NFL Salary cap

The salary cap is defined as the maximum amount that a team may spend on player compensation (see above) in a given season, for all of its players combined. Unlike other leagues, for example the NBA (which permits certain exemptions) or Major League Baseball (which has a "soft cap" enforced by "luxury taxes"), the NFL has a "hard cap": an amount no team under any circumstances may exceed. The NFL also has a so-called "hard floor", a minimum payroll that each team is required to pay regardless of the circumstances.
The NFL salary cap is calculated by the current CBA to be 59.5% of the total projected league revenue for the upcoming year. This number, divided by the number of teams, determines an individual team's maximum salary cap. For 2008, this was approximately $116 million per team.^[38] For 2009, it increased to $127 million.^[39] As a result of the NFL owners opting out of the CBA two years early, the 2010 season had no salary cap or floor.^[33]
Teams and players often find creative ways to fit salaries under the salary cap. Early in the salary cap era, "signing bonuses" were used to give players a large chunk of money up front, and thus not count in the salary for the bulk of the contract. This led to a rule whereby all signing bonus are pro-rated equally for each year of the contract. Thus if a player receives a $10 million signing bonus for a five-year contract, $2 million per year would count against the salary cap for the life of the contract, even though the full $10 million was paid up front during the first year of the contract.^[36]
Player contracts tend to be "back-loaded". This means that the contract is not divided equally among the time period it covers. Instead, the player earns progressively more and more each year. For instance, a player signing a four-year deal worth $10 million may get paid $1 million the first year, $2 million the second year, $3 million the third year, and $4 million the fourth year. If a team cuts this player after the first year, the final three years do not count against the cap. Any signing bonus, however, ceases to be pro-rated, and the entire balance of the bonus counts against the cap in the upcoming season.^[36]