How does the Rookie Salary Cap Really Work?

Salary Cap How does the Rookie Salary Cap Really Work?

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The NFL recently announced each team’s Rookie Salary Cap for this year.  The Rookie Salary Cap is often referred to as “a cap within a cap” because it limits the amount that teams can pay to their rookies.  The Ravens’ Rookie Cap number for this year has reportedly been set at $5.046M.  What this means is that the 2008 Cap numbers for all 10 of the Ravens’ draft picks and all bonus money paid to their undrafted free agents must be fit into that amount. 
 
However – and this is a very common misconception – that does not mean that the Ravens will need $5.046M in overall Salary Cap space to sign all of their rookies.  While it is a “cap within a cap”, it is not a dollar-for-dollar proposition.  The reason for this is that, at this time of year, the so-called “Rule of 51” applies. 
 
The Rule of 51 dictates that only the top 51 base salaries and all pro-rata shares of bonus money count toward the team’s overall Cap at this time of the year.  This rule is necessary because during the offseason, team rosters can number up to 80 players.  As such, it would be impossible for teams to fit all of those players under the Cap.  So, to counter this issue, the NFL has mandated that only the highest 51 base salaries and all bonus money applies from early March until the beginning of the season. 
 
This is where the Rookie Cap and the Rule of 51 become intertwined.  All rookies usually receive a 1st year base salary of the rookie minimum of $295K.  As such, those rookie minimum salaries generally do not count among the highest 51 base salaries.  Because of this, $2.95M ($295K x 10) of the Ravens Rookie Cap of $5.046M will not count against the team’s overall Cap figure, meaning the team will only need a little over $2M in overall Cap space to fit their rookies under the Cap. 
 
CAP UPDATE:  The Ravens are presently approximately $3.768M under the Cap.  Reportedly, the club plans to take the entire Cap hit from Steve McNair’s retirement this year.  If so, they will then lose $900K in Cap space when his retirement is processed (plus another $445M when he is replaced among the Top 51), leaving them with approximately $2.423M in remaining Cap space.  Assuming Jon Ogden retires and is processed after June 1, they will received an additional $2.5M in Cap space. 
 
Those amounts should be enough to carry the team through the season.  Once the season starts, all players on the team, including those on the Practice squad, Injured Reserve (IR), and PUP (Physically Unable to Perform), must fit under the Cap.  But, as far as the rookies go, if they make the team – most of them likely will – they will end up bumping a higher salaried guy off of the roster.  So, for each rookie that makes the team, additional Cap space will be created.

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Brian McFarland

About Brian McFarland

Known on Ravens Message Boards as "B-more Ravor", Brian is a life-long Baltimorean and an avid fan of the Ravens and all Baltimore sports.  A PSL holder since 1998, Brian has garnered a reputation as a cap-guru because of his strange (actually warped) desire to wade through the intricacies of the NFL's salary cap and actually make sense of it for those of us who view it as inviting as IRS Tax Code.      Brian, who hails from Catonsville, MD and still resides there, is married and has two children. More from Brian McFarland

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