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What does NFL salary cap increase really mean? Three league executives weigh in

February 24th, 2024

Just before the NFL scouting combine kicks off, the league released key information to its clubs Friday.

The 2024 salary cap, the NFL announced in a release, will be $255.4 million per club. Each club will also receive an additional $74 million for performance-based pay and benefits for retired players.

The distribution of the league’s whopping $10.5 billion came with some context from the league.

“The unprecedented $30 million increase per club in this year’s Salary Cap,” the release said, “is the result of the full repayment of all amounts advanced by the clubs and deferred by the players during the Covid pandemic as well as an extraordinary increase in media revenue for the 2024 season.”

The context was accurate and relevant. But it’s incomplete.

What exactly will this new cap figure mean for teams navigating free agency and draft decision-making? And how much is the league actually receiving a boon beyond normal parameters? Yahoo Sports spoke with executives across the league to understand. Here are our top three takeaways:

1. Context matters with raw NFL salary cap numbers vs. percentage

It’s true that the $30 million increase in each team’s salary cap percentage is a record for the money-making league. And one NFC executive credited NFLPA executive director Lloyd Howell for seeming to take a collaborative rather than combative approach in his first year as the league and union agreed to the $255.4 million cap.

However, three league executives viewed this more as a reset from the COVID-19 loss than a massive boon from the increasingly diversified profile of league media rights. They also viewed this through a metric by which the increase does not set a record.

“Look, at the end of the day … it’s good, don’t get me wrong,” one NFC executive told Yahoo Sports. “The one thing that people don’t do when they have these conversations is they don’t look at it on a percentage basis.”

Teams expected to trade or release stars, like the Denver Broncos with quarterback Russell Wilson, can now choose to absorb an increasing portion of their dead cap space this year. (Photo by Perry Knotts/Getty Images)

From 2023 to 2024, NFL teams will have 13.61% more salary cap space, per Spotrac.com. That trails the 2022 offseason increase of 14.08% (the initial COVID-19 rebound), the 2006 increase of 19.3% and the 1998 increase of 26.38%.

Even more notable is how the total net increase of cap space in the four years since COVID-19 compared to the four prior. The NFL cap increased 27.6% from 2016 to 2020. It increased 28.9% from 2020 to 2024.

2. Even so, this NFL salary cap bump exceeded expectations

NFL cap staffers across the league know to err on the side of caution. They prefer to project conservatively to ensure they can handle all their needs and then enjoy the extra space rather than be at a loss for what they need. One NFC executive said they set up their team plan with a projection of $245 to $250 million, another said “somewhere in the range” of $247 million and a third said $250 million. The projection exceeded all of their expectations.

The executives were split on what that impact would look like. An AFC executive said they believed the same teams who planned to spend will do so, but they’ll now spend more aggressively. An NFC executive said they believed the impact “is pretty neutralized by everyone receiving the same bump.”

“I don’t think it means that you’re gonna go out there all of a sudden and do things that you wouldn’t have ordinarily done,” the other NFC executive agreed. “But now you might have a little bit more room to do it or you might be able to change the methodology of how you utilize it as opposed to how you’ve been doing it the last couple of years.”

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Expect teams to offer fewer voidable years on contracts and take more cap hits now. Teams expected to trade or release stars, like the Denver Broncos with quarterback Russell Wilson, can now choose to absorb an increasing portion of their dead cap space this year.

3. Here’s the group of players one exec thinks will be most affected

Franchise tags, one executive believed, could be used more liberally this year. Franchise tags help teams by not needing to commit to a player long-term and perhaps not for the highest average annual value per year, but they limit teams as they require an entire cap hit to land in the year of the tag. The 2024 bump is unlikely to change whom teams want to tag, but could tip the scales if a team was wavering.

Then comes the NFL’s so-called middle class. An NFC executive projected that an increasing number of Tier 2 and Tier 3 free agent players and their agents will misjudge the markets of what they can command.

“Everybody’s gonna look at the increase and say, ‘Man, there’s gonna be this spending spree because everybody has a lot more money to spend,’ which is not a holistic view with the market,” the executive said. “What people don’t understand is that there’s been a number of clubs that have been, from a cap perspective, operating in the red for two to three years. So are they going to use this added room to get back in the black or are they going to use it to spend?

“The analogy I’ve made is if you’re maxing out your credit cards every year and then all of a sudden you get a big bonus at work, are you paying off your debt or are you going to accrue more? Just as we see in reality, there’s going to be some teams that will continue to spend and continue to be out there. But I do think that there’ll be several clubs that will say, ‘This is gonna be our time period to get healthy.’”

If teams opt to finance conservatively and players don’t receive the offers they want, they may opt for one-year deals akin to franchise tags in order to hit the open market again next season, the executive predicted.

“Superstars get paid no matter what the market is,” the executive said. “The question is how much does that filter down to the next run of guys.”

This content was originally sourced and posted at Yahoo! Sports – News, Scores, Standings, Rumors, Fantasy Games »
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