NFL salary cap projections 2023
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Build a bridge to 2023 and beyond. Show That’s been the 49ers’ obvious financial strategy, especially since last March. It’s been a year since the NFL signed new media deals worth over $100 billion. Those are set to take effect in 2023, and since the size of the salary cap is directly tied to league revenues, teams’ amount of available spending money is expected to spike. And that’s essential context behind the monetary machinations that the 49ers made just prior to Wednesday’s opening of the new league year. To work their way under the 2022 salary cap ahead of the 1 p.m. PT deadline while still carrying quarterback Jimmy Garoppolo’s $26.95 million bill on the books, the 49ers deferred a large load of cap payments to the future. They restructured contracts of defensive lineman Arik Armstead, tight end George Kittle and edge rusher Dee Ford. Those three maneuvers freed up a combined $23.8 million of 2022 salary-cap space, enough for the 49ers to retain Garoppolo for the time being and have $9.1 million left over to make signings in unrestricted free agency. The team must finalize deals for cornerback Charvarius Ward, linebacker Oren Burks, defensive tackle Hassan Ridgeway and other potential additions, as there are still numerous vacancies on the depth chart. Restructures bring questions, and understandably so. Transferring payments to future years has become commonplace in the NFL and the Super Bowl champion Rams have had great recent success moving around cap space. But it does have potential to burn teams. It’s happened to the 49ers before, forming the essence of “cap hell” that the franchise entered in the late 1990s that essentially spelled the sunset of its dynastic years. So, a quarter-century after former general manager Carmen Policy literally pulled players off the practice field to restructure deals and duck under the salary cap, are the 49ers again mortgaging their future by freeing up so much short-term space? It doesn’t appear so, and a look at projected NFL cap increases — thanks to those new media deals — explains why. First, let’s look at how exactly the 49ers have shuffled money over the past two days. Arik Armstead's restructure
Armstead’s restructure was the biggest short-term money saver. His previous 2022 salary-cap hit was $20 million, and it’s been reduced (see the box shaded in grey above) to $9.6 million. Chief negotiator Paraag Marathe accomplished this by combining two mechanisms. He converted $13.1 million of Armstead’s 2022 base salary — the maximum permissible amount, since the veteran minimum base salary for a player with seven years of service time is $1.12 million — into a signing bonus. NFL rules dictate that signing bonuses are amortized over a contract’s remaining remaining years (that’s the PRTD SB column), so the 49ers spread the cap impact of Armstead’s base salary into the future. Additionally, as indicated by the orange shading, Marathe tacked two void years onto Armstead’s deal. Think of an accordion: these void years stretch the cap impact of Armstead’s new signing bonus out over five years so that the future impact is only an additional $2.6 million annually. That’s the price of $10.4 million in immediate 2022 savings. George Kittle's restructure
Kittle’s previous cap hit was about $16 million. The 49ers have reduced it to the $7.7 million shaded in grey. Marathe employed a similar mechanism here, as $10.4 million of Kittle’s 2022 base salary is now a signing bonus. (Kittle has less accrued time than Armstead, so the veteran minimum salary for him is slightly lower — $1.035 million.) Kittle’s new bonus, for cap purposes, has been amortized over the maximum permissible time frame, five years. The 49ers added one void year in 2026 to fully stretch the accordion out to that length. Kittle’s additional future cap impact — or the price of opening up $8.3 million in 2022 — is only an additional $2.1 million annually. In Ford’s restructure, the 49ers slashed the edge rusher’s non-guaranteed base salary from $2.4 million to the $1.12 million veteran minimum (this was a pay cut). Marathe then converted Ford’s guaranteed $4.6 million roster bonus for 2022 — a remnant of a 2019 injury guarantee that’s survived several restructures — into a signing bonus. In one more accordion-stretching exercise, the 49ers then added three additional void years onto Ford’s deal (one already existed in 2023). So in totality, Marathe cut $5 million off Ford’s 2022 cap bill while adding future annual charges of only $920,000. Now, void years only help stretch cap damage out as long as a player is under contract. Once Armstead, Kittle and Ford reach the void years of their deals, all money that hasn’t yet hit the cap will accelerate onto the 49ers’ books. This reality, of course, projects to create sizable hits against the team’s salary-cap situation. But that’s where building a bridge to 2023 and beyond comes in. The 49ers are clearly confident that the cap’s growth will outpace their deferred spending. Are they correct in their gamble? While it’s impossible to know exactly how much the salary cap will increase in future years since it’s directly tied to revenue figures that have not yet been generated, Over The Cap’s Jason Fitzgerald used history as a guide to make future projections. The salary cap, which was $198.2 million in 2020 before the pandemic’s impact on revenue led to 2021’s severe reduction to $182.5 million, began a dramatic recovery this year. It’s set at $208.2 million for 2022. Based on that upward trajectory, the cap is expected to approach pre-pandemic expectations — perhaps $220 million to $225 million — by 2023. From there, the media deals will kick in, and Fitzgerald used previous NFL revenue data — the prior media deals went into effect in 2014 — to make his projections. Prior to 2014, the league’s revenue had been growing about 4 percent annually. When the new deals took hold, that growth shot up to 11.4 percent and remained generally robust until the pandemic. Fitzgerald projected that a similar trend will repeat itself starting next year. At over $100 billion in combined value, in fact, these new media deals will likely lead to even larger revenue upticks than last time. Even though Fitzgerald was conservative in his estimates — he charted a potential 12 percent increase in 2023 revenue, followed by 7 percent increases in subsequent years — the projected future cap numbers were still staggering. By 2024, Fitzgerald expects a salary cap in the range of $260 million. By 2027, he expects it to reach $300 million. That’d translate into average annual increases of roughly $17 million annually, far outpacing pre-pandemic salary-cap growth, which averaged $10 million per year. From here, the math is simple. There’s an expected $7 million annual increase in cap growth coming. Compare that to the additional future annual costs of the recent restructures for Armstead, Kittle and Ford: $2.6 million (Armstead) + $2.1 million (Kittle) + $920,000 (Ford) = $5.6 million. Of course, reality is a bit more complicated than that. Ford’s contract voids in 2023, so his prorated cap hits are set to accelerate sooner rather than later. But the overarching point stands. The salary cap, in all likelihood, is about to experience massive inflation. Because of that, as this respondent effectively summarized, 2022 cap dollars are worth more than cap dollars in 2023 and beyond are projected to be. The 49ers, where it’s possible, would rather save those more valuable dollars now and spend later. And they can, because restructuring deals has never been a safer bet. It’s not the late 1990s anymore. Heck, 2020 is also in the rearview mirror. The new media deals roughly double the value of the previous ones. Money is set to flow into the league profusely. That allows the 49ers — who are operating like a quarterback, buying time in a chaotic pocket so that they can earn more option power with Garoppolo for a potential trade — the luxury of flexibility. They used it with their restructures of Armstead, Kittle and Ford, and now they’re cap-compliant and ready to attack this new league year. Perhaps most importantly, they’re still confident in their long-term sustainability. (Photo: Lachlan Cunningham / Getty Images) What will be the NFL salary cap in 2023?NFL Team Salary Cap Tracker. Who will have the most cap space in 2023 NFL?The Chicago Bears are No. 1 with an astounding $110.8 million of projected room under the cap.
What will the cap be in 2023?This article has been updated.
What will the NFL salary cap be in 2024?We're using a projected salary cap of $225 million in 2023 and $256 million in 2024, as seen on OverTheCap.com.
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