The cap is a hard limit, but the accounting has enough flexibility that teams rarely feel bound by a contract’s headline number. The central concept is proration.
Cap Hit Is Not Cash Paid
A signing bonus is paid up front but charged against the cap in equal parts across the life of the contract, up to five years. A player who signs a five-year deal with a $50 million signing bonus receives that money immediately, but the team carries $10 million a year against the cap.
This is why a player’s cap hit in a given season often looks nothing like what he is actually being paid that year.
The Restructure
A team short of space can convert a player’s base salary into a signing bonus, which spreads the charge across remaining years. The player gets the same money sooner; the team lowers this year’s hit and raises future ones.
It works, and it is common, but it borrows from the future. Repeated restructures are how teams end up with enormous charges for players in the final years of a deal.
Void Years
Teams sometimes add contract years they never intend to honor purely to spread proration further. When those years void, the remaining bonus money accelerates onto the cap immediately as dead money.
Releases and the June 1 Rule
| Timing | Effect |
|---|---|
| Release before June 1 | All remaining prorated bonus accelerates into the current year |
| Release after June 1 | Current year’s proration stays, the rest moves to next year |
| Post-June 1 designation | Lets a team release earlier but account for it as if after June 1, limited to two players per year |
The Top 51 Rule
In the offseason, only the 51 highest cap charges count. That lets teams carry a full 90-man roster without every contract counting. Once the regular season starts, all contracts count.
Related
What the salary cap is · Dead cap explained · The franchise tag
The Bottom Line
Signing bonuses prorate across up to five years, restructures push charges into the future, and releases accelerate what is left. Cap hit and cash paid are different numbers.