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Football Salary Cap

Table of Contents

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What is Salary Cap in Football?

The salary cap in football is the total allotted amount of money each team has to spend on players for their team in a season. That total is agreed upon by both the league and its players.

The salary cap is made up of base salary, bonuses, and dead money. All of which are important as well as cap space to understand how the salary cap works.

Base Salary

Base salary is the per year contract that a football player has signed and agreed upon with a team.

Dead Money and Bonuses

Dead money is money that goes to a player no longer on a team. This money still counts when considering the salary cap.

Bonuses also count against the cap and are amounts of money awarded to players to incentivize a signing or their performance on the team.

Cap Space

Cap space refers to the amount of space a team has left before reaching the salary cap. This money may be used on more salaries or bonuses.

To further your understanding of how the four pieces interact, the image below shows how potential dead money (base + bonus) decreases as the player plays out their contract.

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Types of Salary Caps

There are several different types of salary caps used in major sports, hard, soft, and unrestricted caps. The NFL uses a hard cap, but once during the 2010 season had to have an unrestricted salary cap.

Hard Cap

The NFL employs a hard cap meaning that a team's spending cannot exceed the agreed upon salary cap.

Soft Cap

A soft cap allows for leniency and owners to pay a tax to bypass the salary cap, as is used in the Canadian Football league to allow for injury exemptions.

Unrestricted Cap

In 2010 the NFL was forced to have a year without a salary cap due to players opting out of the collective bargaining agreement (CBA). There was no limit to how much teams could spend on their salary that year, however in order to maintain control the NFL told teams not to backload contracts.

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Free Agency

When talking about the salary cap it is impossible not to mention free agency. Teams compete to sign players to contracts, but must keep their per year total under the salary cap.

Contracts

Players sign contracts with teams, and one strategy teams use to keep those totals under the salary cap is to weight certain years of the contract more than others.

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Salary Floor

A salary floor is a way to balance the league's competition and discourage the idea of tanking. It is the opposite of a salary cap and is a minimum dollar value a team must spend on its players per year.

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Increasing Salary Cap

The salary cap has steadily increased from year to year ever since its introduction in 1994. Given its popularity among Americans, football has been able to sign large contracts with TV companies.

TV Money

TV channel companies looking to capitalize on America's interest pay lots of money to be able to broadcast NFL games. That number rises every year, and as a result so does the salary cap.

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