Player X signs a 5 year deal with a $25m signing bonus, which is paid at signing.
For CAP purposes it's accounted for at $5m per year.
The team cuts the player after 3 years leaving $10m unaccounted for under the CAP.
The team is required to account for the outstanding CAP charge in the league year player X is cut.
So they take a $10m CAP hit (dead money), which means you have $10m less to spend under the CAP in that year.
This amount against the CAP disappears after that League year.
Their are options to split these amounts due, but, it freezes the amount you can spend before June 1 and this is why it's less used.
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OVER THE CAP
NFL SALARY CAP, CONTRACTS, SALARIES, BONUSES AND ANALYSIS
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Salary Cap Space
Calculations:
Cap Space = (Team Salary Cap) – (Active Cap Spending) – (Dead Money)
Team Salary Cap = (Base Salary Cap) + (Carryover) +/- (Adjustments)
Base Salary Cap: $188,200,000
Team Cap
Space Effective Cap
Space Active
Cap Spending Dead
Money
Colts $76,966,694 $76,966,694 $159,278,729 $1,224,490
Texans $45,980,111 $45,980,111 $163,003,388 $1,769,452
49ers $39,142,537 $39,142,537 $179,138,521 $12,938,175
Browns $35,178,921 $35,178,921 $191,957,752 $18,874,098
Raiders $33,409,805 $33,409,805 $154,471,745 $5,047,423
Bills $33,244,174 $33,244,174 $158,126,803 $7,564,040
Jets $31,988,378 $31,988,378 $164,709,027 $4,694,623
Bengals $28,994,696 $28,994,696 $162,901,507 $3,979,366
Dolphins $28,906,098 $28,906,098 $129,759,175 $36,417,421
Lions $28,835,164 $28,835,164 $159,391,168 $5,627,631
Cardinals $26,534,648 $26,534,648 $144,552,184 $22,139,421
Eagles $25,746,474 $25,746,474 $160,198,649 $11,562,923
Titans $25,654,471 $25,654,471 $185,118,853 $6,649,534
Chiefs $22,988,570 $22,988,570 $158,484,810 $7,997,504
Cowboys $19,001,771 $19,001,771 $177,108,391 $4,268,011
Bears $18,736,216 $18,736,216 $174,221,511 $920,086
Saints $18,667,912 $18,667,912 $158,558,424 $12,647,044
Ravens $17,436,691 $17,436,691 $146,612,830 $23,723,611
Jaguars $17,283,814 $17,283,814 $159,606,833 $24,148,786
Packers $13,144,793 $13,144,793 $171,660,446 $11,665,887
Giants $12,878,442 $12,878,442 $148,178,790 $33,656,400
Redskins $12,704,996 $12,704,996 $173,534,703 $7,334,536
Broncos $12,547,518 $12,547,518 $160,453,929 $21,387,244
Chargers $11,687,068 $11,687,068 $171,015,059 $4,264,089
Seahawks $11,171,439 $11,171,439 $176,122,108 $2,483,564
Rams $8,337,895 $8,337,895 $176,436,267 $3,850,076
Panthers $7,282,890 $7,282,890 $181,432,897 $3,519,784
Steelers $6,989,093 $6,989,093 $176,044,815 $23,099,683
Patriots $5,546,673 $5,546,673 $188,084,257 $2,706,368
Vikings $5,503,347 $5,503,347 $183,847,075 $2,233,330
Falcons $4,729,049 $4,729,049 $179,260,060 $4,825,608
Buccaneers $3,372,022 $3,372,022 $189,236,543 $1,094,515
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