The big news across the NFL on Wednesday was the report that the league has informed teams that the 2025 salary cap should fall in the $277.5M to $281.5M range, which is higher than most had anticipated. As a result of this report, teams like the Seattle Seahawks, who had been predicted to be in the range of $13.5M over the cap won’t need to free up nearly as much space, while teams like the New England Patriots and Las Vegas Raiders will have somewhere in the neighborhood of $100M of to put to work, per OverTheCap.com.
However, the big question for many Seattle fans is what the increase means in terms of the size of contracts players will sign in free agency in a few weeks and what the impact will be on those players who are set to hit the market. The short answer is that those players who are set to be free agents are very likely to sign contracts which constitute outsized increases relative to the increase of the salary cap, and here are a couple of explanations behind the why of that fact.
The Simple Explanation
The most simple explanation is that when the cap increases, it doesn’t just increase for a single season, it increases for future seasons as well since in the three decades it has existed it has only decreased as a result of specific, outside factors. Thus, when the salary cap comes in $7M higher than anticipated in a single season, it means many teams look at that $7M increase as existing across the current season as well as future seasons, impacting multi-year contract negotiations.
Translating that to a real world example, many teams negotiating a three year contract would look at a cap increase that is $7M more than anticipated as a cumulative increase of $21M over the proposed contract window. So, say a team is negotiating the aforementioned hypothetical three year contract with a free agent linebacker and the team is offering $36M over three years and the player is asking for $45M over three years, the player’s agent is going to argue that the $9M difference between the two sides is more than covered by the unexpectedly large increase in the cap of $21M over the duration of the cap, meaning the team should step up its offer because the entirety of the difference would be covered by what is effectively free money the team hadn’t been anticipating.
There are, of course, plenty of holes that can be poked in that argument, but it only takes one GM to agree in order for the free agent linebacker to be signing the three-year, $45M contract.
The Longer Explanation
Taking a deeper dive into exactly why second contracts outpace salary cap growth requires breaking down the roster into its various components. At the most basic level, NFL rosters are comprised of the following types of player contracts:
Practice squad members
Players on injured reserve/physically unable to perform/nonfootball injury
Players on cost controlled contracts subject to the terms of team control as laid out in the CBA (rookie contracts, exclusive rights free agents and restricted free agents)
Dead cap (cap space allocated to players who are no longeron the roster)
Market rate contracts (extensions and free agent contracts)
To gain an understanding of the impact of these various types of contracts and how cap increases are disproportionately allocated to the last two groups, here is a breakdown of how the dollars work out for these groups based on the 2024 salary cap:
Practice squad members: $5M (includes all PS salaries, as well as money for elevations)
Injured reserve/PUP/NFI: $5M (this is a rough estimate that can be higher or lower in reality)
Players on cost controlled rookie contracts: $70M to $80M
Dead cap: $50M (2024 dead cap: Mean $48.2M/Median $51M)
Market rate contracts: Some or all of what is left
Putting all those components together, the first four categories combine to take up in the neighborhood of $130M to $140M. That means on a 2024 salary cap of $255.4M, there is somewhere in the neighborhood of $115M to $125M for most teams to spend on market rate contracts.
Now, applying these numbers to the 2025 cap:
Practice squad members: $5M
Injured reserve/PUP/NFI: $5M
Players on cost controlled rookie contracts: $75M to $85M
Dead cap: $55M
Market rate contracts: Some or all of what is left
Doing the same simple math as was performed on the 2024 cap, teams have approximately $140M to $150M allocated to the first four groups, leaving $129.5M to $139.5M for market rate contracts. Comparing that to the amount that was left for market rate contracts based on a 2024 salary cap of $255.4M, the increase just for this group of players falls into the $14.5M range.
Given that most teams will have around 40 to 45 players on cost controlled contracts, that leaves just 8 to 13 spots for players on market rate contracts. It obviously varies by team, but for the sake of keeping math simple in this example, 12 spots will be used. (Author’s Note: For those curious, the Seahawks currently have 13 players on market rate contracts and 47 players on cost-controlled contracts.)
Now, obviously, not all market rate contracts will expire each season, so in reality teams will typically only be looking to replace three or four players with market rate contracts. That means that the $14.5M or so of increased cap is most likely to get split among those three or four players signing with a team, which translates to an increase of $3.5M to $4.5M per year per contract. This means the increases for individual contracts far outpace the increases to the overall salary cap as a whole, as the majority of the cap increase gets funneled to a handful of players per team and just a few dozen players across the league rather than evenly distributed.
In short, the 9.4% increase in the salary cap from 2024 to 2025 likely means that when free agency starts in March that the increase in contracts for the highest paid players will likely increase by 15%-25% per year per contract, rather than the 9.4% many fans are likely to expect. In short, the contracts to which players agree early in free agency are, once again, likely to be mind blowingly large because of how cap increases disproportionately benefit players on market rate contracts.
And for a team like the Seahawks, all this means that negotiations with a soon to be free agent like Ernest Jones could wind up costing the team significantly more than they might have anticipated even just a few weeks ago. And that, of course, means that fans could watch yet another starting linebacker depart in free agency, just like they did in 2024. And in 2023. And in 2022. And in 2021.
