How does the NFL salary cap work? All the details explained

How does the NFL salary cap work? All the details explained

Claudia Kogi
November 17, 2023 at 7:04 AM

Well, in major league sports, money talks, and it indeed screams the loudest in the National Football League. With 2020's estimated annual revenue of $9.5 billion, the NFL is known to be the most lucrative sport globally, surpassing other popular leagues like Major League Baseball, Premier League, NBA, and even NASCAR. But the question is, how does the NFL salary cap work?

What does the NFL salary cap mean?
Russell Wilson(3) looks down field while running away from Leonard Floyd(56) in the second quarter at Highmark Stadium on 13 November 2023 in Buffalo, New York. Photo: Andy Cross (Modified by author)
Source: Getty Images

What is a salary cap? Also known as a wage cap, it is an agreement or a rule that limits the amount of money a particular team can spend on its players' salaries. It exists as a per-player limit, a total limit for the team's roster, or both. This article details more about how the NFL determines its salary cap and much more information.

What does the NFL salary cap mean?

Although it may seem complicated, the NFL salary cap limits how much teams can pay players on their roster in any given season. For instance, for the 2023 campaign, that set figure allegedly $224.8 million.

According to Pro Football Network, the NFL salary cap has increased by roughly five to eight percent per season in recent years. The only season in recent memory where the salary cap drastically decreased was in 2021, when the league lost revenue following the global pandemic, COVID-19.

How does the NFL salary cap work?

Cap management is one of the parts of the sports team's football operation, besides coaching and player evaluation. While the cap itself is somewhat tricky, the set amount often changes yearly based on league revenues. For instance, in 2022, it was $208.2 million, which was way up from the 2021 figure of $182.5 million.

Well, with the 2023 campaign, the figure is set to be $224.8 billion, which is a drastic rise from the 2022 season's set amount. To understand more about how the NFL cap space works, a particular team can sign a player to a $20 million deal, with $19 million being considered a signing bonus. Keep in mind that the figure can be spread out over several years, depending on the agreement.

How does the NFL salary cap work?
The Denver Broncos players celebrate after winning during the game against the Buffalo Bills at Highmark Stadium on 13 November 2023 in Buffalo, New York. Photo: Lauren Leigh Bacho
Source: Getty Images

Another way teams have found a way to finesse signing bonuses within the salary cap is by including signing bonuses, which would be spread over the life of a particular player's contract.

How is the NFL salary cap determined?

It is calculated by dividing the percentage of revenues the CBA determines by 32. Per the current CBA, athletes get 48% of revenue-sharing profits. This means revenue sharing was around $433.755 million heading into the 2022 offseason.

And while that figure generally goes up from year to year, there was a slight graph drop in 2020 heading into 2021 due to COVID.

How does NFL salary cap rollover work?

A rollover cap allows National Football League teams to increase their set cap space by carrying over any unused cap space from the previous year.

How is a player's cap number calculated?

A player's Cap number consists of several parts. For starters, the player has a P5 salary, otherwise called an athlete's yearly base salary. They also receive bonuses of different varieties, which in turn count as part of their Salary Cap number.

When did the NFL salary cap start?

The National Football League was first initiated in 1994 and has since been implemented.

How is the NFL salary cap determined?
Isaac Seumalo(73) of Pittsburgh Steelers steps up to block during a game against the Green Bay Packers at Acrisure Stadium on 12 November 2023 in Pittsburgh, Pennsylvania. Photo: Perry Knotts
Source: Getty Images

Top 10 teams in salary cap space for 2023

According to Roto Baller, the following teams rank in the top 10 of available salary cap space for 2023;

Name of the team

Set amount

Chicago Bears

$94.4 million

Atlanta Falcons

$56.5 million

New York Giants

$46.9 million

Las Vegas Raiders

$48.3 million

Cincinnati Bengals

$35.6 million

Houston Texans

$37.6 million

New England Patriots

$33.7 million

Seattle Seahawks

$31 million

Baltimore Ravens

$24.2 million

Arizona Cardinals

$14.6 million

Final word

Although there are different factors, including luxury taxes and reverse-order drafts, the NFL salary cap has immensely attributed to the league being effortlessly more competitive. Additionally, it has brought a kind of harmony between the management, subordinate staff, and players, especially in terms of finances.

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Claudia Kogi
Claudia Kogi is a Kenyan content creator with over 3 years of experience. Claudia joined as a writer in January 2022, covering sports and relatable content.