Salary Cap Terminology
Base salary is the compensation a player receives, and is the “game check”. An NFL player receives 1/17th of their base salary on each football game day. Base salary has lessened in importance over the years in terms of significance to an NFL team’s salary cap.
NFL Teams have dramatically increased their willingness to renegotiate contract base salaries into other categories to create flexibility in their payroll.
Bonuses can take the shape of many things. Most fans recognize signing bonuses -which are payments made to players within the first 18 months of signing on with a team. This amount is oftentimes prorated over the entire life of the contract. Bonuses can include such events as working out, reporting, being on roster, playing on game day, and many other forms.
Since some compensation can be paid out up front and charged off over the life of a contract, teams often exercise this option to lessen the current year salary cap hit to afford signing other players.
Incentives are a third category for player compensation. They are categorized as either Likely To Be Earned (LTBE) or Not Likely To Be Earned (NLTBE). LTBE’s count against the current year salary cap, while NLTBE’s do not.
Unearned LTBE’s are credited against the salary cap of the following year, and earned NLTBE’s are recorded against the salary cap of the following year.
Guaranteed dollars is the term which describes the dollars which do not come off the books if the player contract is terminated. In normal language, this is the actual paid out value of the contract, regardless of the circumstances.
And finally dead money is the term used to define monies already paid or earned which have not been charged against any previous salary caps. This is the residual monies often associated with signing bonuses or incentives. Dead money is a hit to the current year salary cap with no benefit of the associated player on the roster.