off season on big QB extensions

Herbert $16M
Hurts $23M
Burrow $40M
L.Jackson $72.5M

All of them get relatively the same over the contracts but Lamar got a huge chunk up front

DeShaun Watson has a $63M cap hit this year to the Browns
Dak Prescott almost $60M, that will get reworked
Mahomes $58M but look at the returns you get on that money
Daniel Jones $47M, oh my

 

[Bri]

Or actually, does it even roll over multiple years like that? If you, hypothetically, spent only $1M in 2024 and $1M in 2025, are you carrying over $500M+ extra cap into 2026? Or is it just the $250+ 2025 cap that rolls into 2026, and the leftover from 2024 evaporates?

I don't believe there is a hard number anymore.
When the Titans were cheap; at the end of the league year, the 20(?) lowest paid players received significant bonuses. As I recall it was for their underspending.
I don't think going in, that teams must spend X amount

Ok found the info. There's a hard number, kind of. The floor is 89% of the cap, but it's not per individual year, it's on a 4 year sliding window. Complex math, but the simple version is "If the last 4 years' caps are $900M total, teams must spend $801M of that". If a team didn't hit that threshold they would write a check for the balance to get up to the floor and that money would go into a general fund that "all players have access to" however that's allocated. So if the Raiders only spent $700M over that 4 year window they would still have to write a $101M check at the end to get to the floor.

Interesting to note that this floor is different than cap space. Recall above where a team can give a $50M signing bonus but it only counts $10M per year for 5 years against the salary cap. The spending floor is CASH, not cap, so that $50M signing bonus would all go to the current 4 year rolling window. Remember the NFL Players' Union only has one goal - to get the most money in the pockets of the players as a collective aggregate. They care less about one guy making $50M than they do about 51 guys making $1M each. So this minimum rule doesn't care how the money is accounted, only that it's paid out. Because of this difference in how it's accounted for the spending floor plays very little into salary cap management and impact.

Bottom line a team has to write the minimum checks, and you can bet they will make sure it goes to players that benefit them and not into some general fund. In @eighsse2 example they could be cheapos for a couple of years but they better spend it soon or they'll pay it anyway and lose the benefit of getting good players out of it.

Great response.
I wasn't aware of the four year thing. I can find two years that were quite low but not four so it must have been as you outlined that collectively they just didn't spend enough.

I didn't like it and many didn't too as we felt 20 mil spent on a few players would have won more games.

In hindsight, it was wise. It was about like now for them. A rebuild with a mostly young team and more youth coming in the draft. If ya make 5000 quotes about building for the future then don't sign some older player that'll be good for two years like many GMs do- just skip that.

The Browns did the same. Baker in his second or third year had a pretty well stacked young team. Titans had AJB Davis Jonnu Henry etc etc.

The ownership seemed cheap but sincerely it was wise.

Arthur's first or second year in Atlanta was a record for low spending on actual players on the roster. I remember those articles. It was that they had so much dead $ still owed to Ryan and Julio etc that they had to clear the books to "get while" the next year. Then they did, and spent around 90 mil in free agency and I think they're a quietly stacked team that could surprise in 2024.

 

[Hankmoody]

Great response.
I wasn't aware of the four year thing. I can find two years that were quite low but not four so it must have been as you outlined that collectively they just didn't spend enough.

It's actually a fluctuating window. I swear accounting geeks just are not capable of doing simple things. Covered in Article 12 section 9 of the CBA:

https://nflpaweb.blob.core.windows.net/website/PDFs/CBA/March-15-2020-NFL-NFLPA-Collective-Bargaining-Agreement-Final-Executed-Copy.pdf

Section 9. Minimum Team Cash Spending:
(a) For the four-League Year period covering the 2017–2020 League Years,
there shall be a guaranteed Minimum Team Cash Spending of 89% of the Salary Caps for
such period.

(b) For each of the following multi-League-Year periods 2021–2023 (three
League Years), 2024–2026 (three League Years), and 2027–2030 (four League Years), there
shall be a guaranteed Minimum Team Cash Spending of 90% of the Salary Caps for such
periods.

 

[Hankmoody]

2025-$273.3M is the projected cap, they really did follow thru on a big jump in '24,
That number was originally going to be around $280-$285M so that's come down a little bit.

It's $255.4M

NFL salary cap set at $255.4M per team for 2024 regular season

 

[menobrown]

The Saints approach is really quite simple which is primarily just converting salary to bonus and spreading out the cap hit on the assumption the cap will keep going up. The NFL allowing voidable years was a huge boon to this process as Lawfitz pointed out.

But I get riled up at the suggestion the cap does not matter and it's not a factor in teams keeping players and there are a lot of pitfalls to operating like the Saints. Most notably they got a big bill due, their roster flexibility is extremely compromised as they can't move these player who they have pushed so much money out without an acceleration increasing the cap and they would struggle to use mechanisms like a franchise tag that comes with heavy one year hits. If guys like Pittman or HIggins played for them they'd have to extend them or likely let them walk.

 

[STEADYMOBBIN 22]

Seems like a good time to bring up my 20 year old wish for a hometown town cap discount when players are resigned/extended by the team that drafted them.

Good for the players and the fans but prolly bad for NFL parity.

 

[Ministry of Pain]

2025-$273.3M is the projected cap, they really did follow thru on a big jump in '24,
That number was originally going to be around $280-$285M so that's come down a little bit.

It's $255.4M

NFL salary cap set at $255.4M per team for 2024 regular season

I meant $255M in 2024 and then it rises to $273M in 2025, that was projected to be about $285M last off season

 

[Desert_Power]

Great thread!

 

[Hankmoody]

With the combine now done and Free Agency next on the calendar I have added a very complex real-life example - Marshon Lattimore from the Saints.

 

[Anarchy99]

It's great that teams can get creative and have some creative accounting to move cap dollars around, but teams can end up in a bad spot the other direction as well (too much cap space). The Patriots have $101M in cap space for 2024, $204M in 2025, and $263M in 2026 (the most of any team in each of those seasons). The problem is, they don't have many players under contract past this year, they don't have many players they would want under contract, there aren't a ton of impactful free agents on the market (and those guys are going to get paid a ton with the cap going up). Most top free agents want to go somewhere with a chance to win. The Patriots have all this money to spend and really don't have a ton of available options to spend it on.

 

[miqws]

A way to augment the salary cap via insurance.

“Why insuring star players has become a source of NFL tension“

 

[Runkle]

A way to augment the salary cap via insurance.

“Why insuring star players has become a source of NFL tension“

Found this article very interesting.

Plus, insurance premium payments don't count against the salary cap.

"That's the crux of the loophole," the former club executive said. "You effectively can use cash to create cap space from scratch. In a closed system, that is one of the few ways to buy cap space."

It's a benefit that is discussed in hushed tones within the front offices that utilize it, and rarely with outsiders, including the media. The CBA provision has existed since 2006, and since then, the clubs that have taken advantage of this cap hack flew mostly under the radar.