How is the NFL Salary Cap determined?
The Cap is determined through a complicated calculation system, which has changed with the latest extension of the CBA. The Cap is based on income that the teams earn during a League Year. Originally that “pot” was limited to what was known as Defined Gross Revenues (DGR), which consisted of the money earned from the national televison contract, ticket sales, and NFL merchandise sales. Under the new agreement the “pot” has been expanded to include total revenue. Thus, other sources of revenue, including such other items as naming rights and local advertising, have been added. As was the case with the original DGR, the expanded revenue is divided equally amongst all 32 teams for purposes of claculating the salary cap.
