1. Salary Cap Basics Presented by Jason Fitzgerald May 29, 2013
Caponomics 101
Salary Cap Basics
Presented by Jason Fitzgerald
May 29, 2013
Copyright Jason Fitzgerald
11/23/2018

2. What Is the Salary Cap
An amount of accounting dollars each team is allocated to spend in a season on their roster
Copyright Jason Fitzgerald
11/23/2018

3. Determining the amount
Three “revenue buckets” are distributed
League Media- 55%
NFL Ventures- 45%
Local Revenue- 40%
The NFL receives credits for
Joint Contribution- 47.5%
Private Stadium Funding
Copyright Jason Fitzgerald
11/23/2018

4. Determining the Amount
Player costs can not be lower than 47% nor greater than 48.5% of projected revenues
Player costs can decrease to 46% after stadium credit application
Player costs are reduced by projected player benefits to determine leaguewide salary cap
Copyright Jason Fitzgerald
11/23/2018

5. Determining the Amount
Example Inputs:
League Media: $6,000,000,000
NFL Ventures: $2,000,000,000
Local Revenue: $1,400,000,000
Joint Contribution: $58,000,000
Stadium Credit: $0
Player Benefits: $740,000,000
Total Revenues: $9.4 billion
Bands: Upper: $4.559 billion; Lower: $4.418 billion
Copyright Jason Fitzgerald
11/23/2018

6. Determining the Amount
Player Cost Calculation:
League Media: $6 billion x 0.55 = $3.3 billion
NFL Ventures: $2 billion x 0.45 = $900 million
Local Revenue: $1.4 billion x 0.4 = $560 million
Joint Cont.: $58 million x = ($ million)
Total Player Costs: $4,732,450,000
Cost is lower than upper band of $4,559,000,000
Per Club Total: $4.559 billion/32 = $142,468,750
Copyright Jason Fitzgerald
11/23/2018

7. Determining the Amount
Salary Cap Calculation:
Player Benefits: $740 million/32= $ million
Cap: $142,368,750- $23,125,000 = $119,343,750
Each team can spend $119,343,750 to play the game of football in the season
Copyright Jason Fitzgerald
11/23/2018

8. Minimum Spending There is no salary cap spending floor.
Teams can be as far below the cap as wanted
Eagles had $23 million in unused cap space in 2012
There are cash spending floors in the NFL
League: 95% of & salary caps
Team: 89% of & salary caps
Copyright Jason Fitzgerald
11/23/2018

9. Minimum Spending Examples Leaguewide: Team:
4 Year caps: $120, $130, $140, & $150 million
Leaguewide:
$540 million x 32 teams x 0.95= $ billion
Team:
$540 million x 0.89= $480.6 million
Copyright Jason Fitzgerald
11/23/2018

10. Minimum Spending Failure to Meet Cash Minimums
Payback players money owed
No cap penalties
No league fines
Copyright Jason Fitzgerald
11/23/2018

11. Cap Adjustments Each team will have cap adjusted up or down
Prior Year Carryover
Cap dollars not spent in prior season
Adjustments
Salary unpaid by counted on prior cap (LTBE)
Salary paid but not counted on prior cap (NLTBE)
Finalized Grievances
League Penalties
Cap imposed fines by NFL
Copyright Jason Fitzgerald
11/23/2018

12. Cap Adjustments 2013 Adjusted Team Salary Caps
Copyright Jason Fitzgerald
11/23/2018

13. Salary Cap Timelines The Salary Cap is in effect 365 days a year
Runs from start to finish of a League Year
Top 51 Rule limits contracts that count
Runs from start of League Year to final cut date
Only refers to Paragraph 5
Copyright Jason Fitzgerald
11/23/2018

14. Who Counts Towards the Cap
Contract players
Active Roster
Injured Reserve
Physically Unable to Perform (PUP)
Practice Squad
Former players
Acceleration from bonuses/Dead money
Salary paid prior to release
Guaranteed salary
Grievances
Injury Settlements
Termination pay
Copyright Jason Fitzgerald
11/23/2018

15. What Counts on the Cap Contracted salary All prorated money
LTBE incentives
All offseason bonuses
All tenders
Dead money
Termination pay
Injury grievances & settlements
Injury protection (begins in 2016)
Copyright Jason Fitzgerald
11/23/2018

16. Components of a Contract
Paragraph 5
Paid for weekly in-season participation
Roster bonuses
Paid for being a member of a team on a certain date
Reporting Bonus
Paid for reporting to training camp
Workout Bonus
Paid for completing voluntary offseason workouts
Copyright Jason Fitzgerald
11/23/2018

17. Components of a Contract
Amounts treated as signing bonus
Prorated over lesser of life of contract or 5 years
Includes option bonus, salary advance, guaranteed offseason bonus
Incentives
LTBE- Counts towards salary cap
NLTBE- Does not count towards salary cap
Copyright Jason Fitzgerald
11/23/2018

18. Dead Money
Salary paid to a player whose contract is no longer active with team
Acceleration of prorated money
Salary paid to player prior to release or trade
Guaranteed salary owed to player after release
Copyright Jason Fitzgerald
11/23/2018

19. Termination Pay Salary paid to released veterans
Only available once in career
Balance of P5 if on roster in week 1
25% of unpaid P5 if signed after week 1
Copyright Jason Fitzgerald
11/23/2018

20. Injury Grievance Claim filed against team for improper release
40% of amount counts on cap
Settled thru arbitration or negotiation
Adjustment made to following year cap based on actual award
Copyright Jason Fitzgerald
11/23/2018

21. Injury Settlement
Compensation for injury suffered while under contract
Equal to weeks injury will keep player on sideline
Relieves team of injury grievance responsibility
Limits ability to re-sign with team
Must wait 6 weeks plus length of settlement
Copyright Jason Fitzgerald
11/23/2018

22. Injury Protection
Salary paid for injury that prevents play in year(s) following injury
Equals lesser of 50% of P5 salary or $1.05 million in first injury year
Limit grows by $50,000 every other year
Equals lesser of 30% of P5 salary or $500,000 in second injury year
Limit grows by $25,000 every 3 years
Only available once in career
Copyright Jason Fitzgerald
11/23/2018

23. What Doesn’t Count on Cap
Postseason Pay
Preseason Pay
Minimum Salary Benefit
Severance Pay
Performance Based Pay
Exempt players
Pension funding
Moving expenses
Copyright Jason Fitzgerald
11/23/2018

24. Questions or Comments? E-mail: Jason@overthecap.com
Website:
Twitter: jason_OTC
Facebook: overthecap fan page
Copyright Jason Fitzgerald
11/23/2018