Now that we are past the Super Bowl fever, NFL teams are preparing in full swing for the NFL Combine, the draft, and free agency. The NFL Combine, which is set to be organized in a few days, will pave the way for the 2024 draft and then free agency, both of which can significantly impact a team’s salary cap. For the uninitiated, the National Football League regulates a new salary cap every year, and this is an important financial metric for the teams to plan their signings for the season. So, let’s discuss everything there is to know about the most important financial metric for each and every NFL team.
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What Is The NFL Salary Cap?
Simply put, the NFL salary cap is a regulation set by the league on the total amount of money a team can spend on its roster in a particular season. The league sets the regulations to instill financial discipline and even the playing grounds for all teams. It prevents allowing teams with humongous financial backing to disrupt the player market.
When Was The Salary Cap First Adopted?
Before 1993, the concept of free agency as we know it today and the salary cap was oblivious in the NFL. Before ‘93, players had limited options to change their clubs as they were tied to their teams with a reserve clause. The reserve clause arbitrarily gave the team the option to re-sign a player on each year of his contract under the same salary terms. This meant that the players didn’t have the option to leave their clubs unless they were traded or retired.
After years of this limitation, the NFL Players Association negotiated with the league and they both agreed to implement the 1993 Collective Bargaining Agreement. This allowed players with expired contracts to sign with the team of their choosing.
However, it came with a cost. In return, the players had to agree to come under a salary cap. The salary cap came into effect in 1994, with the first NFL salary cap being a meager $34.6 million per team.
What Is The Salary Cap Amount Per Team For The 2024 Season?
The 2024 salary cap is set at $255.4 million, an increase of $30.6 million from last year’s $224.8 million. A salary cap is normally announced after the conclusion of a season — late February or early March.
How Is The NFL Salary Cap Calculated?
The Salary Cap is calculated based on the league’s annual revenue. Out of the total revenue, the NFL apportions about 48% of the revenue to player costs. The player costs terminology comprises two components – player benefits and player salaries. The latter forms the big chunk of revenue, and this is called the salary cap.
To make things easier, let’s consider the player cost in 2020. The NFL announced the Player Cost number to be $242.9 million with $198.2 million being allocated to salaries. This means that the salary cap for 2020 was $198.2 million, with the remaining $44.7 million being the Player benefits amount. The player benefits cover insurance, pension, and education, among other benefits for the players. These benefits are above their wages.
Can Teams Carry Over Unused Salary Space To The Next Season?
To answer in short, yes. Teams can carry over their unused salary space to the next season. However, it comes with a catch. For starters, the teams intending to carry over must notify their intentions to the league by 4 p.m. ET, one day after the end of the regular season. This doesn’t mean that teams can be frugal for a long time and then make a big splash in a season.
To tackle this loophole, the NFL has set a regulation that the teams must spend at least 89% of the cap over a four-year period. During this time, it’s also important for the NFL to spend 95% of the cap. If these thresholds aren’t met, then the team will be forced to distribute the difference to the players active on their roster in these four years. This, however, is a rare occurrence.
Can NFL Teams Exceed The Salary Cap?
No, the NFL teams cannot exceed their salary caps no matter what. This is why the preseason plays an important role for the teams as it helps the teams in the negative spectrum to release players, rework contracts, and plan accordingly. But then what about the humongous signing bonuses paid to players? This is where creative accounting comes into play. Over the years, the NFL teams have exploited a loophole in the system.
In the case of signing bonuses, the player gets the bonus paid immediately however, its impact on the salary cap is minimized by the protracting and amortization. The bonuses are prorated throughout the contract or 5 years, whichever is shorter. Similarly, NFL teams today have started restructuring the players’ contracts by adding clauses that convert the base salary per week into proratable signing bonuses. With creative accounting like this, the NFL can prolong the financial impact of the salary cap made by their funds.
What is an Adjusted Salary Cap?
Every team’s salary cap is set the same by the league every season. However, some teams can have an increased salary cap through adjustments. As explained above, the adjusted salary cap occurs when a team decides to carry over the unused salary cap from the previous season to the next season.
Another form of adjustment is the net incentive adjustment commonly known as Dead Money. Dead Money is the difference in the salary cap once a player is released or traded. This can either be negative or positive depending upon the player trade. Based on these two components, the Adjusted Salary Cap is calculated.
Is The Coaching Staff Salary Included In the Salary Cap?
No, the coaches, back-end staff members, and executives do not come under the salary cap. This is the main reason why teams can afford to pay $15 million + contracts to coaches like Sean Payton and Jim Harbaugh, and at the same time, teams like the Raiders can part ways with their headman, although his contract is far from expired.
NFL Salary Cap Space 2024
As we enter the 2024 season, let’s have a look at the spending prowess and salary cap space of each NFL team, as per OvertheCap.
| Team | Cap Space | Effective Cap Space | Active Cap Spending | Dead Money |
| Commanders | $79,614,671 | $67,806,345 | $171,582,086 | $11,933,514 |
| Titans | $78,655,381 | $72,565,839 | $152,102,981 | $31,850,988 |
| Patriots | $78,555,006 | $69,813,592 | $165,159,423 | $11,707,888 |
| Bears | $78,335,157 | $66,248,878 | $170,014,987 | $10,539,071 |
| Colts | $72,337,573 | $68,132,343 | $181,109,345 | $8,363,623 |
| Texans | $67,583,290 | $64,174,292 | $174,969,614 | $13,778,652 |
| Lions | $57,614,821 | $49,803,411 | $177,167,136 | $23,054,507 |
| Cardinals | $53,054,463 | $41,905,110 | $198,221,670 | $14,151,579 |
| Bengals | $51,020,373 | $45,584,242 | $211,931,359 | $1,775,689 |
| Buccaneers | $43,682,067 | $40,566,748 | $192,531,646 | $21,888,078 |
| Rams | $43,110,695 | $39,225,710 | $212,388,824 | $3,902,765 |
| Raiders | $42,936,109 | $38,343,993 | $204,052,911 | $15,002,160 |
| Vikings | $35,807,132 | $30,682,041 | $222,260,496 | $3,508,541 |
| Panthers | $34,572,274 | $32,520,236 | $215,359,328 | $9,230,998 |
| Falcons | $33,004,013 | $27,228,994 | $223,994,196 | $3,023,102 |
| Giants | $30,801,691 | $22,999,424 | $209,557,237 | $17,542,850 |
| Eagles | $27,354,811 | $23,244,756 | $222,789,618 | $7,278,900 |
| Jaguars | $24,683,167 | $20,520,846 | $237,026,468 | $806,259 |
| Chiefs | $18,194,240 | $15,451,427 | $234,875,275 | $3,857,097 |
| Ravens | $16,631,328 | $12,871,589 | $231,810,045 | $9,096,530 |
| Seahawks | $12,969,647 | $7,910,407 | $247,867,087 | $237,492 |
| Jets | $12,756,122 | $8,169,238 | $229,058,404 | $18,331,968 |
| Steelers | $9,005,846 | $5,304,852 | $239,194,713 | $9,539,633 |
| Packers | $2,340,288 | -$2,179,969 | $244,695,581 | $15,118,132 |
| 49ers | -$5,066,251 | -$8,344,657 | $287,715,903 | $9,145,613 |
| Browns | -$7,458,897 | -$8,634,913 | $279,131,620 | $14,972,782 |
| Cowboys | -$9,933,127 | -$12,985,490 | $255,464,019 | $14,771,496 |
| Broncos | -$16,811,078 | -$20,573,431 | $263,994,831 | $9,693,124 |
| Chargers | -$25,607,797 | -$35,160,383 | $263,988,882 | $24,556,666 |
| Dolphins | -$27,919,894 | -$36,468,784 | $267,655,998 | $16,809,238 |
| Saints | -$42,089,497 | -$46,149,348 | $297,076,846 | $2,840,956 |
| Bills | -$43,815,909 | -$47,064,828 | $288,533,131 | $12,221,717 |
As seen in the table, eight teams are on a negative balance. This means they have exceeded the salary cap and will be the most active on the market this preseason. Expect the most contract restructuring and releases from the likes of the Bills, Saints, and Dolphins. Meanwhile, expect the highest number of signings from those at the top.
The Commanders, Titans, Patriots, and Bears got the wooden spoon last season in their respective divisions. With these four having the highest positive salary cap, expect these four to make a lot of money moves this preseason. Exciting times lay ahead!
