How the Rising Salary Cap Explains the NFL Playoffs

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The quickest way to win in the NFL is to have a good quarterback—and that’ll always be the case, unless there’s a drastic change made to the rules of the sport. Beyond finding the next Tom Brady or Aaron Rodgers, the second-best path to success is to spot the next trend and then adjust as quickly as possible. Teams that saw the era of offensive explosion coming due to rule changes won. Teams that drafted über-athletes using analytics win. Teams that noticed the middle of the field was wide open and that running backs could exploit modern defenses in space win. Teams that realized that college schemes could be used freely in the NFL now win, too.

The sport the NFL resembles most is not rugby or anything physical at all; it’s Formula One racing, the brand of car racing most popular outside of the Americas, in which teams like Mercedes and Ferrari dominate. That competition is defined by yearly rule and regulation changes (things as granular as reducing downforce—the downward thrust that gives a car more grip—by 30 percent) and how teams respond to those changes. The best teams throw their manpower at finding loopholes and ways to get an edge within the new sets of rules—and they usually find them within a few weeks of knowing what the changes are. The team with the best adjustment wins, and it usually wins for a few years.

The same is true in the NFL. If you know that the number of defensive pass interference calls and defensive holding calls will rise 129 percent over a seven-year period, as it just did, then it’s probably advisable to build an offense around that. There’s a reason that Bill Belichick—once dubbed a “habitual line-stepper” by a rival—has had so much success in this era: The lines define the sport.

One of the seismic changes to the sport over the past few years has been to the salary cap. In the past six years, the cap has exploded from $120 million to $167 million. In the past four seasons, it rose a minimum of $10 million a year. Meanwhile, after the 2011 collective bargaining agreement, rookie contracts became significantly cheaper, and opened up even more cap space. The competitive balance of the league is changing drastically because of it, and the market for players has become more complicated than ever before.

“It’s the biggest untold story in football,” said former Philadelphia Eagles and Cleveland Browns president Joe Banner. “With the excessive amount of available cap space, close to a billion dollars—some teams can’t mentally keep up with that.”

Incredibly, six of the top 10 2017 spenders in free agency, a period formerly reserved for desperate teams to throw money at anyone, made the playoffs: the Patriots, Titans, Rams, Vikings, Panthers, and Jaguars (who spent $20 million more than any other team).

Before the cap rose, the book on NFL free agency was that it was usually a bad idea. Sports Illustrated wrote just three years ago that some big-spending teams had learned that “shelling out cash to players who are nearing their 30s can end up backfiring in spectacular fashion.” That has changed—and quickly. All the room to spend has changed the way teams think about money. Multiple league executives, coaches, and experts told me that it is changing the way teams are built at an unprecedented pace and turned free agency from a last resort into a legitimate team-building strategy, like it has in other sports. Except, unlike the NBA, which had its massive cap spike two years ago to much fanfare, the NFL’s spike has been gradual. That means if you weren’t paying attention, you might not have noticed that the game changed.

“I can distinctly remember the days when it was almost every year, you had to let people go because of money,” Los Angeles Rams general manager Les Snead said. “Nowadays, I don’t ever remember thinking, ‘Uh-oh, we’re up against the books here.’ Now, it’s more of a strategy. ‘If we keep this guy, what does it keep us from doing?’ It’s not, ‘Hey, we’ve gotta do some things just to get legal.’ I think that’s what has allowed you to make, let’s call it ‘strategic football decisions.’”

One former general manager, who asked not to be named, told me that when he took over his team earlier this decade, he wanted to take a slower approach and build up cap space over time. The problem with the idea was that, unlike in previous eras, eventually everyone had cap space. This is the new reality; it helps explain all the new faces in the playoffs—and some of the old ones, too. The draft still matters, but for the first time, nailing free agency might be as important as acing your first-round pick.

The biggest change to the salary cap was its nearly $50 million rise in five years. The second-biggest change was a clause in the 2011 CBA that allowed teams to roll over unused cap space from year to year. This was to give teams more flexibility, while still ensuring that over a four-year period they’d spend 89 percent of the cap. It, in turn, created teams who were given mountains of cap space and would spend it very quickly. It is probably not a coincidence that the two teams specifically called out by NFLPA chief DeMaurice Smith in 2016 for spending far below the minimum threshold—the Raiders and Jaguars—became competitive soon after his comments. The Jaguars carried over $32 million on top of the normal salary cap in 2016. This offseason, the Jaguars signed defensive lineman Calais Campbell and cornerback A.J. Bouye—and matched them with 2016 free-agent defensive lineman Malik Jackson. Each of these players is worth over $15 million against the cap. Then, in October, when the team needed defensive line depth, it simply traded for Pro Bowl tackle Marcell Dareus, who signed a six-year, $96 million deal in Buffalo in 2015.

Despite all of the spending power across the league, superstars are still underpaid, and therefore so is everyone else. So as long as NFL contracts are not pegged to a percentage of the salary cap—something owners are probably not going to ever support—any good player usually becomes a bargain in relation to the cap, no matter how ludicrous the contract seems when it’s signed. According to Banner, stars don’t make as much as they should because when they’re that good, they typically don’t hit the open market and therefore take less to re-sign with their current teams. Then, everyone else is compared with those players and gets accordingly underpaid, too. So, when the Jaguars put together a collection of high-priced stars, they’re still getting great value for their money.

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It may sound simplistic, but the cap is rising at such a rate, and the carryover money is so great, that most teams can do anything they want within reason to their roster. “Any team who was bad with their salary cap in the past now has a get-out-of-jail-free card,” said Jason Fitzgerald, who runs Over the Cap, a salary cap website, and has consulted for NFL teams. Teams, Fitzgerald said, can use the excess cap money to easily get rid of mistakes they make in free agency and move on to other plans.

“You go back to the spending sprees in the old CBAs—the Jets were pretty much dead by 2011 and entered a two-year period where they couldn’t do anything,” he said. “Dallas would always have years like that. The teams that spend now, you don’t see that. That’s changed a lot about the sport and the smart teams are being proactive about it.”

This reality is slowly working its way through the league. Recently reassigned Packers general manager Ted Thompson notoriously stayed away from free agency, and something he used to be lauded for became a reason for criticism in recent years as the cap spiked. This week, the team’s new general manager, Brian Gutekunst, made a point to say the team would be active in free agency—and that excited the Packers’ staff.

Even though the rising cap has allowed mismanaged teams countless do-overs, it’s also allowed the rich to get richer. Like the Jaguars adding Dareus, teams can essentially throw any salary onto the pile. It is easier for a great team to just trade for a top player to fill a hole. When the cap was flat, teams were capped out easier.

“Look at the Patriots, adding one of the best deep threats in the league in Brandin Cooks,” said salary cap expert and former agent Joel Corry. “Teams are more likely to trade than ever before—the teams that trade the player can better absorb the signing bonus they’d eat on the cap and the teams that get the player can carry the money on the cap. You’re also getting younger general managers who are more inclined to take risks.” Corry also points to the fact that stars like Sheldon Richardson, who went from the Jets to the Seahawks, can be traded on cut-down day.

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Banner said the legacy of the Super Bowl 50–winning Broncos will not be just the great defense. It will be as one of the first teams of the modern era who spent big on outside players—Aqib Talib, Peyton Manning, DeMarcus Ware, and Emmanuel Sanders, among others—and won. The importance of draft picks will never go away—that team would’ve been nowhere without Von Miller—but the influx of cash was just as important. That, Banner said, is the path forward for NFL teams.

In addition to giving top-tier contenders the ability to add a missing piece and encouraging thrifty teams to spend, the rising cap has also made, as Corry said, “complete teardowns much easier.” Fitzgerald said that most teams now can pay so much to players that they can front-load contracts into two-year deals instead of three for the same amount of guaranteed money. That means teams can take more short-term risks, address holes, and have “very little salary cap pain.”

Howie Roseman is a good example, experts say, of a modern general manager: The Eagles are spending to the cap, but they have as complete a roster as there is in the NFL. “He’s one of these guys with a newer mind-set, more freewheeling,” Corry said. Banner points out that Roseman is smart enough to use his cap space to sign his current players to deals that work for both sides—maybe they seem like slight overpays now, but they will be a bargain compared to what would happen if they hit the open market and teams with $100 million to spend got to bid. Banner mentioned Fletcher Cox ($63 million guaranteed), Lane Johnson ($35 million guaranteed), and Zach Ertz ($21 million guaranteed) all as contracts that seem plenty substantial but are really team-friendly when compared to what those players are worth. Then they spend the rest of their cap space on talented outsiders like receiver Alshon Jeffery (who initially signed a one-year, $14 million deal and turned it into an extension worth $52 million). The Eagles are spending a lot, but few can argue with their spending decisions. They’re the NFC’s top seed and would have been the odds-on favorite to make or even win the Super Bowl if not for Carson Wentz’s December injury.

No team epitomizes modern team-building quite like the Jaguars. Bouye and Campbell are Defensive Player of the Year candidates, and along with homegrown talents like cornerback Jalen Ramsey and defensive lineman Yannick Ngakoue, they are arguably the league’s best defense, ranking second in takeaways, points against, and sacks. How suddenly can things change? In 2016, they were 30th in takeaways, 25th in points against, and tied for 19th in sacks. They are the perfect example of how to make a team work quickly with new pieces. The Jaguars would not be in this position without hitting on draft picks like Ramsey, but they also wouldn’t be here if not for the money they spent, either.

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Campbell said that he and Bouye are fast learners and that the coaching staff did a great job of defining the players’ roles early. Campbell often plays what is called a “big end” in the defense, a defensive end on the strong side of the offensive formation. It’s a role he says he’s never played before, but he says he’s comfortable there, as it allows him to use his arms and athleticism to disrupt plays from the edge. The results—14.5 sacks—make the signing an unqualified success; his $30 million guarantee is well worth it.

“Calais is a better athlete than I thought he was,” defensive coordinator Todd Wash said. Wash added that Jackson, a Super Bowl hero for the Broncos who signed for $42 million guaranteed last year, took slightly longer to acclimate to the Jaguars’ system. “He was more of a reader [in Denver], playing square to the line of scrimmage. Here we want him to get off the ball quicker and get some penetration, so it took a little bit more time for him to understand how we wanted him to play.” Jackson has roared through a successful 2017 with eight sacks and four forced fumbles. Wash said that the Jaguars were looking for certain skill sets with their acquisitions, and modern cap space meant they could go out and fill whatever holes they felt they had.

As with any structural change, there are of course unintended consequences, too. Fitzgerald said that because teams can roll over their cap money every year, teams like the 49ers or Browns will wait until they feel they can compete before they spend any substantial money. Before they do, they make for easy victories when they appear on another team’s schedule. The two franchises are now each projected to have well over $100 million in cap space this offseason. You can start the clock on them being competitive at some point. “You can call it hitting on free agents, or you can call it ‘a broken clock is right once a day’ because at some point, they are bound to hit,” Corry said. In the modern NFL, even the Browns have a chance.

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