May 28, 2024

Imagine having locks on your doors that don’t actually lock. The locks might be real. They might even look good. Sure. But if the locks on the doors don’t actually lock the doors, then what’s the point of having them?

If you have locks on your doors that do not actually lock the door, then I think it’s fair to say that the the locks are “fake.” Well, that’s exactly how I feel about the NFL salary cap.

If you’re reading this article, you’re probably already well aware of the NFL salary cap. As you know, the NFL salary cap is supposed to be the limit of what NFL teams can spend on their team’s rosters in any given season. For the 2023 season, the NFL salary cap is $224.8million. The cap is supposed to be an equalizer, prohibiting the richest NFL owners from “buying up” all the good players.

However, NFL salary cap is incredibly easy to manipulate. In fact, it’s so easy to manipulate that the cap is pretty much useless at this point. I’ll prove that in this article.

 

What Does the Data Say?

Over the last 15+ years, we’ve seen NFL teams spending way more cash than what the cap supposedly allows.

In the 2023, we’ll have at least one team that will spend nearly $70 million cash above the salary cap limit and we’ll have at least eight teams that will spend more than $25 million above the salary cap.

 

Teams  2023 Spending Pct. Above Cap
Browns $292.5m >30%
Dolphins $268.4m >19.%
Bills $263.2m >17%
Eagles $258.2m >15%
Broncos $258m >14.8%
Falcons $253.6m >12.8%
49ers $249m >10.8%
Jags $248.4m >10.5%

 

In fact, 16 teams (exactly half the league) in 2023 will spend more cash than they are supposedly allowed to spend.

Meanwhile, the Green Bay Packers will likely only spend $183.2 million in cash in 2023. Here’s the bottom five teams spending (as scheduled for the 2023 season).

 

Teams  2023 Spending
Packers $183.2m
Bears $187.9m
Rams $189.8m
Lions $191.4m
Patriots $192.5m

 

So, the Cleveland Browns will likely spend nearly $110 million dollars more cash in 2023 than the Green Bay Packers.

But wait, wasn’t the salary cap supposed to be an equalizer???

[Data Courtesy of Overthecap.com]

 

NFL Teams Doing Voodoo Math

Let’s use the Philadelphia Eagles as an example. In February 2023, the Eagles lost the Super Bowl. Going into the off-season they had several key veterans scheduled to hit free agency. The Eagles only had $6 million in salary cap space. In theory, they should only be able to spend additional $6 million to their payroll.

Many people on Twitter (especially Cowboys and Giants fans) assumed that the Eagles would experience a significant downfall because they’d be in “salary cap hell.” So, what happened?

Well, the Eagles lost C.J. Gardner-Johnson, Miles Sanders, and Javon Hargrave to free agency, but they added Rashaad Penny, Marcus Mariota, D’Andre Swift, and Olamide Zaccheaus as well as re-signing Darius Slay, James Bradberry, Jason Kelce, and Fletcher Cox.

Oh, by the way, the Eagles also handed Jalen Hurts a record-breaking five-year, $255 million contract. And yet, by mid-April, the Eagles had $18 million in cap space left. Huh? What? How did that happen?

How did the Eagles sign a bunch of players and have MORE money left over to spend than when they started? What kind of “voodoo math” is this?

Well, it’s not voodoo. It’s just good cap management. And the Eagles aren’t the only team doing it.

 

The Key: Prorated Bonuses

To understand how much of the cap management works, you need to understand how bonuses are accounted for against the NFL salary cap (you may already know this, but just want to make sure we’re on the same page).

The Collective Bargaining Agreement (CBA), which is negotiated between the NFL and the NFL Player’s Association (NFLPA), dictates the terms of contracts. The CBA stipulates that bonuses are to be amortized (or prorated) over the length of the contract (or over five seasons, whichever is less). This allows a team to hand the player a cash bonus today, but only count as little as 1/5th against this year’s cap.

This is how the Eagles were able to spend money although they only had $6 million in salary cap space. They gave players cash, but found ways to charge those monies to future year’s cap. Teams do this every season.

In reality, teams can always push money into future years. Even with little cap space, they can still acquire or re-sign any player, give him cash today, and just account for the bulk of that cash in the future. Limited cap space does not actually stop teams from acquiring players.

The cap was originally implemented back in 1994 because it was supposed to stop teams from doing exactly what the Eagles (and others) just did this off-season. But as we can see, the cap did not stop them. That’s my point, the cap does not stop teams.

Sure, the teams need to figure out how to work around the cap’s protocols, that’s true. It takes some work on their part. But it’s not a terribly hard task. If they’re willing to spend the cash today, it’s not hard to figure out a way to do it. But the NFL salary cap does not stop teams from acquiring players if the teams are willing to spend the cash today.

 

How Did They Do It? Bonuses and Dummy Years

Teams are not using any sort of voodoo math, it’s just good cap manipulation. By using a variety of “loopholes” built into the CBA, any NFL team can choose to pay a player a certain amount of money today, but then choose to only count a portion of that money against the cap in this year, and they can just elect to charge the rest of the money in future years. One tactic used to do this is “dummy years.”

For example, the Eagles did this with pro-bowl Cornerback James Bradberry. In the summer of 2022, the Eagles were up against the cap. They had very little cap space.

The Eagles wanted to sign Bradberry to a one-year deal worth $8 million, but they did not have $8 million of salary cap space under the limit to account for that contract. The cap is designed to stop them from getting a player like Bradberry. But, in reality, it did not stop them.

Here’s what the Eagles did with Bradberry. They could not sign Bradberry to the one-year deal they wanted, so instead of a one-year deal they elected to sign him to a three-year deal, but the final two years of the contract were scheduled to automatically void at the end of the 2022 season. This is known as “dummy years.”

When Bradberry signed the contract in summer 2022, he was given a $6.8million bonus. That bonus was then amortized over the three years of the contract. So, Bradberry’s bonus would count against the salary cap in 2022, 2023, and 2024 at apx. $2.3 million per year. They also gave Bradberry a base salary for the 2022 season that was just under $1.2 million. His contract looked like this:

 

Base Salary  Bonus Allocation  Cap Hit
2022 $1.199m $2.267m $3.466m
2023 Void $2.267m $2.267m
2024 Void $2.267m $2.267m

 

As you can see, Bradberry’s salary cap charge for the 2022 season ended up being just under $3.5 million ($2.3 million bonus allocation plus the $1.2 million salary).

In total, the Eagles gave Bradberry $8 million cash total in 2022, but less than $3.5 million of that sum actually counted against the 2022 salary cap, leaving $4.5 million unaccounted for.

 

Acceleration and “Dead Money”

One major caveat, that you’re probably aware of, is that all “unaccounted for” monies must eventually be accounted for. Every single dollar paid to players must eventually be accounted for (against the salary cap).

So, for example, the previously mentioned unaccounted for $4.5 million sum in Bradberry’s contract, needed to be accounted for when the 2023 and 2024 years voided-out (after the 2022 season). The unaccounted $4.5 million sum was then charged to the Eagles’ 2023 salary cap. That’s known as “dead money.”

If any NFL contract ends by void, trade, or release, any monies that have previously been paid to the player by the team that have not yet been accounted for against the cap must then be fully accelerated and charged against the cap in that season. So, in Bradberry’s case, since his deal came to an end (by void) in March 2023, the full sum of that unaccounted $4.5 million would then be charged against the Eagles’ salary cap in 2023.

In the end, the Eagles signed Bradberry to a (functional) one-year deal for $8 million for the 2022 season, but they only charged $3.5 million against the 2022 salary cap and then they pushed $4.5 million into the future.

The Eagles also used this same “dummy years” tactic with the contracts that they recently gave to Kelce, Cox, and Slay back in March.

 

The Saints Use Dummy Years Too

The Eagles are not alone in using the “dummy years” tactic. Several teams do this. The Saints just did it with the Derek Carr contract.

In March 2023, the Saints signed Carr to a four-year, $150 million contract. But Carr’s contract is technically a seven-year deal, it goes through 2029, however the last three seasons (2027-2029) void automatically (three “dummy years”), so Carr will become a free agent after the 2026 season. But this allows the Saints to stretch-out the monies over a longer period of time.

Carr received a $28.5 million signing bonus the day he signed the contract. That signing bonus is prorated over five seasons, 2023 to 2027 (the “dummy years” allow them to stretch out the signing bonus over five years instead of four years).

Carr will also receive a roster bonus in March 2025 (if he’s still on the roster) and the Saints will be able to stretch that bonus out over five years too, allowing them to account for those roster bonus monies from 2025 to 2029. Again, the voided years help bring down the cap number in the short-term. Carr’s contract looks like this:

 

Derek Carr’s Official Contract
Signing Bonus (March 2023): $28.5 million
Roster Bonus (March 2025): $10 million
Base Salary  Signing Bonus Allocation  Roster Bonus Allocation  Cap Hit
2023 $1.5m $5.7m $0 $7.2m
2024 $30m $5.7m $0 $35.7m
2025 $30m $5.7m $2m $37.7m
2026 $50m $5.7m $2m $57.7m
2027 Void $5.7m $2m $7.7m
2028 Void $0 $2m $2m
2029 Void $0 $2m $2m

 

The caveat to Derek Carr’s contract is that when he becomes a free agent after the 2026 season, any future anticipated cap hits will accelerate and hit the Saints’ cap in 2027.

As you can see in the table above, the total of the anticipated cap hits after 2026 is $11.7 million ($7.7 million in 2027 + $2 million in 2028 +$2 million in 2029). The Saints will have a $11.7 million “dead money” hit in 2027 and then they’ll actually have $0 cap hits from this contract in 2028 and 2029. So the actual Derek Carr contract will look like this:

 

Derek Carr’s (Actual) Contract
Base Salary  Bonus Allocations  Cap Hit 
2023 $1.5m $5.7m $7.2m
2024 $30m $5.7m $35.7m
2025 $30m $7.7m $37.7m
2026 $50m $7.7m $57.7m
2027 n/a n/a $11.7m (dead money)

 

Some people ask, “But isn’t that dead money hit a big deal?” And the answer is no because by the time they take that hit, the cap would have gone up several times, making it less consequential (I’ll tackle this a bit more later in this article).

Over the last decade the Rams, Saints, Buccaneers, Packers, Browns, Dolphins, Broncos, Seahawks, and Falcons have all utilized this “dummy years” tactic several times, allowing them to push monies into future years, knowing that they’ll eventually need to take on some “dead money.”

These sorts of tactics functionally allow NFL teams to spend money above the salary cap. This is one of the reasons why we’ll have several teams in 2023 spending 10-30% above the actual salary cap limit.

 

But, Aren’t They Just “Kicking the Can Down the Road”

Most teams push money into the future. Different teams do this in different ways. There are various mechanisms built into the salary cap protocols that allow teams to account for monies in future seasons. Not all teams like the “dummy years” tactic. But even if they do not utilize “dummy years,” they can still push monies into the future.

(Note: In the future, I intend to publish articles on this website explaining all of the various types of loopholes teams use to push monies into future salary cap years.)

As I’ve already mentioned herein this article, every dollar given to players must eventually be accounted for. Everything eventually hits the salary cap. But teams can conceivably use these maneuvers every season. And there’s nothing to stop them.

In theory, a team could use the bulk of their cap space this season to account for monies they previously paid in previous seasons, and then the players playing on their rosters in this season are being compensated by dollars that will mostly be accounted for in the future years. An NFL team could conceivably spend above the cap every single year.

Some people have chided those teams saying: “But aren’t they just ‘kicking the can’ down the road?”

Well, yes. That’s exactly what they’re doing. They’re pushing monies into future years. They are definitely kicking the can down the road. But, here’s the thing… they can do that indefinitely, with impunity.

Teams can indeed “kick the can” down the road, and when they get “down the road” in a few seasons, they’ll just “kick the can” again. There’s literally nothing to stop them from doing this over and over again.

There’s nothing compelling NFL teams to eventually bring their cash spending down to be more in-line with the salary cap limits.

 

NFL Salary Cap is Not Like Your Credit Card

One common statement I’ve heard on Twitter from various people is that the NFL salary cap is like a credit card. Teams can spend, but eventually there’s going to come a day where they have to “pay the bill.”

Supposedly, that’s when the NFL team will be in “salary cap hell” and they won’t be able to sign any players, and they’ll need to cut a bunch of the best players to get back under the salary cap.

But here’s the big thing with the NFL cap… and this is what most people don’t seem to understand… in the NFL, when the “bill comes due” (meaning, when the salary cap needs to take the hit), they can just take the hit. But that does not stop them from signing or acquiring players.

People say things like, “But eventually it’ll catch-up to them and they won’t be able to sign players.” But this sentiment just is not true. In reality, they still can acquire players because they can always push the new monies into the future.

Even if a team is in “salary cap hell” because of deals from previous seasons, they can still sign players and acquire new players because the money that they give those new players will not count against this season’s cap.

The teams might be in “salary cap hell” right now, but they can still sign a new player (or re-sign a current player) and charge the money from those new deals toward future years. Even the teams that are in “salary cap hell” can still sign players to big free agent deals, if they are willing to spend the big cash today.

The NFL salary cap is not anything like a credit card. In fact, a credit card is the exact opposite of the NFL salary cap. With a credit card, I use accounting to acquire an item today, and then I use my cash later. The NFL salary cap is literally the exact opposite. In the NFL, teams use cash now to acquire the players and then they account for it later. The salary cap is literally the inverse of a credit card.

 

Teams “Borrow” From Future Years

Functionally, it’s like teams are “borrowing” from future years to pay their teams this season. Technically, teams are not borrowing (in the literal sense), but functionally speaking, that’s exactly what they’re doing. I’ll explain.

The cap doesn’t get enforced until the league year starts. Meaning, the 2023 salary cap didn’t kick in until the league year started in March 2023. This allowed teams to charge sums of one against the 2023 salary cap that were actually more than the official salary cap number.

For example, the Saints spent chunks of monies on players in the 2019, 2020, 2021, and 2022 seasons. A significant percentage of those monies were charged to the 2023 salary cap. During the 2021 and 2022 seasons, the charges that were scheduled to hit the Saints’ 2023 salary cap was more than $280 million (nearly $60 million over the cap).

Functionally, they “borrowed” $280 million from 2023 to pay players 2019-2022, so it appeared they were in a tight salary cap position. But then, in February 2023, the Saints restructured contracts and pushed monies further into the future, charging the monies that they spent in this restructures to 2026 and 2027.

The Saints had “borrowed” that $280 million sum from the 2023 cap in order to pay players 2019-2022, and when 2023 arrived (when the “bill came due”), they just borrowed money from 2026 and 2027 to get under the salary cap limit for the 2023 season.

And what will the Saints do in 2026 and 2027 when they get there and they’re over the cap again? Well, they’ll likely just “borrow” from the future years after that. And it will go on and on and on, over and over again, and there’s nothing to stop the Saints.

At some point the Saints may choose to “reset” in one season. There may come a season when the Saints elect not to push more monies into the future, and just “take the hit.” But that would be their choice; they’re not ever going to be compelled or forced to do that.

Teams can “kick the can” down the road for a long time, and when they get in some cap trouble, they use cash today to acquire the players they need and just account for those monies down the road, in the future. Teams can still spend cash to acquire players, and just charge those monies spent to future years, indefinitely.

 

And The Cap Will Just Keep Going Up, So Being Over Doesn’t Matter

Okay, I alluded to this earlier when discussing the Saints and Derek Carr contract… and this is the biggest kicker to consider… When teams push monies into the future years, they are pushing monies into future years that will have much higher salary cap limits.

The salary cap has gone from $34.6 million in 1994 to $224.8 million in 2023. The NFL is also currently preparing to sign new television contracts in the next two years. Several experts anticipate that by 2027 the NFL salary cap will be above $310 million.

So, paying a player, for example, $30 million in 2023 potentially accounts for 13.3% of the salary cap. But in 2027 paying that player $30 million will account for 9% of the cap. Inflation works in the team’s favor.

So it’s just good economics to push monies into the future and account for them down the road, when it counts for a less percentage of the cap. Any team can give a player cash today, get the benefit of having his services right now, to help the team win now, and then account for that cash in the future, when it hurts the team less.

Using up 9% of my cap space in a few years on one player hurts my team less than if that player takes up 13.3% of my cap space this season. Taking the salary cap hit in future years is much more palatable.

Here’s my bottom line point with all this… the salary cap does not actually stop teams from spending cash and acquiring players. Teams can spend huge amounts of money to acquire players and re-sign their own players to long term deals, and they can simply account for that cash in the future. The cap does not actually stop teams from spending money, which is why I’ll continue to say: the cap is fake!

 

My Main Point

When the NFL salary cap was originally implemented in 1994, its purpose was to limit how much teams could spend to avoid any teams building “super teams” through free agency. The salary cap was supposed to be an equalizer, forcing all the teams to spend approximately the same amount of money on their team’s rosters each year.

The vast majority of NFL fans seem convinced that the salary cap has indeed been an effective equalizer. But when we evaluate what each team has actually spent from year to year, what we quickly realize is that the NFL teams are not actually spending the same amount of monies on their teams rosters. And sometimes we’ve even seen large disparities… like the Browns currently being slated to spend $110 million more than the Packers in 2023.

So, with all this stated… I think the NFL should either change the protocols or just get rid of the salary cap altogether. The entire system, as currently constituted, is dumb. If it’s not going to actually stop teams from spending, then why should they have it at all?

If the NFL salary cap is not actually an equalizer, than what’s the point of having it???

 

Conclusion

The salary cap exist. Yes. It’s literally a real thing. Sure. However, it does not do what it was implemented for. The NFL salary cap is so easy to manipulate that it feels useless. If an item doesn’t work, then why have it at all?

I’ll finish this article the same way I started it, talking about locks on doors. If the locks on your doors are “real” but they don’t actually keep the doors locked, then what’s the point of having them? If you have locks on your doors that don’t actually lock the door, then I think it’s fair to say that those locks are “fake.” Likewise, if you have a league salary cap that does not actually cap a team’s spending, then I think it’s fair to say that the cap is fake.