May 28, 2024

Over the last few weeks, I’ve been doing some extensive research on the NFL salary cap and the collective bargaining agreement (CBA).

As I’ve been doing that, I’ve been asked a bunch of questions. Here’s 12 of the questions I’ve been asked.

 

1) How is the NFL Salary Cap Calculated?

The formula used to calculate the NFL salary cap was negotiated as part of the CBA in 2011. The formula is somewhat complicated. But it’s not rocket science. Each NFL team’s salary cap is 1/32 of 48.5% of the total NFL shared revenue in the previous season.

The first thing to know is that there’s basically two types (categories) of revenue in the NFL. Some revenue is in the non-shared bucket and the rest of the revenue is in the shared bucket. Some of the monies that NFL teams generate go into the non-shared category and the rest of the monies go into the shared bucket.

In any given year, the NFL takes 48.5% of all the monies in that shared revenue bucket to come up with total sum that is to be paid to players. (According to the CBA, players are entitled to 0% of the non-shared revenue, but they are entitled to up to 48.5% of the shared revenue bucket). Then the NFL takes 1/32 of that total shared sum, and then that number becomes the salary cap limit for each team.

For example, in 2022 the total shared revenue bucket was apx. $14.8 billion. The CBA says that the players are entitled to 48.5% of that number, which calculates to be apx. $7.2 billion; this number is expressed as being the total limit that the 32 NFL teams can collectively spend on player salaries during the 2023 season. So we then take that $7.2 billion number and we divide it by 32, which gives us the per team salary cap for the 2023 season, which calculates to be $224.8 million.

 

2) How Much Does the Average NFL Player Make?

The average (mean) NFL salary for the 2023 season is projected to be $3,264,350.

The median NFL salary is $1,092,500 per year.

The reason for the great discrepancy between the mean and median is because NFL rosters are very top heavy.

Most teams typically only have 2 to 5 players making mega bucks ($15 million or more per year). Also, most teams typically have 5 to 8 players in the second tier (apx. $10 to $15 million per year) and usually another 8 to 12 players in the third tier ($5 to $10 million).

Each team typically has 30 to 40 players on the roster earning a sum that is near or below that median number of $1,092,500. [Data courtesy Spotrac.com.]

 

3) What is the NFL Minimum Wage?

The minimum salary in the NFL is based on years of service.

For 2023, the minimum salary for players with less than four years of service is $750,000 per year. For players with at least four years of service the minimum salary is $1,080,000 per year. For players with at least seven years of service in the NFL, the minimum salary is $1,165,000 per year.

The CBA has precise numbers for how much the minimums will rise over the next few years, through 2030. You can see the entire chart here.

 

4) Do Player Health Benefits Count Against the Cap?

Yes. NFL teams are required to pay toward their players’ health and medical benefits as well as their pensions. All of those monies count toward the salary cap too.

 

5) Do NFL Coach’s Salaries Go Against the Cap?

No, coaches’ salaries do not count against the salary cap. NFL teams can spend whatever amount of money they want to on coaches and coaching staffs. Coaching salaries are not limited or regulated in any fashion, other than, of course, being regulated by basic American contract law. However, there are few norms used in contract language that all teams generally used.

 

6) Are NFL Coaching Contracts Guaranteed?

NFL head coaching contracts are typically fully guaranteed, so if a team fires a coach part-way through the contract, they’re typically still on the hook for the entirety of that contract.

Teams have occasionally tried to get out of paying a fire coach based on some clauses, but not usually successful. The most recent example of this was when the Jaguars fired Urban Meyer during the 2021 season. The Jaguars’ owner Shad Khan asserted that they fired Meyer because he violated clauses in the contract, which supposedly gave them the right to withhold paying out the rest of the deal. Meyer and his legal team obviously disagree. As of the writing of this article, the Khan-Meyer dispute has not been resolved, but they’re likely to reach a legal settlement sometime soon.

Assistant coaches and coordinators typically sign fully guaranteed deals that are two years long. This gives the teams and the assistants easy “outs” if either party wants to exit the relationship.

Most NFL contracts also include “offset” language. Meaning if they fire a coach and that coach gets hired by another team, the new salary from their new team offsets what the previous team owes them. So, if a team fired their head coach and were still on the hook for $5 million per year, but another team offered that guy $1 million per year to be their offensive coordinator, then the old team would only be on the hook for $4.5 million per year. The offset language, however, does not apply if the coach takes a job in the college ranks.

 

7) How Much Do Players Get For Winning the Super Bowl?

Each player on the Super Bowl winning team gets a cash bonus from the NFL. In February 2023, the bonus for the Chiefs players for winning Super Bowl LVII was $157,000. The winners of Super Bowl LVIII will receive a bonus of $164,000.

 

8) What is the Biggest “Dead Money” Cap Hit in NFL History?

The term “dead money” refers to any salary cap hit that is charged to a team’s salary cap for money that they previously paid to a player (in previous seasons) that was not ever yet accounted for against the salary cap in previous years.

Whenever a team cuts or trades a player, any funds they previously paid him that has not yet been accounted for automatically accelerates in the season in which the player was released or traded. [Learn more about how bonuses and acceleration works.]

The biggest single “dead money” cap hit in NFL history is $40.3 million which was charged to the Atlanta Falcons in 2022 when they traded Matt Ryan to the Indianapolis Colts. Ryan had signed a five-year, $150 million contract with the Falcons in 2018. At the time of the trade in 2022, there was $40.3 million in guaranteed monies that they had not ever accounted for against the salary cap, so the entire amount was charged to them in 2022.

Before the Matt Ryan trade, the single biggest “dead money” cap hit was one year earlier when the Philadelphia Eagles traded Carson Wentz and got hit with a “dead money” cap charge of $33.8 million. Interesting to note, that trade was also with the Colts.

Speaking of the Eagles, they are projected to lead the NFL in 2023 with nearly $55 million in “dead money” against the salary cap.

 

9) How Much Do NFL Cheerleaders Make?

The pay rate for NFL cheerleaders varies dramatically from team to team, however most teams pay their cheerleaders around $22,500 per year.

The highest paid cheerleaders are the Dallas Cowboys cheerleaders and the Carolina Panthers cheerleaders. Both teams pay their cheerleaders apx. $75,000 per year. Salary for cheerleaders does not count against the NFL salary cap.

 

10) How Much Do NFL Waterboys Make?

The pay rate for NFL waterboys varies somewhat from team to team, however most teams pay their waterboys around $53,000. Monies paid to waterboys do not count against the NFL salary cap.

 

11) How Much Do NFL Mascots Make?

The pay rate for NFL mascots varies somewhat from team to team, however most teams pay their mascots around $25,000 per season. Monies paid to mascots do not count against the NFL salary cap.

 

12) How Much Do NFL Referees Make?

The NFL has not disclosed how much they are currently paying their referees. However, the most recent disclosure was in 2019. At that time, NFL referees were making apx. $201,000 per year.