The NFL has done their number crunching. Earlier in the offseason, the league announced what they projected the 2023 salary cap baseline to be; $224.8 million. It’s a baseline because a few CBAs ago, the league and the NFLPA agreed that the classic Cingular Wireless perk of rollover minutes was coming to football.
Salary cap space was no longer use or lose like your PTO near the end of the fiscal year. Instead if a team didn’t use all of the cap space from the prior year, they simply added it on for additional space in the coming season. Due to some intricate factors in determining just how much that was, it takes until close to the start of the new league year for all the calculations to be completed and now that it has, Dallas gained an additional $5.5 million of space.
The NFL has finalized its year-end club adjustments, which factor in incentives, roster bonuses, carryover cap space, etc. That figure was then added to or subtracted from $224.8M to determine each team’s adjusted cap number for 2023.
A look at each team’s adjusted cap number: pic.twitter.com/sxbs04nXE6
— Field Yates (@FieldYates) March 6, 2023
The delay in reveal is primarily centered around bonus and incentive calculations. There are basically two types; likely-to-be-earned (LTBE) and not-likely-to-be-earned (NLTBE), and they are treated very differently.
The distinction is based on past performance. Say a player has a clause in their contract where each season they receive $1 million in bonus money for getting to 10 sacks.
Player X had eight sacks the year before signing the contract. Because they failed to reach that milestone the season prior, that bonus is categorized as NLTBE. It won’t count against the team’s in-season cap calculation (teams have to remain compliant every day of the league year). But if that player gets 12 sacks, at the end of the year that bonus is added to the cap.
This is one reason why teams always keep a couple million of space throughout the year, in addition to needing to be able to sign injury replacements.
But back to Player X.
When the cap calculations for the next season come around, he’s hit the marker of double-digit sacks. That $1 million potential bonus for the following year is now classified as LTBE and hits the cap immediately.
But Player X suffers an unfortunate injury, plays in 10 games and only has seven sacks. At the end of the year, that $1 million hit is removed from the cap calculations.
So after the season is over, the league and their teams goes through the lengthy process of reviewing every players’ LTBE and NLTBE hits and misses to finalize just how much cap room they ended up leaving on the table, and that’s what is used to adjust the current season’s cap for each team.
As for the Cowboys, even with the adjustment they are still over the cap right now. After franchising Tony Pollard they need to create $16 million worth of space before the league year starts, just to avoid the league cancelling some of their contracts.