The salary cap and free agency


Every year when the new salary cap is announced, many expect a bonanza for their favorite team with the extra cap space suddenly allowing their team to sign whatever free agents they want or to re-sign their own guys that may have been unaffordable. But free agency prices grow with the cap, meaning the new cap isn't really the free agency benefit that most think.


Below shows the growth of the cap alongside free agency pricess with free agents split apart into the top, middle, and bottom tier of signings. Note that all free agent tiers are indexed to start at the same point in 2015 with the salary cap to show the relative growth of each compared to the cap.


Definitions:


Tier 1: The top free agents whose AAV is 5% or more of the current salary cap, typically the top 20-30 free agents each year


Tier 2: The middle tier of free agents whose AAV is between 2.5% and 5% of the current salary cap, these are the next 45-60 free agents


Tier 3: The large number of the free agents whose AAV is below 2.5% of the current salary cap, most of who are signing for near minimum deals, this varies by year but utually 400-600 players are in this group