NFL Announces the 2024 League Year Salary Cap
NFL Announces the 2024 League Year Salary Cap
Friday news dump and then some! Stay for the end for a fun podcast link.
Hey everyone, TC here,
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The National Football League loves Friday news cycles. Yesterday was another packed version. NFL Salary Cap news, first potential franchise tag, and a team looking to utilize the June 1 release designation. Let’s dig in.
NFL Salary Cap Announcement
Around midday, the news broke, courtesy of the NFL Network team, on the league announcement of setting the 2024 league year salary cap at $255,400,000.
The $255.4 million number exceeded expectations across the league including myself. For the past two months, offline, I’ve been told to expect a league cap number in the $242.5 to $245.5 million range.
Those numbers made sense to me as that would have represented the usual 7-8% increase. The league (usually) prefers to avoid single-year ballooning of the salary cap, preferring to go with a consistent gradual rise.
Teams and the Players' Association were still in the process of paying back the front cap money used to cover the 2021 league year. Based on Rapoport’s post, those paybacks have already been completed.
The 13.61% increase represents the fourth largest increase, by percentage, dating back to 1994. The $30.6 million raw number raise is the largest increase over the same period.
This huge increase represents the inclusion of the new revenue from media deals, along with the owners and players completing pandemic paybacks quickly.
For teams, this doesn’t change much in terms of salary cap management. Minor adjustments could be the result of the increased cap. A team may not need to complete a basic restructure with a specific player, or a veteran salary cap-related release may not be needed. Over the grand scope of salary cap management, things won’t change for the teams.
The one item this does change is the cash spending budget. The league cap increase means an increase in cash spending requirements both at the team level (90% over three years) and at the league level (95% of all 32 teams’ spending).
Another result of the increased salary cap is the coinciding raise for new contracts. The floor for some veteran contracts will increase from this announcement. The rookie wage scale could see a large jump for 2024 compared to the near-zero percentage increase seen in 2023.
For the Houston Texans, the league cap announcement moves us one step closer to an accurate team salary cap number. I am still awaiting confirmation of the league year annual adjustment as the last piece of the puzzle.
First Franchise Tag
Friday evening another round of news broke with a report that Cincinnati WR Tee Higgins was informed he would be receiving the franchise tag. To clarify, as of Saturday midday, no such official announcement has been made.
The team leaking the threat of a franchise tag this early gives me a few thoughts. Negotiations are not going well, and the team is sending the player a message through the media. The team could also be doing this as a smoke signal for trade offers for Higgins.
Higgins is likely (and should be) asking for $30 million on average per year on a contract extension. In reality, the top of the market, on APY, is Cooper Kupp at $26.7 million APY. The Tyreek Hill and Davante Adams contracts both contain unrealistic back-end money to fluff up the APY number. Higgins’ agent will try to bring the Hill and Adams contracts into the discussion.
Cooper’s contract value was 12.8% against the 2022 league-year salary cap of $208,200,000. APY as a percentage of the league salary cap. This is a measurement to capture salary cap inflation.
Higgins asking for $30 million APY would be valued at 11.7% against the 2024 league-year salary cap of $255,400,000. $30 million APY doesn’t look as big now does it?
Below are the official franchise and transition tag amounts for the 2024 league year.
Post June 1 Designation
Veteran defensive back, Xavien Howard, was informed by the Miami Dolphins that he would be released after the start of the league year. This report was confirmed by his agent, David Canter.
The report including the language of release after the new year indicates the “Post June 1” designation release will be utilized by Miami.
The “Post June 1” designation is a salary cap management tool, supported in the Collective Bargaining Agreement, which is often confused in the social media world.
Often you will see “X player could be released as a June 1 cut to save X amount of cap space”. The part that is not mentioned is the cap savings are not realized until June 2.
“Post June 1” releases will split the remaining dead money over two league years. Pro-rated money in the current year of the release will remain as dead money, and any future pro-rated will accelerate into the following year's league cap.
This application does not apply towards any guaranteed salary. Nor can a team designate a trade as a “Post June 1” trade.
Once released the player is free to sign with another team. The original team must carry that player’s salary cap charge through June 1st of the current year.
Closing
The NFL combine is inching closer. From a free agency perspective, a ton of unofficial business gets done in Indianapolis. Napkin contract negotiations in the dark corner of St. Elmo’s does indeed happen, even if the league office looks the other way.
I encourage you to track
newsletter during that week. Cody will be traveling to Indianapolis to provide us with feet on the ground coverage.Lastly, this week I was fortunate enough to be the first guest on the reformatted HouTopia Podcast with Sean Pendergast of Houston SportsRadio 610. Below you can watch the 30-minute show discussing the Houston Texans’ free agency.
Thanks,
-TC