How the NFL Salary Cap has Evolved Over Time

Since the early 21st century, the NFL has generated so much revenue that it has become commonplace to implement salary caps. These are limitations on the amount of money teams can spend on player salaries and bonuses.

Throughout the last few decades in the NFL, the salary cap has gradually increased, and the cap maximum has gone up way higher than it was back in 1995 during its creation. In this article, we’ll explain how the NFL salary cap has evolved, including where it started, what percent the cap has increased to, and how this affects team spending in modern NFL seasons.

Introduction of salary caps to the NFL

The NFL’s salary cap was first introduced in the 1994 season with an already-high starting cap of $34.6 million. This cap (and floor) for each player is inherently determined by a league formula that multiplies the NFL-generated revenue by the set Collective Bargaining Agreement (CBA) percentage. To get the cap value, this number is subtracted from the projected player benefits and player costs for the season and then divided by the total number of teams in the NFL for that season. The salary cap is hard, meaning any team that exceeds its salary limit is subject to penalties up to $5 million each. The goal of this salary cap is to promote parity between teams and control the overall costs of the league, which if you think about it, makes complete sense.

NFL salary cap in the 2000s

By the start of the 2000s, the salary cap which was originally set at $34.6 million was now almost doubled, sitting at $62.17 million. Essentially, this means all the teams have a higher budget when it comes to negotiation costs for player salaries and benefits combined. Interestingly though, the owners of the CBA were planning on exiting in 2011, leaving the 2010 season to have no salary cap. The idea was that an uncapped year would influence a new agreement to be signed before the current one expired, which had never been done before in the NFL. While most teams adhered to their normal salary cap traditions, teams such as the Washington Commanders and Dallas Cowboys spent too much during that season and were docked in pay the following 2012 season.

NFL salary cap in the 2020s to now

Since 2010, the salary cap has never gone uncapped, and the overall maximum team salary continues to rise every year. Most of this monetary rise is due to the incredible increase in media revenue surrounding the NFL. By 2015, the original $34.6 million salary cap was now more than quadrupled at $143.28 million, and by 2020 it had already gone up another approximate $50 million plus an extra $40 million per team in player benefits (specifically for the 2020 season). Now, as of 2024, the maximum team salary cap is absurdly high, sitting at $255.4 million and expected to grow even higher due to the nature of football culture in America. This does, however, benefit the well-being of sports culture across the United States as well as directly affect each player’s compensation every year they continue to contribute to the NFL.