- PREMIUM
- HOME
- NFL
Popular Pages
Transactions
Trending Players
AFC East
AFC North
AFC South
NFC East
NFC North
NFC South
- NBA
Popular Pages
Transactions
Trending Players
Southeast
Atlantic
Southwest
Northwest
- MLB
Popular Pages
Transactions
Trending Players
AL West
AL East
NL West
NL East
- NHL
Popular Pages
Transactions
Trending Players
Atlantic
Pacific
- WNBA
Popular Pages
Transactions
Trending Players
Eastern
- EPL
Popular Pages
Transactions
Trending Players
- MLS
Transactions
Trending Players
Eastern
- ATL Atlanta UnitedAtlanta United FC
- MTL MontrealCF Montreal
- CLT CharlotteCharlotte FC
- CHI FireChicago Fire
- CLB Columbus CrewColumbus Crew
- DC UnitedD.C. United
- CIN CincinnatiFC Cincinnati
- MIA Inter MiamiInter Miami FC
- NSH NashvilleNashville SC
- NE RevolutionNew England Revolution
- NYC New York CityNew York City FC
- RBNY Red BullsNew York Red Bulls
- ORL Orlando CityOrlando City
- PHI UnionPhiladelphia Union
- TOR TorontoToronto FC
Western
- ATX AustinAustin FC
- COL RapidsColorado Rapids
- DAL DallasFC Dallas
- HOU DynamoHouston Dynamo
- LA GalaxyLA Galaxy
- LAFC Los AngelesLos Angeles FC
- MIN MinnesotaMinnesota United FC
- POR TimbersPortland Timbers
- RSL Real Salt LakeReal Salt Lake
- SD San Diego FCSan Diego FC
- SJ EarthquakesSan Jose Earthquakes
- SEA SoundersSeattle Sounders FC
- SKC Kansas CitySporting Kansas City
- STL St. Louis CITYSt. Louis CITY SC
- VAN WhitecapsVancouver Whitecaps FC
- NWSL
Popular Pages
Transactions
Trending Players
- ACFC Angel City FCAngel City FC
- BFC Bay FCBay FC
- CHI Chicago Red StarsChicago Red Stars
- HOU Houston DashHouston Dash
- KC Kansas City CurrentKansas City Current
- NJNY NJ/NY Gotham FCNJ/NY Gotham FC
- NC North Carolina CourageNorth Carolina Courage
- ORL Orlando PrideOrlando Pride
- POR Portland Thorns FCPortland Thorns FC
- LOU Racing Louisville FCRacing Louisville FC
- SD San Diego Wave FCSan Diego Wave FC
- SEA Seattle Reign FCSeattle Reign FC
- UTA Utah Royals FCUtah Royals FC
- WAS Washington SpiritWashington Spirit
- GOLF
- TENNIS
ATP
WTA
- RACING
NASCAR CUP
FORMULA 1
- PVF
- OLYMPICS
Understanding NFL Dead Cap
The unfortunately named, often confused, NFL buzz phrase finds itself at the forefront of many conversations this time of year, as roster decisions begin to take shape for the upcoming season. So what is dead cap? Any future, unpaid, guaranteed salary or bonus or any already paid signing bonus that hasn't yet been allocated to the salary cap becomes the responsibility of the team in the event of a release. With a trade, the future guarantees would simply transfer to the new team, leaving behind just the unallocated bonus cap as the current team's dead cap. Still lost? Hopefully the following helps a little...
Example Contract: Player A
- Total Contract: 5 years, $77.5 million
- Signing Bonus: $20 million
- Guaranteed at Signing: 2023 salary, 2024 salary
Out of the gate, this contract comes with $35M of dead cap - the total amount guaranteed at signing (signing bonus + 2023 base salary + 2024 base salary). Once the player completes his offseason workout program, that $100,000 bonus will be added to the dead cap total. If we look at the 2024 dead cap initially, it represents four years of signing bonus proration ($4M x 4), plus the not yet paid but fully guaranteed $10M base salary, or $26M total.
Future Guaranteed Salary or Roster Bonuses
Any guaranteed base salary that has yet to be paid out is considered dead cap on the contract. Should the player be released, all guaranteed salary will accelerate and be treated as dead cap in the current season. If traded, any unpaid guaranteed salary will transfer to the new team.
Signing or Option Bonuses
When signing or option bonuses are paid, the cap hits for these prorate over the remainder of the contract (max 5 years). For instance, a $20M signing bonus paid on a 5 year contract would account for $4M of bonus cap in each of the contract’s years. If this said player is released prior to year 3 of the contract, that leaves $12M of cap from that bonus still unallocated, which in turn becomes dead cap. This works the same for an option bonus (generally paid out in year 2 of a contract).
The June 1st Dead Cap Rule
Pre June 1st
If a trade, release, or retirement is processed before June 1st in a given league year, ALL of the current & future dead cap associated with the contract is accelerated into the current season.
If Player A was released on March 20th prior to his 2nd season, all $26M of dead cap remaining on the contract (the $10M base salary + $16M of signing bonus cap) would accelerate into dead cap immediately. The team would take on a $26M dead cap hit, losing almost $12M in space.
Post June 1st
If a trade, release, or retirement is processed after June 1st in a given league year, the dead cap allocation splits between the current & following year as such:
Current Year Dead Cap
Any bonus proration in the current year of the contract + any unpaid guaranteed salary or roster bonus. Any cash owed to the player via base salary or roster bonus would immediately accelerate the current year’s dead cap.
Next Year Dead Cap
All of the remaining unallocated bonus dead cap for all future years of the contract.
For Example:
If Player A was cut on June 2nd prior to his 2nd season, the $26M of dead cap would split as:
Current Year: $4M of current year signing bonus proration + $10M guaranteed salary: $14M
Next Year: $12M of remaining future year signing bonus proration
The Post June 1st Designation
Per the terms of the current CBA, each team is now able to designate two players as “Post June 1st releases”. If Player A’s team knows they want to release him, but also want to benefit from the dead cap split after June 1st, they can designate him as such as soon as the league year begins in March. A few things to note here:
- The designating team must carry his entire cap hit for that current year on their books until 4PM ET June 1st. At that point, the transaction (release or retirement) can become official, and the Post June 1st dead cap split can occur. So in our Player A example, if he were designated as a Post 6/1 Release in March of 2024, his team would need to carry a $14.1M cap figure on their books until 6/1.
- Any bonuses or salary triggers that were set to happen prior to June 1st are no longer valid, as the contract has been unofficially ceased per the designation.
- This designation is only available for releases - not trades. It can unofficially be used in retirements as a player can announce his intent to retire in March, but the team can wait to process that designation until after June 2nd for dead cap purposes.
- The player is free to negotiate and sign elsewhere immediately upon the Post 6/1 Designation occurring. They do not need to wait until June 2nd.
The Post June 1st Cap Hit Work Around
One of the more popular recent trends is manipulate a contract prior to the start of a league year (or even immediately prior to a Post 6/1 Designation), in order to make life a little easier for a few months. What are we talking about?
Player A is going to be released with a Post June 1st Designation in March of 2025, but the team doesn’t feel great about carrying a $16.1M cap figure until June 1st just to allow for this to happen. They work with the player/agent to negotiate a “dummy restructure”, lowering his $12M base salary down to the league minimum (let’s assume $1.5M) prior to the release occurring. Now, the team can carry his contract at a $5.6M cap hit through June 1st, then process the release officially.
Why would the player agree to this? Any non-guaranteed salary on a contract that’s about to be ripped up is essentially funny money. The player is off to free agency in search of a new deal, so generally speaking, most player/agents are getting on board with helping the team out in situations like this.
Still lost? Additional or more specific questions? Hit us up @spotrac.
CATEGORIES
- NBA 98
- NFL 69
- GOLF 54
- NWSL 44
- MLB 28
- NHL 1
AUTHORS
- Michael Ginnitti NFL, MLB
- Keith Smith NBA
- Scott Allen Contributor
- Taylor Vincent NWSL
Predicting a Mets Free Agency Sans Juan Soto
The Mets have 12 players set to hit the open market, and are squarely in the Juan Soto blockbuster conversation this winter. But if not Soto, how can the Mets allocate $550M elsewhere? READ MORE
Initial 2025 Cap Space and Spending Power Projections
An early look at the 2025 cap space and spending power projections.
Analyzing & Predicting Juan Soto's Free Agent Contract
As MLB officially flips the switch to offseason-mode, the focus immediately turns to Juan Soto, the most exciting free agent since: well Shohei Ohtani 12 months ago. We’ll take a few moments here to dive into a calculated value & predicted outcome for Soto’s free agent journey over the next few weeks.
8 of the Scariest Active Contracts
Spotrac celebrates the Halloween season with a look at 8 of the scarier active contracts in major professional sports, including two each from the NFL, NBA, MLB, & NHL.
MLB Offseason Trade Candidates
With the MLB offseason now officially here, Spotrac takes a look at players across the league who could be on the trade block in the coming weeks & months.
TRENDING PLAYERS
- 1 DeAndre Hopkins (WR, KC)
- 2 Carson Wentz (QB, KC)
- 3 Baker Mayfield (QB, TB)
- 4 Kareem Hunt (RB, KC)
- 5 Patrick Mahomes (QB, KC)
TRENDING PAGES
- 1 MLB Free Agents
- 2 NFL Free Agents
- 3 NFL Transactions
- 4 MLB Transactions
- 5 NFL Salary Rankings