What Does Dead Money Mean in NFL Free Agency?

NFL free agency will begin on March 11, which means there are going to be a lot of inside-football terminology thrown around in regards to the contracts being signed. NFL contracts can be terribly tricky to get a handle on with how many moving parts there are and just how many players will be either signing new deals or released from old deals.

Fortunately, we are here to help. What follows is a breakdown of what dead money is in the NFL. Understanding what it means will help your overall grasp of how and why your team is going the direction they are as the offseason fully gets underway.

What Does Dead Money Mean in NFL Free Agency?

Simply put, "dead money" is money that counts against a team's salary cap for a player that is no longer on the team. For example, the New Orleans Saints have a dead cap hit of $1.4 million on their books because they released cornerback Bradley Roby in August 2023. He did not play on the team but because the Saints chose to release him instead of letting him play out the year, his contract still counts against their salary cap. Roby was already paid, but the money in his deal has to count against New Orleans' cap. They chose to have it count after he was off the team in order to give themselves more cap space to use when they first signed him.

Where Does Dead Money Come From?

Dead money is a result of particular wording in contracts offered by teams to players. All contracts must count for a certain dollar amount against a team's salary cap. Dead money helps ensure that every dollar does, in fact, count towards the salary cap. Justin Herbert's $262 million extension he signed last offseason, for example, counted for only $8 million against the Los Angeles Chargers' salary cap in 2023. But his dead money was $137 million. So, if the Chargers decided to get rid of Herbert for whatever reason, they can't get off scot-free. They would have to deal with the dead cap consequence that comes along with signing a player to a big deal and then getting rid of them immediately.

Is Dead Money Important?

Yes and no. As you can see, dead money is a significant hindrance in a team's effort to fill out their roster without going over the salary cap. Dead money is money they cannot spend, no matter what. However, most teams consider dead money as part of the whole process of managing the salary cap. A team like the Saints is happy to sacrifice dead money in the future in exchange for more flexibility in the moment. So while dead money can become overwhelming eventually, it isn't a big deal if your team has some dead money on the books.

Which Team Has the Most Dead Money?

For the 2024 offseason, the Chargers hold the title of most dead money with $24 million in dead money on the books. How did this happen? Well, Los Angeles signed cornerback J.C. Jackson to a five-year, $82 million contract in the 2021 offseason. After only two seasons they decided he wasn't working out and traded him to the New England Patriots in 2023. As a result they do not need to continue paying him, but he counts for $20 million against their cap space this offseason. It is essentially the consequence of a failed partnership and Los Angeles was apparently willing to pay the price to get him off the team immediately.

There's all you need to know about dead cap in the NFL as free agency begins.