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Football 101: The Salary Cap

Cap Room and the Draft

By Mark Lawrence

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Cap Room and the Draft

Each year there is an NFL draft. The NFL considers the number of picks you made and the rounds they were made in, and gives you a rookie salary cap. This rookie cap is typically something like about $3M - $6M. This is a portion of your overall salary cap, it's not extra money. The contracts you sign with your draftees must fit not only in your overall salary cap, but also inside this rookie cap. For this reason your 1st round draft pick is typically the last to sign. You need to sign everyone else first so that you know how much cap space you have available for the 1st round pick. If you've used up most of your rookie cap on the other players, you're going to have to sign a contract with a bunch of roster bonuses and such to make up the money you need and still fit in this year's camp.

A rookie contract may also include incentive clauses. In this case there is no player history to determine if the payment is likely or unlikely to be earned. So, the NFL has a huge table of possible incentives and how they count. In the case of rookies, the incentive clauses may count partially as likely and partially as unlikely. For example, if you draft a running back and include incentives for rushing yards, there is a table which tells you what fraction of the incentive is likely and what fraction is unlikely. Generally an incentive is unlikely to be earned if the rookie was drafted in the 4th or later round. In rounds 1-3 the amounts which are likely to be earned are not very high. Appendix 5 shows rookie incentives and the fraction which is considered likely to be earned.

During training camp a team typically has about 80 players on the roster. Each of these players has been signed to a contract. However, for calculating the cap, only the 53 highest paid players count. If you sign a new guy during camp to a large contract then he will most likely move into the top 53 and #53 will be bumped off the cap calculation. If you cut a guy during camp, it's possible that you will pick up cap space as the dead cap room will appear next year, the expensive guy is gone, and a minimum wage guy replaces him in the calculation.


What's the result of all this? Each year the NFL publishes how much cash each team actually paid out. The Redskins almost always manage to pay out $100M to players while officially remaining under the salary cap. The flip side of this is that it all comes due one day. San Francisco cut several pro-bowl players in one year (Owens, Garcia, etc) and as a result had almost $40M in dead cap space the next year. History shows that when you spend half as much on players as anyone else, you tend to go roughly 1-15 on the season.

Each team gets to determine their own method of dealing with the cap, depending on their own philosophy and resources. For example, Pittsburgh's owner is not nearly as rich as Washington's or Dallas', and he pays out far less in signing bonuses than most other teams. Because of this Pittsburgh tends to lose a couple excellent pro bowl players each year, and almost never has significant dead cap space. The Packer tend to cut a middle path - each year they have a moderate amount of dead cap space due to previously giving out signing bonuses to players who were subsequently cut. Dallas, Washington, and San Francisco have a history of giving out huge signing bonuses and having a large amount of dead cap space.


Table 1: The Salary Cap


Table 2: Minimum Salaries


Table 3: Team Goals, Not Likely to be Earned

Points scored by offensePoints allowed by defenseOwn punt return average
Touchdowns scored by offenseTouchdowns allowed by defenseOwn kickoff return average
Average net yards gained per rushing playTotal defense (net yards)Opposition punt return average
Average net yards gained per passing playAverage net yards given up per rushing playOpposition kickoff return average
Sacks allowedAverage net yards given up per passing play 
Passing % completedSacks 
Total offense (net yards)Interceptions 

Table 4: Other Compensation

  • Base salaries are paid in 17 equal checks, one each game plus one for the bye week. Agents get 3% of each check.

  • Preseason compensation was $775 per week for rookies and $1,100 per week for veterans. Veterans also receive an additional $200 per week for all preseason game weeks.

  • Postseason payments per player (paid by NFL, does not count against salary cap): Wild Card $17,000, Wild Card Division Winner $19,000, Divisional Playoffs $19,000, Conference Championship $37,000, Super Bowl Loser $38,000, Super Bowl Winner $73,000.

  • Practice squad minimum salary is $4,700 per week, including playoff weeks. Prorated over a 17-week season, a practice-squad player makes at least $79,900.

  • Offseason workouts are paid $110 per day, four days a week, during teams' 13- or 14-week offseason workout programs.

  • On travel days during the 2005 preseason, regular season and postseason, a player is reimbursed for meals not provided by his club as follows: breakfast:$17, lunch: $25 and dinner: $43.

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