NFL teams and players received unexpected good news on Friday. It was announced that the salary cap in 2024 will be $255.4 million. Initial projections from December suggested the 2024 salary cap would be between $240 million and $245 million. The league's press release states: “This year's unprecedented $30 million increase in the per-club salary cap is the result of the full repayment of all amounts advanced by clubs and deferred by players during the Covid pandemic, as well as an extraordinary Increase in media revenue for the 2024 season.”
The $30.6 million jump is 13.61% more than the 2023 salary cap of $224.8 million. The increase is slightly smaller than in 2022, when the salary cap increased 14.08%, after falling sharply in 2021 due to the pandemic.
Every team benefits from such a dramatic increase. Here are five possible consequences of the higher-than-expected salary cap.
The Cowboys are in a quandary with quarterback Dak Prescott. This is Prescott's contract year and he has leverage in contract negotiations despite a subpar performance in an early playoff exit to the Green Bay Packers as the NFC's No. 2 seed.
Prescott's $59.455 million is the NFL's second-highest salary cap hit in 2024, behind Browns quarterback Deshaun Watson's $63.977 million, while the Cowboys are currently $8.38 million over the salary cap at $255, according to NFLPA data. $4 million. He has a no-trade clause in his contract. Prescott also has a provision that prevents Dallas from naming him a franchise or interim player in 2025 should he let his contract expire.
A contract extension will almost certainly make Prescott the highest-paid player in the league. That award currently belongs to Bengals quarterback Joe Burrow. In early September, as the regular season began, he received a five-year, $275 million contract extension from the Cincinnati Bengals, an average of $55 million per year. Thanks to annual incentives of $1.25 million in the extension years (2025 to 2029), the deal is worth up to $281.25 million. Burrow has $219.01 million in salary guarantees, $146.51 million of which was fully guaranteed at signing.
Restructuring Prescott's contract is a more viable option thanks to the increased salary cap if negotiations quickly reach an impasse. Prescott is scheduled to make $34 million in 2024, consisting of an unsecured base salary of $29 million and a roster bonus of $5 million for the fifth day of the league year. Prescott's contract already runs through the 2025 and 2026 contract years and automatically expires next March on the last day of 2024. The automatic conversion rights in Prescott's contract allow the Cowboys to create up to $21.86 million in cap space by convert their salary into a contract bonus before the March 17 roster bonus date. Prescott's approval would be required to add the 2027 and/or 2028 void/dummy contract years. Dallas would have nearly $13.5 million in cap space if Prescott's 2024 salary, up to $1.21 million, were prorated through 2026 through a contract restructuring.
The downside is that the Cowboys would face $58.32 million in dead money in 2025, a salary cap hit for a player no longer on a team's roster if Prescott plays out his contract and the open market testing free agency in 2025. Prescott's departure this way would leave the Cowboys with, at best, a 2026 third-round compensatory pick.
The Super Bowl LVIII champions are making a point of re-signing All-Pro defensive tackle Chris Jones and cornerback L'Jarius Snead, both of whose contracts are expiring. One of the two is expected to be kept off the open market with a franchise tag.
Chiefs general manager Brett Veach and Jones' representatives are reportedly planning contract negotiations at the NFL Combine, which runs February 27-March 4. Jones and the Chiefs were unable to come to an agreement when negotiating a new deal last year. He was involved in the contract dispute that extended into the regular season. Changes were made to Jones' remaining 2023 contract year to end his 51-day layoff without a long-term contract before preparations began for Kansas City's second regular-season game against the Jacksonville Jaguars.
It would have been extremely difficult to franchise Jones if the salary cap had been set according to the original projections. Jones' franchise tag should be $32,169,912 as the 120% of last year's salary provisions work with the designation. That number would easily be the largest franchise tag for a non-quarterback in league history.
The Chiefs are within striking distance and have the cap space to accommodate a Jones franchise move should the teams remain far apart in these merger talks. Based on information from the NFLPA, the Chiefs have $19.83 million in cap space for 2024.
Obviously the contracts would have to be restructured. The most logical source of necessary cap space is quarterback Patrick Mahomes. At $58,608,269, he has the third-largest cap value of 2024. Up to $34.832 million in cap space can be made by converting $8.64 million of Mahomes' $9.85 million base salary 2024 and his roster bonus of $34.9 million from May 5 in a contract bonus. This would leave the Chiefs with nearly $22.5 million in cap space after a Jones franchise move.
The Saints have been the NFL's most aggressive and creative team in managing the salary cap, consistently taking a credit card approach in which current commitments become future ones. This year is no different. The Saints were expected to need to clear more than $80 million in cap space at the start of the 2024 league year on March 13 to stay within the cap.
With a salary cap hit of $255.4 million, there is less work for the Saints. The Saints have already begun the process of reining in the $67.5 million overrun as $23.032 million of cap space was gained by restructuring quarterback Derek Carr's contract. An $8.975 million salary conversion deal with center Erik McCoy created $7.18 million in cap space.
The Saints could be able to make a significant contribution through free agency with slightly fewer cap challenges. A decade ago, the Saints were unexpected bidders for the services of Jairus Byrd due to a tight salary cap. Nonetheless, he received the richest safety contract in NFL history coming to New Orleans.
Increased competition in free agency
The higher salary cap means more teams could seriously participate in the first wave of free agency. For example, the Las Vegas Raiders will need to address their quarterback situation in either free agency or the 2024 NFL Draft. Pursuing Kirk Cousins could become a priority if he doesn't sign a new deal with the Vikings before his 2024-2026 contract years expire when the 2023 league year ends March 13. Teams like the Chicago Bears, New England Patriots and Tennessee Titans and Washington Commanders would be well-positioned to make a splash in free agency regardless of where the salary cap is set.
Second- and third-tier free agents will likely need to be careful with contract demands. Typically, a buyer's market develops after the first few days of the free agent signing period as the second wave of free agents begins. It wouldn't be surprising if the market for such players is overestimated, considering there will be a significant trickle-down effect due to the salary cap increase.
Higher franchise tags
The cost of using a franchise tag increased due to the unexpected salary cap changes. Where the salary cap is set is important because franchise tags are calculated over a five-year period tied to a percentage of the total salary cap. More specifically, the number for each position is determined by dividing the sum of the average of the five highest salaries in the previous year for each of the previous five seasons by the sum of the actual NFL salary cap for the previous five seasons. The resulting percentage, called the cap percent average in the NFL collective bargaining agreement, is then multiplied by the actual salary cap for the upcoming league year.
Bears cornerback Jaylon Johnson is a prime candidate for a franchise title since he put himself in the shutdown cornerback discussion last season. His franchise number of $19.802 million is about $1 million above initial projections.
The more experienced brokers will use the average of two franchise tags as a guide to a long-term deal when warranted. This approach should give Johnson the ammunition he needs to replace Jaire Alexander as the NFL's highest-paid cornerback. The four-year extension Alexander signed with the Packers in 2022 averages $21 million per year.
A second franchise tag for Johnson in 2025 at a CBA-mandated 20% increase over his 2024 figure would be $23,762,400. With two consecutive franchise tags, he would earn just over $43.5 million. The average for Johnson franchising twice in a row is just over $21.75 million per year. If the original projections had come true, a contract between $20.5 million and $20.75 million could have been justified.