How the Bengals were able to sign Joe Burrow to a record contract: The salary cap explained

The numbers might look daunting, but they’re not.

CINCINNATI — Joe Burrow’s record-setting contract extension seems like a daunting amount of money. After the joy of the reports waned, many Bengals fans started pondering what’s next.

“How will they be able to sign Tee Higgins with that amount of money for Joey B?”

“What about Ja’Marr Chase’s extension next year?”

“Are we going to end up like the Chiefs: a great quarterback with nobody to throw to and a second-rate defense?” (who just got upset by the Detroit Lions in the NFL season opener, IN Kansas City, mind you).

Deep breaths. Keep smoking the cigars — there’s good news in the NFL’s economics on the horizon and it has to do with the salary cap.

For seasoned football fans, just scroll down a few lines. For you newbies or casual fans, here’s a brief explainer on what the salary cap is:

The NFL restricts the amount of money each team can spend on players. It’s the same maximum limit for each team. The cap was introduced in 1994, as a way to add parity and financial stability to the league. Back then, the first salary cap was $32 million, meaning, any one team could not spend more than $32 million on its players for that season.

It’s a little more complicated than that with the way that contracts can be structured with signing bonuses, trades and injuries, but just know that generally speaking, when you hear a salary number for an NFL player, the majority of that counts against the team’s overall salary cap, giving them less money to sign other players.

Bengals team owner Mike Brown recently explained this concept, using analogies of pie, corn and hogs:

Because all of us keep buying those $100 nose-bleed level tickets and the rest of us religiously watch the team’s games on Sunday, the NFL has never been more profitable.

The salary cap in 2023 for NFL teams is just south of $225 million.

In 2024, due to some new TV contracts and growing revenues post-pandemic, the salary cap jumps to $256 million. That’s the last year on Burrow’s current contract, when he’s scheduled to make $29.5 million.

Then in 2025, when Burrow’s new contract extension kicks in, the salary cap jumps again to $282 million. And once more in 2026, it’s expected to jump to $306 million.

Here’s why Burrow’s new contract number isn’t so daunting over time: If his contract takes up 20% of the Bengals salary cap in 2025 when his extension kicks in, it only takes up 18% the following year. And barring any pandemic-level events that set back NFL revenues dramatically (as they did in 2020), the salary cap will only keep going up, and the percentage of the salary cap that Burrow’s contract takes up becomes less and less over time.

One of the reasons multiple players have set new records for NFL salaries this summer (Lamar Jackson, Justin Herbert and now Burrow) is because teams know this cap hike is coming, and they can afford to take on these massive extensions and not jeopardize the rest of the roster over time.

The Bengals are notoriously under-spenders, meaning they don’t spend all the way to the cap limit. In 2023, they had the fourth most cap space in the NFL, or in other words, the fourth-most amount of money they didn’t spend toward the maximum amount they can spend (The most cap space in 2023 so far is the Cleveland Browns).

Normally, fans would have every right to scoff at this and complain about not bringing in top-tier players who require higher pay. But in the wonderfully orchestrated few years the Bengals have had with the draft and strategic free-agent signings, they’ve been able to stay competitive while they’ve built to this point, still leaving themselves room to sign their stars to longer-term, bigger-cash deals.

Moves like re-signing Burrow and bringing in tackle Orlando Brown on a new contract all show the team’s intent to flirt more with that cap space limit, and with that limit going up over time, eligible contract extensions like Ja’Marr Chase next year become easier to get done, even with Burrow’s pay ‘Dey.

And that whole Paycor Stadium sponsorship deal didn’t hurt either.

Tee Higgins is also eligible for an extension this year. The most expensive wide receivers in the league are making $23-30 million per year. Statistically, Higgins will likely end up deserving the low end of that range as the Bengals WR2. Whether Higgins thinks he can go to another team and make more as a WR1 is where the rub will be in the negotiation process, because again, the Bengals have the cap space — it’s more a matter of value. But to be clear, there has been no news from either Higgins or the Bengals on whether they’re close to a deal.

In 2024, the Bengals right now have at least $45 million in cap space to play with, which could be a fit to bring Higgins back and still keep the majority of the core. It gets trickier after that when Ja’Marr Chase also needs to be re-signed, likely at $30 million a year, if not more. That would mean that in 2025, Chase, Burrow and Higgins would make up more than a third of available salary cap, but with the cap’s continued upward movement, it’s entirely possible the Bengals will be able to retain its core offensive weapons through Burrow’s next contract expiration in 2030.

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