Mike Florio of Pro Football Talk wrote an article about NFL commissioner Roger Goodell’s recent comments, which, among other things, include that team owners believe they should be receiving a bigger share of the financial pie. Rich people want more money. Big woop, right?
Well, also included in the article was a quote from Goodell saying that the league is looking into “the integrity” of the “cap system itself,” which could be a bigger piece of news than the percentage point of money that NFL players will receive from the league’s television contracts.
“There are no formal plans on any discussions,” Goodell told reporters. “We obviously continue to be in close communication with the union on a variety of matters, but no start of negotiations have been set or are under consideration really at this point. We did spend time today talking, at length, about areas of our Collective Bargaining Agreement that we want to focus on. The two areas that we spent time on were really the cap system itself, the integrity of that system, how’s it working, where do we need to address that in the context of collective bargaining, when that does happen. That was a very lengthy discussion.”
At this point, you might be wondering, “What integrity issues does the NFL salary cap have? It’s a hard cap.” And while that is true, the manipulation of the salary cap, via salary-to-bonus conversions, has been on the rise since the league’s salary cap ceiling initially dropped in 2020 to combat the loss of money that went hand-in-hand with the Covid season.
Prior to that year, it was extremely rare for teams to turn salaries into bonuses because of the amount of dead cap they created in future years. The only exceptions before 2020 were really the New England Patriots and New Orleans Saints, the two teams that decided to go “all-in” with aging quarterbacks in Tom Brady and Drew Brees. Since the Covid year forced teams to learn how to manipulate the salary cap, though, the disparity between cash spending among NFL teams has been on the rise across the board.
For example, if I were a general manager and wanted to pay a player a one-year, $50 million contract in 2025, I could pay him that $50 million in salary — game checks — and simply pay all of that $50 million on the cap in 2025. If I wanted to manipulate that number to its extreme though, I could pay the difference between his $50 million salary and the league minimum salary, which maxes out around $1.3 million for a veteran who is at least seven seasons into his NFL career, and convert the rest of that money into a signing bonus with four “void years” attached to the end of his one-year deal to impact the salary cap as little as possible in the short term. Using that second method, the bonus could be spread up to over five years on the salary cap, meaning that the $50 million player would only cost around $10 million against the 2025 cap (though the remaining $40 million would be guaranteed to hit the cap in future years).
With the NFL salary cap rising about $25 million per team per year, this brings up two interesting questions. First of all, if the cap is rising $25 million a year, then why wouldn’t you push cap hits into the future by default, as cap dollars become more diluted over time in terms of the percentage of the salary cap? Secondly, if teams become aware of this, how soon are we entering an era where it will be impossible to win a Super Bowl without being “all-in” and putting a team on a credit card?
The recent success of the Philadelphia Eagles, a team that spent $115 million more in cash than the Las Vegas Raiders in 2024 and is set to be a top-seven cash spender in the NFL again in 2025, almost certainly is an issue for some ownership groups. The Eagles’ mantra has been to extend players early on their rookie contracts, sometimes immediately after their third year in the league is over, and to consistently convert their salaries into signing bonuses to spread the cap payments over several years, by which point cap dollars will be more diluted. The timing of their contracts all escalate up to the 2029 season, which is when the NFL is expected to opt out of their current broadcast deals and sign a massive new set of contracts with streaming services.
In the world the Eagles are operating in, it’s a legitimate strategy to be hyper-aggressive at the start of new broadcast contracts and then slowly make cap payments on those teams as you reach the end of the deal. That only works if owners are willing to pay that kind of big cash immediately, though, which we’ve seen teams like the Raiders and Cincinnati Bengals balk at over the last decade.
The game is different when people are playing the game. The idea of the “hard cap” made sense up until Covid, but now teams are well aware of how salary conversions and void years can be used to manipulate the current cap system. If I were to guess as to what Goodell was referring to, the “integrity” question that league members are asking themselves is whether how the NFL treats the accounting of signing bonus and/or roster bonus dollars on the cap should be changed under the next collective bargaining agreement.
Funnily enough, the biggest benefactor of this might be the Eagles, the team that has taken advantage of this strategy more than anyone. A change to the cap system will mean that teams will no longer be able to do what Philadelphia executed, all the way to a Super Bowl.