Breaking Down the NFL Salary Cap: How Teams Can Manage Money in 2025

Understanding the NFL Salary Cap:

The NFL salary cap is the backbone of roster construction, forcing teams to make tough financial decisions while staying competitive. It ensures parity by setting a spending limit on player salaries, preventing the wealthiest franchises from simply outbidding the competition. This system ensures a balanced league and that every team has a fair chance at building a championship caliber roster regardless of market size.

For 2025, the cap is set at $279.2 million per team. A record high that gives teams more flexibility, but it also raises contract values across the board. As players and agents negotiate higher deals with more money available, cap management becomes even more crucial.

However, managing the salary cap isn’t as simple as staying under the spending limit. A team’s cap space is the difference between the salary cap and what they’ve already committed to player salaries. This includes:

• Active Contracts: Money allocated to players currently on the roster.

• Dead Money: Financial penalties for releasing or trading players whose contracts still carry guaranteed money.

• Pending Transactions: Future signings, including draft picks, practice squad players, and potential midseason acquisitions.

While the raw cap number tells part of the story, smart front offices focus on effective cap space. The money they can realistically spend while preparing for future obligations. This means factoring in upcoming rookie deals, signing players to low-cost “prove-it” contracts, and structuring deals with future financial flexibility in mind.

Mastering the salary cap is a balancing act. Some teams go all-in for a championship, backloading contracts and restructuring deals to maximize short-term spending while others take a more conservative approach, prioritizing sustainable success. Either way, every move matters, and understanding how cap space works is key to following the business side of the NFL.

Figure 1 Source: Front Office Sports

2025 Cap Situation: Who’s Thriving and Who’s Struggling?

Teams with the Most Cap Space:

• New England Patriots (­­$129.8M): With the most cap space in the league, the Patriots have the flexibility to make bold moves in free agency or swing major trades to reshape their roster.

• Las Vegas Raiders (­$96.6M): The Raiders are in a strong financial position to reinforce their roster by re-signing key players or making splashy acquisitions.

• Washington Commanders (­$83.7M): With ample cap space and a relatively young roster, the Commanders can be aggressive in free agency and lock in foundational pieces for the future.

Teams in Cap Trouble:

• New Orleans Saints ($47.5M over the cap): The Saints are once again deep in the red and will need to restructure contracts or part ways with veterans to stay compliant.

• Cleveland Browns ($22.8M over the cap): The Browns face tough calls on high-priced contracts and must find ways to create breathing room.

• Kansas City Chiefs ($17.6M over the cap): With their championship window still open, the Chiefs need to navigate cap space carefully while keeping their core intact.

Figure 2 Source: Over the Cap

How Teams Create Cap Flexibility:

To stay competitive, teams use creative financial strategies to maximize cap space. Here’s how they do it:

1. Restructuring Contracts:

Teams convert base salaries into signing bonuses, spreading out cap hits over multiple seasons.

• Example: The Dallas Cowboys could restructure Dak Prescott’s contract, lowering his 2025 cap hit while keeping cap space available for roster moves.

• Example: The Kansas City Chiefs might do the same with Travis Kelce, giving them flexibility to reinforce their defense.

2. Cutting or Trading Expensive Veterans:

Sometimes, parting ways with high-cost veterans is necessary to free up space.

• Example: The Philadelphia Eagles released Darius Slay, freeing up about $4.3 million towards their cap space.

• Example: The San Francisco 49ers already moved Deebo Samuel, adjusting their cap situation to allocate resources elsewhere in the future. However, they took a $31 million hit in dead money cap, reducing their cap space this year to about $34 million.

3. Extending Key Players:

Locking in young stars to long-term deals can help lower their cap hit while securing the future.

• Example: The Baltimore Ravens could extend Kyle Hamilton, ensuring their defensive leader stays put while managing future cap impacts.

• Example: The Detroit Lions might secure Aidan Hutchinson early, keeping their defensive cornerstone at a cap-friendly rate.

4. Structuring Free Agency Deals Smartly:

Teams with space must be strategic with how they structure new contracts, either front-loading (paying earlier) or backloading (pushing costs to later years).

• Example: The New England Patriots, with their massive cap room, could sign top free agents while maintaining financial flexibility for future years. They could do this by signing a player and front-loading their contract, so they will have the flexibility to pay their young cornerstone when their rookie contract is up.

• Example: The Las Vegas Raiders could also use creative structuring to land a big-name player without jeopardizing future cap health. The Raiders also have flexibility to sign big name players. I could see them making a strong push for QB Sam Darnold or trying to draft Shedeur Sanders. However, if that does not happen, I could also see them entering this year as a rebuild year, and I would not be surprised if they trade away a big-name player for draft picks and keep their cap capital and spend it next year.

The Bottom Line: Cap Strategy Defines Success:

Having cap space is one thing, but using it wisely is another. The best teams don’t just spend, they strategize. They know when to extend, when to restructure, and when to cut ties. Smart cap management is what separates contenders from teams stuck in mediocrity. In 2025, expect a wave of restructures, trades, and calculated signings as teams maneuver the cap to stay competitive.