What Is the NFL Salary Cap and How Does It Function?

The NFL is not only one of the highest-grossing sports in the United States, but it’s also one of the highest-grossing industries in the country. With so much revenue being generated by the league, players are compensated quite well.  Still, there are rules in place that keep this money in check.

A salary cap is essentially an agreement between the league and players

A salary cap is essentially an agreement between the league and players that places a limit on the amount of money a team can spend on salaries for players.  The NFL uses a hard cap, meaning that no team is allowed to exceed the cap limit for any reason.

There is also a minimum salary 

There is also a minimum salary under the new CBA.  The salary floor for each team is 89 percent of the cap.  For 2013, this means that each team must be over $109.47 million.

Contract Details

Teams tend to make contracts like these back-heavy, meaning that the player gets paid more in the later years of the contract. If a team wishes to not pay the player in the later years, they can either release the player or renegotiate the contract.

Things get a little confusing when a player signs a contract extension

Aaron Rodgers recently signed a five-year extension with a $35 million signing bonus to extend his contract though the 2019 season.  With the signing bonus for the extension, it actually impacts the cap every year of his entire contract, rather than just the years extended.  This means that Rodgers’ signing bonus will be worth $5 million against the cap each year for the next seven years.

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