The NFL on Wednesday informed its teams that the per-team salary cap for 2025 would be between $277.5 million and $281.5 million, with the final figure to be determined following further negotiations with the NFL Players Association.
Regardless of where it lands in that range, the salary cap will rise significantly for the second year in a row.
Last year saw the largest cap increase of all time, as it rose from $224.8 million in 2023 to $255.4 million for the 2024 season. This year's increase means the cap will have increased by at least $53 million over the past two years.
The salary cap is calculated annually based on a collectively bargained formula tied to league revenues, which have increased in recent years because of new media rights deals. But the reason the number is not yet finalized is that the league and the NFLPA, as they do every year, are still working on adjustments to the number that formula determined.
Last year, for example, the formula dictated that the cap should have been $265.4 million, $10 million higher than it eventually was. But as the league explained in its Wednesday memo to teams, it was reduced because the two parties agreed to add $1 million to the performance-based pay pool and make a "smoothing adjustment" of $9 million.
The NFLPA agreed to the smoothing adjustment because it didn't want a situation where one year's cap increase was massive and the next year's significantly less so, disproportionally benefiting the players who were getting new deals in the big-increase year at the expense of players up for deals in future years.
The reason the cap figure is not yet finalized, the league's memo says, is because the NFLPA has yet to inform the league about how it wants to recoup that $9 million that was smoothed out of last year's cap. Per the 2024 agreement, the union has the right to recover up to $4.5 million of that $9 million deferral this year and the remainder next year. The league, therefore, is waiting to hear back from the NFLPA how much of that $4.5 million should be added to this year's cap, hence the range.
The NFLPA declined to comment for this report.
The league's memo to teams said it expects to conclude its negotiations with the NFLPA next week, at which time the cap number will be finalized. The new league year (and with it free agency) opens at 4 p.m. ET on March 12.
The memo also says, "Keep in mind that this range is subject to change based on further negotiations with the NFL Players Association."