By way of example, let’s say Player X signs a 5-year, $40M contract that contains a Signing bonus of $10M, an Option Bonus of $4M, payable in year 2 and a Roster Bonus of $1M also payable in year 2. The contract includes base salaries (P5) of $1M, $3M, $6M, $7M and $8M over the course of the 5 years.
The Signing Bonus of $10M will be prorated over the 5 years of the contract and will count $2M against the Salary Cap in each year of the Contract.
The 2nd year Option Bonus will be prorated over the 4 remaining years of the contract and will count $1M in each of those years.
The 3rd year Roster Bonus will count 100% in the 2nd year, assuming the player is still on the team’s roster in year 2 (Roster Bonuses are most often payable if the player is on the team’s roster on the 5th day of the league year).
So, the player’s Cap numbers would be as follows:
|Year||Signing Bonus Proration||Option Bonus Proration||Roster Bonus||Base Salary||Cap Number|
This example does not include any Incentives. The Salary Cap implications of Incentives are explained below.