Description: The salary cap is a league specific amount of money which your team's total salary may not exceed. If your team's total salary does exceed this number, various penalties are applied to your team.

Topics

Salary Cap
Salary Cap Variance
Penalties for Exceeding the Cap
Getting Under the Cap

Salary Cap: As mentioned above, the salary cap is a league specific amount of money which your team's total salary may not exceed. League specific means that each league may have a different salary cap amount. The standard, however, is $100,000,000. The sum total of all of the players on your team may not exceed that amount. There are some instances where a player's salary does not count against the cap. Any player who is currently on the Disabled List will not count against the team's salary. In addition, minor league players do not count against the salary cap. All players who are on the active roster do count against the cap. This includes players who are injured. Players who are in the minors do count against your cap. Money you owe in salary liability does count against the cap.

Salary Cap Variance: To give teams the ability to sign free agents (and perform other team manipulation) without first releasing a player or players, a variance has been allowed for teams to go above the salary cap. This percentage of the cap is also league specific (as the cap is). The standard variance is 10%. For example, a team is in a league with a cap of $100M. There is a 10% variance. That team currently has a team salary of $98M. The team wants to sign a new catcher from the free agent pool for $5M/year. The team would be allowed to offer and sign the player even though his salary takes the team over the $100M cap. This is because there is a 10% variance for such instances. The total salary that the team could go up to would be $110,000,000 (or 10% over the cap). The team (after the C signing) may have a salary of $103M. The intent of allowing this variance was and is so that a team can sign players before releasing them. It was not intended so that teams could 'cheat' the cap and play with a team that has a salary in excess of the cap. For this reason, some stiff penalties have been implemented for teams that elect to exceed the cap and stay there.

Penalties for Exceeding the Cap: There are a number of penalties a team incurs when they go over the cap. These penalties typically only effect a team that elects to stay over the cap for an extended period of time. The following are the penalties for being over the cap:

No Training - A team over the cap may not train players until they are under the cap.
Trades and Free Agents - Trades and free agent signings may take place, but, may not exceed the cap plus the variance, therefore teams may only exceed the cap by a set amount.
Draft Picks - Draft picks will always be signed to your team. This is the exception that may exceed the cap plus the variance. They are not exempt from contributing to your penalties

Getting Under the Cap: There are a number of ways to get under the salary cap. Releasing players is one, trading higher salary players for lower ones is another, and placing injured players on the Disabled List is a third option. Please remember with any of these options, there are minimum roster requirements. Teams may not be able to simply release a bunch of players. You have to have certain numbers of players at each position. Another option is trying to renegotiate contracts with players who are in the 0 year of their contract. Often times teams can pick up some cap space by aggressively negotiating new contracts with players. If all else fails, a team can always try to sign some cheaper players from the free agent pool to replace higher priced players and then release those higher priced players.