Minor cap increase can result in major spending

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This year’s version of the crop report has not yet been disclosed, in part because it still hasn’t been determined.  But the indications are that the salary cap will increase more than expected.

As mentioned on Tuesday, a source with knowledge of the situation tells PFT that the cap will be at least $122 million.  Which means it will be at least $1 million more than widely reported and believed.

So what’s the difference between $121 million and $122 million?  Glad you asked.  (Even if you didn’t.)

Apart from the obvious “32 teams times $1 million” calculation, increasing the cap by $1 million easily becomes a $5 million expenditure for a team.  Since signing bonuses and other guaranteed payments are prorated, and because the salary cap never goes down, an extra million in cap space easily becomes another $5 million in current-year spending.

Which under the obvious “32 teams times $5 million” calculation becomes $160 million dollars.

So that’s why the cap being even only $1 million more than expected is a big deal.  And there’s a chance it could be even more than $1 million more than expected.