A Quick Explanation of the NFL Salary Cap

I’ve received numerous questions about the Giants salary cap — how they can’t seem to make a splash in free agency, etc.

I’ve been meaning to do my cap update – been slowed down a bit this week and now am up to my ears, as you can probably imagine with training camp. (Plus I’m told that the numbers I need to update what I have won’t be available until later this coming week.)

However, I’ll give you a quick refresher on how contracts are calculated so you can hopefully get a sense of how this thing works.

First, under the new CBA, only the top 51 player contracts count under the cap. Contracts for players 52-90 don’t matter in the grand scheme of things so long as the top 51 fall under that $120M mark. That’s because you have reserve/future contracts that factor into the mix.

Ok, so how do you calculate a player’s value against the cap? Simple. You take the length of the contract, divide the signing bonus up, and look at the other numbers included in that year’s deal to get the cap figure.

To illustrate, let’s look at what was left on the contract for one of the veteran players cut by the Giants at the start of camp.

The player in question originally inked a six-year had two years remaining on that deal when he was cut this year. His signing bonus was reported to be $600K, which when spread out over the life of the six-year contract, comes to $100K per year.

In 2011, he was also due a roster bonus of $100K, which obviously he won’t collect, and a base salary of $1M.

Had this player been kept, he would have counted for $1.2M against the cap – that’s $100K signing bonus plus his base plus his roster bonus.

By cutting him, the Giants save $900K this year because you have to subtract the prorated balance on the signing bonus from the cap savings, which in this case is $200K.

Using another quick example, this is why the Giants, when they signed OL Shawn Andrews, gave him such a low signing bonus of $250K. They knew that if Andrews didn’t work out, they could potentially be stuck with a huge hole lint heir cap, so instead what assistant GM Kevin Abrams did was create a contract that was loaded with incentives and bonuses which, if never reached, wouldn’t count against the team’s cap.

Bottom line: when a player is removed from the roster, his base salary goes away, and depending on when he’s removed, so too does his roster bonus and any scheduled playing incentives that were factored into his current year’s earning. So for instance, when the Redskins traded away Donovan McNabb and Albert Haynesworth, suddenly they had a nice little surplus of money to work with.

As for the Eagles, I’m not aware of their cap numbers per say, but if I recall correctly, timing worked out in their favor to where they had a bunch of contracts expire that created a surplus of cap room for them.