How to Know NFL Salary Cap Rules

The National Football League (NFL) is the most popular and competitive sports league in America. One of the main reasons for the level playing field is the salary cap that the NFL institutes for each team. There are ways that teams can manipulate the salary cap to their advantage but as general rule the NFL salary cap is the most equitable in all of professional sports. Read on to learn how to know NFL salary cap rules.

Instructions

    • 1

      Calculate the salary cap for the given year. Under the collective bargaining agreement between NFL players association and NFL owners, the salary cap is set a percentage of total football revenue. In 2008 this figure was 62.24 percent. This figure translates to a dollar amount of $109 million per team.

    • 2

      Understand that there is a minimum salary cap floor for each team. This figure is 75 percent of the salary cap for a given year. In 2007 this figure will be $81.75 million. Which is 75 percent of the $109 million salary cap. No NFL team can spend less than this amount on player salaries.

    • 3

      Realize that player contracts are not guaranteed. When an NFL player is cut the NFL is not obligated to pay him any more of the money left on his contract. However signing bonuses are a way for player to get money up front. Signing bonus are paid to the player upon signing but are prorated for life of contract. For example a player signs a four year contact with a $20 million signing bonus. This bonus then counts $5 million per year against the salary cap. But if the player is released after the second year of the contract the signing bonus is accelerated so that $10 million is counted against the cap in the third year. There are exceptions to the non-guaranteed contract.

    • 4

      Recognize that each team has franchise tag available. This franchise exception can only be exercised once a year and on a player that is to be become a free agent and would be able to sign with any other team. There are two types of franchise players: Exclusive and non-exclusive. An exclusive player cannot negotiate with any other team and will be paid the average of the top five players at his position or 120 percent of the previous years salary whichever is greater. Non-exclusive can negotiate with any other team but if the player is signed, the signing must give the original team two first round picks. The salary considerations are the same as exclusive. These contracts are guaranteed.

    • 5

      Know that each NFL team also has a transition tag available for each season. The transition is used sparingly compared to the franchise tag. It can only be used once a season on a player. The NFL team has a right to match any contract offered to the transition player. If the team matches any offer then the player must sign with the original team. If the team declines to match then the NFL team receives no compensation.