2024 NFL free agency: The salary cap explained

The NFL salary cap is a complicated beast, but it’s one of the most important things to know in order to form a good team. The 2024 salary cap is set to $255.4 million. Here’s what that means for the teams, players, and the players’ contracts.

What is a salary cap?

The salary cap is a limit on the amount of money an NFL team can spend on player contracts (including base salary and bonuses). This is different from other sports leagues like the NBA because it is a hard cap, leaving no room for flexibility. The cap is set to $255.4 million this year, and no team may exceed that number.

It was implemented as a way for the league to control spending on player salaries and limit financial risks. The NFL believes that it is more fair to have every team with the same spending limitation to avoid rich owners simply buying better players (and therefore, presumably, Super Bowl trophies) simply because they can.

The salary cap number increases nearly every year (with the exception of 2020 after the Covid pandemic). It is decided by dividing the percentage of revenues negotiated in the Collective Bargaining Agreement (CBA) by the 32 teams in the NFL. The CBA says that NFL owners and players must split revenues (from media, NFL ventures/playoffs, and local); players are currently receiving 48% of profits. This year’s rise was a staggering $30.6 million, but the reason for such a massive increase is that the league decided to put right the Covid situation in one hit.

Though teams cannot exceed the cap, there are, as always, loopholes. Signing bonuses are typically paid immediately, but are prorated over the length of the player’s contract (or five years, whichever is shorter). For example, if a player gets a $20 million signing bonus on a five-year contract, he gets that money upfront, but the team is only getting $4 million hits in cap space each year. And of course, contracts can always be restructured by manipulating base salaries and bonuses to allow for more cap space.

Most teams will be over the cap space in the offseason, and have until the start of the next season to adjust. The 2024 season “starts” March 13, and the teams have until 4 p.m. on that day to get within the cap, which means trading and restructuring contracts. After 4 p.m., they can officially start signing contracts with unrestricted free agents.

Coaches, owners, and NFL staff members’ salaries are not included in the salary cap equation.

Dead money

The teams have to keep in mind what they call “dead money”, which is the money that’s been fully guaranteed to a player who is no longer on the team due to a release or trade. If a player is cut, he still must be paid for the full outstanding amount, which can reduce a team’s cap space by a lot. On the other hand, it protects the player from being cut if the team is tight on cap space. It is possible to spread the dead cap hit over two seasons if the player is released or traded after June 1.

What is “effective cap space”?

Effective cap space is the true amount of money the team has to spend after taking into account all future expenses and subtracting any dead money.

“The Rule of 51″

The NFL’s Rule of 51 says that during the offseason, only the 51 most expensive contracts count against the team’s salary cap, staying in effect until the start of the regular season. Once the regular season begins, all 53 players on the roster will count towards the salary cap, plus those on IR, Pup, and the practice squad.

Unused salary cap

There is actually a salary floor as well as a salary cap. Teams do not have to spend all the allowed money, but they must spend at least 89% over a four-year timespan. The NFL as a whole must spend at least 95% of the cap.

Any money that is not used in the allowed cap space can be rolled over to the next season. The teams have to tell the league they plan to do so by 4 p.m. ET the day after the regular season ends.

Which NFL team has the most salary cap space in 2024?

The Washington Commanders have a staggering $86.7 million in cap space for free agents, plus the second overall pick in the NFL Draft. Even after adding several players during the offseason, the Commanders have remained the team with the most in cap space in 2024. After the Commanders, the teams with the most in cap space currently are the Tennessee Titans ($80,335,705), the New England Patriots ($72,632,699), the Chicago Bears: $63,811,370), and the Houston Texans ($62,882,850).

Which NFL team has the least salary cap space in 2024?

The team with the least amount of cap space currently is the Los Angeles Chargers. At the moment, they are actually over the cap by $20.6 million and will have to make some huge decisions in the next 24 hours. Other teams currently over the cap are the Ravens ($180,381), the Chiefs ($5,650,139), the Saints ($10,912,634), and the Bills ($14,879,047), all of whom are in the red.

Of teams who are currently within the rules, the Dallas Cowboys have a paltry $2.2 million in cap space left, which is the lowest of any other team.

Salary cap space for all 32 NFL teams in 2024

(All numbers taken from Over the Cap)

Commanders

Patriots

Titans

Bears

Cardinals

Texans

Seahawks

Eagles

Bengals

Colts

Packers

Vikings

Lions

Panthers

Rams

Broncos

Steelers

Raiders

Jets

Giants

Falcons

Buccaneers

Jaguars

49ers

Browns

Dolphins

Cowboys

Ravens

Chiefs

Saints

Bills

Chargers