TalkingApes

Howstuffworks “How does the NFL’s salary cap work?”

Ever wonder how the salary cap in the NFL Works? Me too. This article explains a great deal of what perplexes us about the cap. For example:

The advantage of signing bonuses for the owner is that he now has more money to spend under the cap. This is how the Washington Redskins ran up a total payroll of $92.41-million in the 2000 season when the cap was $67-million. The advantage for the player is that all signing-bonus money is guaranteed to be paid, whereas an NFL contract is not guaranteed.

… if the player is released, traded or waived, all of the bonus money that was being prorated throughout the length of the contract is accelerated to the present year.

I found another article that answered even more questions: http://www.askthecommish.com/salarycap/faq.asp

Do unsigned free agents have any impact on the Salary Cap?

Answer: For Restricted Free Agents (RFA), a Qualifying Offer is included in the team salary. This amount remains in team salary until the player is signed, the Qualifying Offer is withdrawn, or a “June 1st tender” is made. If the player is unsigned and the Team makes a June 1 or June 15 offer, this offer will be included in team salary until the player is signed, the team gives up their rights to the player, or until the Tuesday after the tenth week of the regular season if the player is unsigned.

A little explanation on how signing bonuses count against the cap:

…if a player signs a four-year deal with a $1 million signing bonus, $250,000 of that bonus will count toward team salary for each contract year ($1 million divided evenly over the four-year contract is $250,000 per year). If a team releases a player, the unamoratized bonus money (the remaining prorated bonus money) counts immediately against the cap.

But what if a player retires? How does that affect the cap?

In most cases, if a player retires, the remaining signing bonus that has not been included in salary “accelerates” and is included in that year’s team salary. Thus, the team will take an immediate salary cap hit of the remaining signing bonus.