Dead cap is the portion of a player’s contract that still counts against a team’s salary cap after that player has been released, traded, or retired.
It represents guaranteed money that was either paid already or was contractually locked in, and now follows the team like a ghost.
It doesn’t pay the player again, it’s just money the team can’t get off their books. This is a critical factor in cap management, especially in leagues with hard or soft salary caps.
One wrong deal can financially haunt a franchise for years.
How Dead Cap Applies In Different Leagues
🏈NFL
Dead cap hits in the NFL are common due to their use of guaranteed contracts.
Teams will often cut or trade players, but their guaranteed money doesn’t vanish, it sticks around on the books.
Use Cases
- Dead cap is mostly created through prorated signing bonuses.
- If a player is released early, the remainder of that proration accelerates to the current season.
- Teams manage dead cap via June 1st designations to delay the hit.
Example
Carson Wentz left the Eagles with a $33.8 million dead cap hit after being traded to the Colts in 2021, the largest in league history at the time.
🏀NBA
Dead cap in the the NBA arises when teams waive a player and the contract was partially or fully guaranteed.
Use Cases
- NBA has a soft cap, but dead cap still matters for building rosters.
- The stretch provision allows teams to spread dead cap hits over multiple years, similar to proration.
- Used in buyouts, trade cleanups, and fringe roster flexibility.
Example
Luol Deng had $15+ million in dead cap on the Lakers’ books years after being waived.
They stretched his deal to free up short-term room for signings, but still paid for it long-term.
⚾MLB
Since all contracts are guaranteed in MLB, the concept of “dead cap” isn’t relevant in the same way.
Use Cases
- No official cap, teams owe the player his full salary if he is released.
- It becomes more of a sunk cost than a strategic restriction.
- Players can be cut but paid or even traded with cash considerations.
Example
The Red Sox paid Pablo Sandoval over $18 million after releasing him, despite him playing elsewhere.
Didn’t matter for cap implications, but it was still wasted payroll the team took a loss on.
🏒NHL
Dead cap hits are part of the buyout system or guaranteed salary fallout in the NHL’s hard cap structure.
Use Cases
- Buyouts reduce cap hits spread over time, but create dead money.
- Some players are bought out to create short-term salary/roster space, but extend cap damage into future years.
- Compliance buyouts (from past CBA changes) were temporary tools to reduce dead cap.
Example
The Canucks bought out Roberto Luongo’s contract, creating a $3+ million cap recapture penalty after he retired from the league.
⚽MLS / International Soccer
MLS
No true dead cap exists in MLS, because clubs do not carry guaranteed money on the salary cap after a player is waived the way NFL teams do.
They do however, have similar concepts, such as contract buyouts, mutual termination and transfers/loans.
These rules allow for MLS clubs to eliminate contracts off their books entirely rather than taking a cap hit.
International Soccer
No salary exists in International Soccer, which means their is no dead cap or similar concepts.
International Soccer leagues use termination payouts, free transfers and contract settlements.
There is still financial consequences for these types of transactions, but clubs don’t take on cap penalties because no leagues use a hard cap.
🥊UFC / Combat Sports
Dead cap doesn’t apply. There’s no team salary structure, fighters are independent contractors.
If a fight gets canceled or a fighter is released, they’re simply off the books.
⛳Golf / Tennis / Individual Sports
Dead cap doesn’t apply to these sports due to lack of team payroll caps.
🏎️F1 / NASCAR / IndyCar
Most of these contracts are privately structured with teams and sponsors, dead cap isn’t public or regulated like team sports.
Use cases
- Sponsorship or contractual termination clauses may result in financial penalties, but not a “cap hit.”
- Dead money may appear as internal write-offs, not something that affects roster construction.
Why Dead Cap Matters
Dead cap is where bad contracts go to die, but still take money with them.
In salary-capped leagues, every dollar counts. Dead cap takes away a team’s ability to spend freely and forces front offices to think long-term when offering guaranteed money.
Big signings don’t just affect today’s roster. They affect tomorrow’s flexibility.
Dead cap
- Limits player signings
- Forces restructures
- Can tank a rebuild
- Impacts playoff competitiveness
It’s not about paying the player again. it’s about paying the price of poor planning, early exits, or contract inflation.
🔗Related Terms
🔗Next Reads
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- How the Detroit Tigers Rebuilt their Franchise
- Top 5 Longest NHL Contracts In History
“For which of you, intending to build a tower,
does not sit down first and count the cost?”
– Luke 14:28
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