Dead money is the cap charge a team must absorb for a player who is no longer on the roster. It typically consists of unamortized signing bonus and guaranteed salary still owed.
Dead money is one of the most misunderstood concepts in NFL finance, yet it drives some of the most consequential roster decisions every offseason. When a team cuts or trades a player, any remaining prorated signing bonus that hasn't yet been charged against the cap accelerates into the current year. This accelerated charge is called dead money. Guaranteed salary that has already been paid but not yet counted against the cap can also contribute to dead money. The impact of dead money can be enormous. When the Cleveland Browns traded for Deshaun Watson and gave him a fully guaranteed $230 million contract, they took on massive financial risk. If Watson were to be released, the remaining guaranteed money would create one of the largest dead money charges in NFL history. Similarly, when the Saints released or restructured several players after the 2023 season, they carried over $80 million in dead money, severely limiting their ability to compete in free agency. Dead money is not always bad. Strategic cuts of overpaid veterans can free up more cap space than the dead money costs. If a player has a $20 million cap hit but only $5 million in dead money, cutting him saves $15 million in cap space. Teams also use the June 1 designation to split dead money across two years, softening the immediate blow. Understanding the dead money implications is critical before making any roster move.
Category: Salary Cap. Part of the StickToTheModel NFL Encyclopedia.