Ever wondered the ins and outs of the NFL salary cap? You’ll discover the NFL salary cap’s evolution, impact, and 2024 projections in the story. Also, catch every game of the 2023 season on Fubo.
Demystifying the NFL Salary Cap: Evolution, Limits, and 2024 Projections
No matter the team in every professional sport, they are bound by finances, especially the NFL, which is one of the highest-grossing industries in the country. With so much revenue in the sport, rules are in place that keep the money in check.
The cap is used as a mechanism of compliance, a way NFL teams account for a contract over the life of the deal. As clubs formulate their rosters, consider free agent signings and trades, and make draft picks, they must always be aware of where their team sits financially. For 2024 the salary cap is $256 million.
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What Is the NFL Salary Cap?
The NFL salary cap has been in place for almost 30 years. Simply put, the NFL salary cap places a limit on how much teams can pay players on their roster in a given season. For the 2023 campaign, that figure is set at $224.8 million.
The collective bargaining agreement between the NFL and the NFL Players Association mandates that owners and players split revenues. Historically, ownership has received a slightly larger share of the pie — players currently earn 48 percent of the profits.
NFL revenue comes from three sources: media revenue, NFL ventures/playoff revenue, and local revenue. The players’ total is then divided by the league’s 32 teams to give each club its individual salary cap.
When was the Salary Cap Introduced in the NFL?
The NFL adopting a salary cap was simultaneously the beginning of NFL free agency. For years, players were tied to their teams via a reserve clause, which limited players’ ability to change clubs. The reserve clause had the same similarities as those in other professional sports, especially MLB.
When the NFL Players Association sued the league in 1989 because it would choose 37 players to retain on their roster, while the rest could become free agents. The NFLPA sued again and the system was discarded in favor of unrestricted free agency, which remains in effect to this day. In exchange, players agreed to a salary cap. Free agency began in 1993, while the salary cap took effect in 1994. The first NFL salary cap was just $34.6 million.
NFL Salary Cap Space Projections by Team
For 2024 the salary cap is $256 million. Every club was required to become cap-compliant by the time the new league year began on March 15.
• Houston Texans | $87.77 million
• New England Patriots | $85.43 million
• Chicago Bears | $78.01 million
• Washington Commanders | $67.65 million
• Tennessee Titans | $64.85 million
• Indianapolis Colts | $62.93 million
• Detroit Lions | $49.21 million
• Arizona Cardinals | $45.80 million
• Cincinnati Bengals | $44.43 million
Right before the 2023 season began Joe Burrow signed a five-year, $275 million extension that will keep him through at least the 2029 season. The deal included a whopping $219 in total guarantees. The NFL’s policy on guaranteed contract value means teams need to put all guaranteed money in escrow at the time the deal is signed to ensure it is truly guaranteed. Given the amount of money spent on Burrow the team will have to make a tough decision on wide receivers Tee Higgnis and Ja’Marr Chase. Higgins is a free agent after the 2023 season. Chase is not extension eligible until after the season.
• New York Giants | $44.36 million
• Carolina Panthers | $35.95 million
• Kansas City Chiefs | $35.66 million
In response to Burrow’s contract, the Kansas City Chiefs and Patrick Mahomes restructured his agreement after Week 2, giving him $210.6 million between 2023 and 2026, the most money in NFL history over a four-season span. His compensation for those years is now guaranteed. Mahomes became the NFL’s highest-paid player in the summer of 2020 when he signed a 10-year extension worth $450 million.
• Minnesota Vikings | $32.45 million
• Las Vegas Raiders | $28.64 million
• Atlanta Falcons | $23.04 million
• Los Angeles Rams $21.85 million
• Jacksonville Jaguars | $5.14 million
• Philadelphia Eagles | $5.10 million
• Seattle Seahawks | $5.01 million
• New York Jets | $346, 000
• Tampa Bay Buccaneers | $216K
• Green Bay Packers | $-2.25 million
• Baltimore Ravens | $-5.56 million
• Pittsburgh Steelers | $-6.66 million
• Dallas Cowboys | $-6.67 million
• San Francisco 49ers | $-31.20 million
• Denver Broncos | $-37.89 million
• Buffalo Bills | $-46.20 million
The Bills currently have just $35,000 in 2023 cap space. Injuries will inevitably pop up during the season and force the club to add new players — and their salaries — to the roster. The Bills have already restructured several veteran contracts this offseason, including Josh Allen, Von Miller and Stefon Diggs. Still, they’ll probably have to consider converting a few more base salaries simply to ensure they have enough cap space for the rest of the year.
• Miami Dolphins | $-51.46 million
• New Orleans Saints | $-80.98 million
• Los Angeles Chargers | $-83.60 million
• Cleveland Browns | $-85.08 million
The Browns spent heavily during free agency, adding high-quality options like Dalvin Tomlinson, Ogbo Okoronkwo and Juan Thornhill to their roster, while taking on Za’Darius Smith and Elijah Moore’s contracts via trade. Cleveland also restructured six veteran contracts to create additional cap space this offseason. The two most significant salary-to-bonus conversions involved Deshaun Watson and Myles Garrett, whose restructures opened up more than $60 million in extra cap room for the team.
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Can a NFL Team Go Over the Salary Cap?
While teams cannot exceed the salary cap, the front offices of each team do what they can to manipulate it. Teams can use various mechanisms to push money into the future and create more space in the present.
Signing bonuses are typically paid to players almost immediately, but their salary cap impact can be drawn out. Signing bonuses are prorated over the life of the contract or five years, whichever comes first. While the player receives the cash immediately, the team doesn’t feel the financial impact all at once.
Also, teams can restructure contracts to open up more cap space. By converting base salaries (the money that a player receives for playing each week during the season) into proratable signing bonuses, clubs can create additional cap space in the short term. However, every dollar spent goes towards the salary cap at some point.
If a team is over the cap in the offseason, teams often have to release or trade players or rework contracts to lower the current season’s cap chargers in order to get under the cap by the beginning of the new league year.
Catch Every NFL Game with Fubo
Want to watch the 2023 season? Then make sure you’re subscribed to Fubo, which gives you access to all nationally televised NFL games (CBS, NBC, FOX, ESPN) as well as regional coverage during the season and the NFL RedZone Channel. CBS will air the 2024 Super Bowl.
Fubo is the leading sports-first live TV streaming platform, offering 100+ live TV channels and regional sports networks. The service includes a DVR as well as on-demand content and focuses on sports programming. Fubo is the only live TV streaming platform with every Nielsen-rated sports channel. Leveraging Fubo’s proprietary data and technology platform optimized for live TV and sports viewership, subscribers can engage with the content they are watching through interactive product features like FanView, an in-video experience showcasing live game, team and player stats and scores in real-time. Fubo was also the first virtual MVPD to enable simultaneous viewing on up to four screens (Multiview on Apple TV) and the first to stream in 4K HDR. The service was ranked #1 in Customer Satisfaction among Live TV Streaming Providers by J.D. Power (2022).
FAQs
What Is the Highest Paid NFL Team?
The Dallas Cowboys remain the most valuable team in the NFL at a record $9 billion, 13 percent more than a year ago. The Cowboys generate the most revenue ($1.1 billion) and operating income ($500 million) by far in the NFL.
Does the NFL Have a Luxury Tax?
If a team goes over the salary cap, they are fined upwards of five million dollars for each violation of the cap. In more severe scenarios, draft picks can be confiscated entirely and player contracts can be voided. Teams over the cap are also banned from signing any new players until they are back below the cap again.
Is NFL Signing Bonus Part of Salary Cap?
A signing bonus is prorated against the salary cap over the length of the contract with a maximum of five years.
