In the next day or two, the NFL will announce that the Ravens have a $5,842,132 “Year One Rookie Allocation”. This is what is still commonly referred to as the team’s “Rookie Cap”.
This is an oft misunderstood number, because while it is part of the team’s Salary Cap, it does not have a dollar-for-dollar impact on the team’s overall Salary Cap.
The Rookie Salary Cap is often referred to as “a cap within a cap” because it limits the amount that teams can allocate to their rookies in the year they were drafted (and over the life of the rookies’ contracts).
The Rookie Cap is a “Cap within a Cap” because of the Rule of 51, which dictates that only the top 51 Cap numbers and all bonus proration and dead money count against the Cap from the beginning of the league year to the beginning of the regular season. So, when the Cap number of the draft pick falls within the top 51, it pushes the base salary of the former 51st Cap number off of the Cap (any bonus proration remains). And, when the Cap number of a draft pick does not fall within the top 51, only that player’s bonus proration counts against the Cap.
Presently, the Ravens’ bottom 5 Rule of 51 Cap numbers are:
So, while the team will need to fit all 9 of the draft picks into its $5, 842,132 Rookie Cap, the team will not need $5, 842,132 in overall Cap space to accommodate the signing of its draft picks.
This is because only the first four (4) picks will have a Cap number greater than $514,670, which is the team’s 48th highest Cap number. As such, only those four will be part of the top 51 and, under the Rule of 51, will replace the Cap numbers of the players who are currently 48th, 49th, 50th and 51st on the team’s Cap. Only the bonus prorations for the players who are removed will remain to count against the Salary Cap.
The Cap numbers of the remaining five (5) draft picks will fall outside of the top 51, so the base salaries of those players, while counting against the Rookie Cap, will not count against the team’s overall Salary Cap. Only the bonus prorations for those players will count.
So, to calculate the exact impact of the Rookie Cap on the team’s overall Cap, the amount of the base salaries – $420K – for each of the lower 5 draft picks ($2.1M) can be deducted from the overall number of $5,842,132. Then, for the top four draft picks, while their Cap numbers do count against the overall Cap (by virtue of being part of the top 51 Cap numbers), they replace the four players who were formerly part of the top 51, so the base salaries ($495K) of the four being removed ($1.98M) will be deducted from the team’s overall Cap.
When those two numbers ($2.1M and $1.98M) are deducted from the team’s Rookie Cap ($5,842,132), the true impact of the signing of the team’s rookies – $1,762,132 – is revealed.
So, that is how the Year One Rookie Allocation, a.k.a Rookie Salary Cap – the “cap within a cap” – actually works and demonstrates the actual impact of the Rookie Cap on the team’s overall Salary Cap and how it is materially less than most realize.