The salary cap in the NFL, as well as almost every other professional sports league, is widely misinformed. All that most fans care about is how much their team is over or under the cap. Managing the salary cap is one of the main focuses of an NFL team’s operations. Just as important is also coaching and player evaluation.
However, as important as those two are, an NFL team is built within the confines of the salary cap allowance. So let’s dive in and answer the question, can teams go over the salary cap in the NFL?
No, NFL teams can not go through a season being over the allotted salary cap number. The NFL has what you would call a “soft cap”. No team can go “over the cap” in terms of cap accounting. However, teams can and do go over the cap in terms of “cash spending”. This is due to the feature “proration” of the NFL cap. Proration is the use of signing bonuses in a player’s contract.
What Is The Salary Cap?
The salary cap is an artificial spending limit on players. This is set by the Collective Bargaining Agreement (CBA). The CBA is the governing body of the NFL and the NFLPA.
The CBA sets the percentages of shared revenue in the NFL. This is divided between the owners and the players according to what has been negotiated. Prior to the two most recent CBAs, the players’ share was roughly 50%.
Recently that percentage has swung toward ownership, with owners getting 53% and the players receiving 47%. This will rise to 48% for ownership once the NFL starts playing 17 game regular seasons. However, the percent for the players will not rise for over a decade.
How Can A Team go Over The Salary Cap?
There are multiple tactics and techniques to allow NFL teams to go over the salary cap. A good term for it is “manipulating the cap”. Managing cap space is probably the most important item on an organization’s list of to-do’s. Without being on top of it for the current season and looking into future projections, teams can become handcuffed.
This happens often when a team buys on a season, loading up for a Super Bowl. If the cap is not managed properly, a teams competitive future can be ruined for years down the road. Let’s take a look at some of the most popular techniques used by teams to manipulate the cap:
Signing Bonus – Teams have found ways to finesse signing bonuses into contracts to wiggle around the salary cap. A signing bonus is guaranteed money in the player’s pocket. This is often intriguing for the player as well. It’s a bonus for the player, but also can help the team out a lot as well.
A good example is a player right out of college who signs a deal worth $22.1 million over 4 years, plus a $14.5 million signing bonus. To minimize the impacting cap hit, the team spreads the bonus number over the life of the contract, which in this case is $3.625 million each year.
There are negatives to this tactic, where it can backfire in certain situations. Because the signing bonus is guaranteed, if the player is released, traded, or waived, all of the bonus money that was being prorated throughout the length of the contract has to be paid when the player leaves.
Back-end contracts – Back-ending a contract is presented by the team and is agreed upon by the player. This is where most of the base salary is in the last two or three years of the contract. In hindsight, this should lessen the impact on the salary cap in the early years.
What this allows the team to do, is before the big money kicks in at the end of a back-ended contract, the team can get around the salary cap by cutting the player. That means the team doesn’t have to pay the player the money for the remaining years of his contract. The team also could negotiate a new contract with the player that’s friendlier to the current salary cap.
Salary Cap Carryover – Salary Cap carryover is the method issued by the NFLPA where teams can carry over their cap space from the previous season. Teams must use roughly 89 percent of the maximum salary cap number, however, they are allowed to carry it over to the following season. For 2021, the Browns lead the NFL in salary cap carryover with a number of $30 million.
A common way that these tactics can backfire is the result of “dead money”. The NFL term “dead money” is when part of the salary cap that an NFL team has is going towards a player that no longer plays for the franchise.
An example of this is a player getting a new contract for two years that also has a two-year signing bonus. If that player is cut after one of those two years, the team still owes the player the remaining money for that last year on the deal.
This impacts NFL teams mightily when Free Agency comes around. The “dead money” could hurt a team that is already low in cap space. That team could potentially miss out on a free agent because of the “dead money” sitting as a cap hit.
Penalties for Going Over The Salary Cap:
The NFL does not mess around with teams willingly and knowingly going over the allotted salary cap. They will hand out massive fines to organizations that go over the maximum allowed number.
The best example is back in 2012, following incidents in the 2010 season which saw the NFL remove $46 million dollars in the salary cap. They took $36 million from the at the time Washington Redskins, and $10 million from the Dallas Cowboys.
The reason for this was the two teams’ “front-loaded” contracts in a year where the salary cap was not put in place. What this would have done is allow both Washington and Dallas to have more available money in upcoming seasons to pay high-impact players and stars.
How Does The Salary Cap Change Each Season?
To explain how the number changes each season, the salary cap is essentially the league revenue split between the teams and the players. To calculate the cap in simplest terms, 47% of NFL revenues are divided by 32 (the number of NFL teams), which sets the team cap number for the season.
In 2020, that number was $198 million. For 2021, due to the economy suffering from a year of playing largely without fans, that number will go down considerably. The estimated number as of right now for the 2021 salary cap, is $180 million.
Obviously, teams hope for a higher salary cap number. The higher the number, the more money a team can spend on talent to fill out their roster and compete for a Super Bowl.
5 NFL teams With The Most Cap Space In 2021?
These are the 5 teams in the NFL with the most remaining cap space for the 2021 season, as well as Dead Cap statistics:
|New York Jets
|Los Angeles Chargers
What Team has The Least Amount Of Cap Space In The NFL 2021?
These are the 5 teams in the NFL with the least remaining cap space for the 2021 season, as well as Dead Cap statistics:
|Tampa Bay Buccaneers
|New York Giants
|Las Vegas Raiders
|Green Bay Packers
I hope you find this article informative regarding the NFL Salary Cap. If you are a numbers person that is all over this side of a professional sports league, you either already knew everything above or loved it. Both are great!
If you want to check out other NFL-related content, click this link and check some stuff out. If you want to read up on another sports topic, just click here. Keep an eye out for more NFL content, and much more, coming soon!