understanding the salary cap and free agency
 

Salary Cap: Though it doesn't seem that way, the NFL has a hard salary cap of $80.582 million. Teams must be under the cap from March 3 through the remainder of the year. The salary cap is calculated by adding the base salary with any roster or reporting bonuses, a prorated part of the signing bonus and any incentives that are considered likely to be earned.

Prorated signing bonuses: This is the hardest thing about the cap to understand. Signing bonuses are spread for cap purposes over the length of the contract. For example, a $4 million signing bonus spread over a four-year contract counts $1 million against the 2004 cap. This explains why a team can pay a player $5 million in one season and it counts only $2 million against the cap. You add the $1 million base with the 2004 pro-rated part of the signing bonus and you have a $2 million cap number.


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