The Philadelphia Eagles and New Orleans Saints have gone out of their way to leverage future salary cap for players currently on their roster, shifting massive portions of their commitments into the future like buying on a credit card. With conversations around a new collective bargaining agreement between the NFL Players Association and the NFL set to begin in the next 12 months, NFL Commissioner Roger Goodell and some outspoken owners are attempting to change this practice. The NFL has a few ways that teams can lower the salary cap hit in a current season and apply that charge to future years. One way no one is talking about eliminating is the difference between Likely To Be Earned incentives and Not Likely To Be Earned incentives. If it’s LTBE, it counts on the cap for the current season but it is subtracted at the end of the year if the player doesn’t reach the benchmark. If it’s NLTBE, it doesn’t count for the current season. If the player hits the incentive, the cap charge is applied to the following year. Teams will often use NLTBE incentives with players coming off injury. For instance, when they missed most of the previous season, they add an incentive for playing in 40% of the snaps in the current season. They are probably going to get there, assuming they stay healthy, but it won’t count on the cap right away. Same thing for a sack incentive — if your injured pass rusher is returning from a single-sack season, adding a $1 million bonus for them to get to three sacks is a great way to account for something later instead of now. The biggest salary cap mechanism the NFL is considering doing away with is the practice of using contract restructures or option bonuses to spread out a cap hit over five years. Under the CBA, a signing bonus can be prorated or spread evenly over up to five seasons. The player gets a bunch of money up front, but the cap charge is delayed. Teams are converting a player’s base salary in every season to a new signing bonus in order to spread out the cap hit. As long as the salary cap keeps going up as it has, you can keep passing the buck over and over again until you enter a doom spiral or take your medicine over the course of one or two seasons. Just as you’d expect, the griping about changes to the NFL salary cap is all about money. These contract restructures, signing bonuses, and option bonuses are large lump sums of money. Not every NFL owner is cash-flush to afford front-loading these massive deals on multiple players every year. Base salaries are not only paid later, but they are paid on a per-week basis to spread out the financial pain. It’s not a huge cash dump to one player at one time draining the bank account. There is another factor here in the use of void years. Teams can pay a player on a one-year deal $10 million but only count $2 million in the current year with $8 million being applied to the subsequent year. They create fake or void years on the contract to spread out the hit, but it all accelerates when those years void at the end of the current season. Some owners feel this creates an unfair advantage since the cap number doesn’t reflect spending in the current year. That difference between cash spending and cap spending is what Roger Goodell was referring to in May when he questioned the “integrity” of the NFL’s salary cap. Still, every dollar paid in compensation is accounted for, so there is integrity, it just might be delayed. The NFLPA has no incentive to change the way these bonuses are paid or structured. Players get the money up front and that’s good for them in opportunity cost and compound interest. As we have seen over and over again, though, if the NFL wants something in the CBA, they are usually able to make it happen. Whether it’s adding games (which they will certainly try to incorporate into the next deal) or things like the Rookie Wage Scale or the franchise tag, the NFL has been able to get what they want at the table. It really comes down to how many NFL owners really want to make the change. I think most of the owners and especially the influential ones want to keep the flexibility of the current system, so I don’t think it’s particularly likely to change. The owners of the Bengals, Raiders, and other smaller-pursed teams don’t have the numbers or influence. The NFL has what is called a soft cap because they can use various mechanisms to spread out the cap hits into the future. The alternative is a hard cap in which every dollar spent during a league year is accounted for in that league year. That would likely mean the days of huge signing bonuses are over. Twelve NFL players have received signing bonuses of $50 million or more in the history of the league, but that would be problematic as it’s more than 1/6th of the salary cap this year. Only one player in NFL history has ever had a $50 million cap charge in a single year, and that was when the Broncos cut bait with Russell Wilson in 2024. Because current contracts have already been structured, the NFL would need to give lead time on it, as well, to allow teams to prepare. The time horizon would ideally be five or six seasons as the cap transitioned from soft to hard.
