If you are interested in the cap, there is no better resource than Jason Fitzgerald at OverTheCap.com. He has a recent podcast here where he talks about the 2024 cap and goes into a lot more detail.
I posted some quick thoughts last week on what a much-higher-than-expected 2024 salary cap probably means but wanted to dive deeper here.
A lot saw it as an opportunity for the Eagles (or any team) to be more aggressive and grab favorite fan targets like Patrick Queen or Brian Burns that may have been out of reach. But will it?
Not quite.
Salary cap history and how teams react to changes
This year’s cap explosion is an anomaly, not a trend
With the cap increasing around 6.5% annually for years, the past 3 years coming out of Covid have been an anomaly, averaging 10.8% increases and this year hitting 13.6%.
But don’t expect these large increases to continue. Some of this is a return to the natural trend after the 2021 Covid season saw an 8% cap drop. If you just modeled a constant 6.5% cap increase since 2016, you would be at $257M in 2024, almost exactly the actual $255.4M cap number that surprised everybody.
Covid distorted the cap because of temporary revenue drops but also because the players and league agreed to defer player benefit costs in 2021. These benefits then needed to be paid back (and subtracted from the cap calculations). With those benefits now fully repaid, there is no extra drag on the 2024 cap, allowing it to bounce.
Some of the new media deals (Amazon, Paramount, and splitting residential and commercial streaming rights) likely push the expected cap run rate up from the recent trend, but expectations are the cap will fall back into a steady 7-8% growth range, not continuing at near 11%.
Why’s this important? Because while the cap ballooned in 2024, teams won’t be expecting this trend to continue which will impact their plans on multi-year deals.
How teams spend when the cap changes
When the cap goes up, all player costs go up as well. The rookie wage scale and franchise tag amounts all move with the cap. And free agent contracts get bid up by teams.
Individual teams approaches to the cap vary, but there are several general takeaways on how the league reacts to changes in the cap.
Free agency contract values largely follow the cap
This is why excitement over this year’s cap increase is overblown – free agent prices are going to go up as well.
Below shows the annual percentage change of the salary cap (blue line) vs. free agency average annual values, or AAV (orange line).
In 2021 when Covid dropped the cap by 8%, the average free agent contract fell 14.9%. And when the cap bounced back 14% in 2022, the average free agent contract exploded up 27%. This put free agent values right back on it’s original trajectory, making up for the 2021 loss.
But increases are greater for QBs, premium positions, and tier 2 free agents
All free agents don’t go up equally – if you look back at the past decade you see:
- Overall, free agent prices go up along with the overall cap
- The top end of the free agent is skewed by recent QB signings and in particular, only two (Jimmy Garopollo and Derek Carr) but generally is slightly below the cap growth rate
- Premium positions and the 2nd tier of free agency is where teams aggressively spend extra cap money – this is the one segment where increases are higher than the overall cap rate
Below shows how free agent prices by tier have grown vs. the cap over the past decade.
| Annual % Change (all FAs) | Annual % Change (ex QBs) | Annual % Change (premium positions only) | |
|---|---|---|---|
| Salary Cap | 5.4% | 5.4% | 5.4% |
| Tier 1 Free Agents AAV (> 5% of cap) | 5.5% | 4.7% | 5.1% |
| Tier 2 Free Agents AAV (2.5%-5.0% of cap) | 4.7% | 5.0% | 6.2% |
| Tier 3 Free Agents AAV (< 2.5% of cap) | 4.6% | 4.4% | 4.4% |
Click for more detail on the above free agent tiers
The tiers of free agents are defined based on the percent of cap they are signed for on an annual average basis. I’m using a percent of cap instead of straight dollar amount to account for the growth of free agent prices
Tier 1: Greater than 5% of the cap
Every year, there are between 20-25 free agents signed in this top tier and this tier is dominated by premium positions, making up 75% of signings at the top end. For context, in 2023 these Tier 1 free agents would have been $11M+ AAV contracts and included Derek Carr, Jimmy Garopolo, and Javon Hargave at the top and ending with James Bradberry, David Onyemata, and Kaleb McGary.
Tier 2: Between 2.5% and 5.0% of the cap
The second tier typically numbers around 50 free agents each year. In 2023 this tier signed for between $5.5-$11.0M AAV and included players like Cameron Sutton and Allen Lazard at the top of tier 2 all the way to David Montgomery and Julian Love at the bottom. Several notable Eagles were in this tier including Fletcher Cox, Marcus Epps, CJGJ, and Andre Dillard.
Tier 3: Less than 2.5% of the cap
The bulk of free agency, usually numbering 350-500 signings a year and primarily 1-year deals (84% of signings) that are low-cost, roster-filling moves. As a comparison, tier 1 averages 3.4 year contracts and and tier 2 averages 2.5 year contracts.
Below are the free agent tiers over time which better shows the above trends. Each free agent tier is indexed to the same starting point in 2016 so you can see their relative growth vs. the salary cap. First, you see how free agent prices follow the cap and second, you can see where tier 2 has consistently grown fastest, only passed in 2023 by the top-end which was driven by the QBs.
Teams have been spending extra cap space on extensions, not franchise tags
I’ve seen several say they expect the use of franchise tags to increase because of the extra 2024 cap space but we’ve seen the exact opposite – with the post-Covid cap boom, the use of franchise tags has shrunk, dropping 28% in 2022 and another 19% in 2023.
And this makes sense – remember that franchise tag values are an average of the top five players at a position but are adjusted as a percentage of this year’s cap. CB tags in 2024 are up 9%, WRs are up 10.5%, and pass rushers are up 14.7%… these tag values are likely going up more than open market free agent contracts so teams need to have a good reason to tag a player.
While not using tags, teams have used extra cap aggressively on extending their own players. After averaging just under $27M of extensions annually prior to Covid with annual growth of less then 5%, the cap growth drove extensions dramatically higher as teams prioritized keeping their own guys.
In 2022, extensions averaged $47M per team, up 73% from 2021, and while they shrunk a bit in 2022, extensions averaged over $41M per team, still 50% higher than pre-Covid extension amounts.
And player releases drop when the cap increases
The final thing teams can do is release players. And not surprisingly, player releases generally drop when the cap increases.
As the cap shrank in 2021, teams were forced to release more players as they tried to get under the cap. And as the cap has grown post-Covid, teams have felt less pressure to release players, hitting their lowest levels in the past decade.
What to expect in 2024
Teams are figuring out what the extra cap means and how they plan to use it. Howie Roseman unsurprisingly doesn’t view it as a windfall:
It’s like if you win $5, it’s still your $5, you don’t want to just throw that $5 out and pretend like it’s not yours… We’ve got to make sure we’re still making good decisions with it because, at the end of the day, as we go forward, we do have a lot of guys making a lot of money.”
The Athletic “What will Howie Roseman do with $30M cap increase”
Bills GM Brandon Beane said he was bracing for a lower cap but sees it giving some breathing room: “Maybe it’s one less guy you’ve got to release or restructure… [but] You don’t want to just credit card everyone and just pile it up.”
Here’s what I think we should expect:
Fewer cap casualties as the teams in cap hell get some relief
The teams in the worst cap situation entering 2024 – the Bills, Saints, Dolphins, Chargers, and even the Cowboys – get immediate relief and you can expect fewer cap casualties or restructures that teams would rather not do (which is where the Saints have been living).
For the Eagles, I think the opposite is true here though – I think it is more likely that James Bradberry is traded or released due to the cap space. I’ve written a lot on this, but two things: First, he is unlikely to be one of the top 6 or 7 CBs on the depth chart and second, the Eagles are in much worse cap shape for 2025 and 2026 than they are for 2024 – JBJ gives them a chance to clean up 2025 which they will need.
Another year of record extensions and teams trying to get ahead of each other, especially at receiver
We’ve seen teams have used extra cap space aggressively for extensions. This will continue not only because of the cap increase, but because there are a lot of elite players entering extension territory and teams are going to want to get out of ahead of other teams pushing these numbers up. Just look at this list, especially at receiver:
- WR: CeeDee Lamb, Justin Jefferson, Amon-Ra St. Brown, Ja’Marr Chase, Jaylen Waddle, Brandon Aiyuk, Nico Collins, and DeVonta Smith
- OT: Penei Sewell, Tristan Wirfs
- EDGE Micah Parsons, Jaelen Phillips
- CB: Patrick Surtain II, AJ Terrell
Teams should absolutely get ahead of others setting the market at receiver. And this is why I think the Eagles should prioritize a DeVonta extension above anything else this off-season.
Wide receivers, defensive tackles, and pass rushers are going to get bid up
The premium positions always get paid, but these three positions stand out this year, but for different reasons:
Pass rushers: The top end of Josh Allen and Brian Burns likely get tagged and with extra cap space, their teams probably push harder to sign guys like Danielle Hunter and Jonathan Greenard. Which leaves a lot of tier 2 free agents in a league where almost every team needs pass rushers.
Bryce Huff could end up the top end and his expected $16M AAV will go up… Eagles favorite Andrew Van Ginkel, a great tier 2 option, will likely be well above his projected $6.5M AAV… and even expected 1-year guys like Za’Darius Smith are likely going to bid up as competing teams seem them as worthwhile uses of the extra space.
Wide receivers: Unlike pass rusher, it’s really not a good receiver class but that never stops the NFL. Remember 2022 when the cap first ballooned and the Jaguars were intent on getting Trevor some weapons? They broke the receiver market giving Christian Kirk and Zay Jones a combined $97M in free agency.
Don’t expect the gaudy top-end deals because the top free agents are likely going to get tagged or signed. And this receiver draft class is going to direct a lot of teams there instead of free agency. But the next tier of guys like Calvin Ridley, Marquise Brown, Gabe Davis, and Darnell Mooney are still going to get paid more than they warrant, especially as extensions start re-setting the market.
Defensive tackles: Long considered not a premium position, it really is now. No other position’s free agency costs have increased more over the past decade and at the top end, it is behind only QB, OT, and WR over the past two years. And this free agent class has some talent – Chris Jones, Justin Madubuike, Christian Wilkins, Leonard Williams, and DJ Reader. Philly fans have complained when Fletch was given $10M deals the past couple of years – watch what $10M gets you in the DT market this year.
And lastly, don’t expect the Eagles to make a splash in the top end
Hopefully the above shows you there isn’t going to be a windfall for the Eagles this year with “extra money to spend”. They are surely going to extend DeVonta and probably Landon.
I’ll dive into this more later, but the couple of things to remember about Howie are:
- He has never played at the top end of free agency and rightly sees the value in the mid-tier of free agency.
- When he has given out bigger contracts, it has always been at premium positions – if anything happens, expect it to be on the defensive line this year which is where need matches his preference.
- He will not force a draft pick to address a need – for everybody thinking we “must” draft a LB or SAF, he is going to have solutions, and likely mid-tier options, at those positions.
With Fangio coming in, I do think Howie likely bends his historical frugality, likely at safety where a guy like Xavier McKinney could make sense – he’s versatile and can move into the slot and man coverage. Safety is one position where the free agent market has continued to be weak and while McKinney isn’t going to be a “deal”, he would be the one mid-tier deal that could interest Philly.