https://www.sportico.com/leagues/football/2025/buffalo-bills-free-agency-josh-allen-contract-salary-cap-1234843045/
Signing Josh Allen to a record-setting, $330 million contract extension freed the Buffalo Bills to spend even more in free agency this week. If that seems counterintuitive, welcome to the sometimes-upside-down logic of modern NFL salary cap strategy.
It made sense to the franchise QB. “I understood the impact of getting an extension done,” Allen told reporters Wednesday. “This opens up some space for cap and signing some free agents.”
Sure enough, the Bills have added talent around Allen in the days since, offering $36 million over three years to incoming wideout Joshua Palmer and building up the D-line by allocating more than $25 million this year for Joey Bosa, Michael Hoecht and Larry Ogunjobi. Buffalo signed another WR, Laviska Shenault Jr., on Thursday.
Allen’s extension was significant because of the way money is accounted for under NFL salary cap rules. While base compensation applies to a team’s salary cap for the year it’s earned, signing bonuses and other one-time expenditures can be prorated, often for up to five years.
In the long run, the net salary cap impact is the same. But with the cap rising year over year as NFL revenues balloon, a dollar in 2030 will likely take up a smaller percentage of the expected spending limit than a buck will this year. Thus a competitive advantage is available to ownership with money—and a willingness to pony it up today. In 2024, all but six teams spent more than the $255.4 million salary cap, according to Spotrac data.
“Too often there is more focus on the cap when additional focus should be placed on cash,” former Oakland Raiders CEO and current CBS analyst Amy Trask said in a phone interview. While every team operates with the same salary cap limitations, “different team owners have … different levels of willingness as to cash expenditures.”
According to Over the Cap, Allen’s six-year deal (including $250 million in guarantees) will see him earn $1.26 million in base 2025 salary, with another $40 million coming as a signing bonus. The contract gymnastics cleared about $3 million off what would have been a $44.73 million cap hit for Allen in 2025; it would have been even more beneficial, except for the fact that the Bills had already pushed some of his previous earnings onto the 2025 cap as part of a similar 2023 contract restructure. His cap number stays relatively low until 2029, when a new deal could be negotiated.
Before free agency, the Bills also extended receiver Khalil Shakir. Though he signed a $53 million deal over four years, his cap hit this year is only $2.6 million according to Over The Cap. That hit will jump to more than $16 million in 2029—assuming the Bills don’t adjust the numbers before then, kicking the can further down the road.
One downside to the accounting technique: If the player is no longer on the roster, all of that pushed-off cap attribution is generally accelerated onto the current season (or spread over two years). But if the strategy delivers a Lombardi trophy before that big bill comes due, the pain is more manageable.
The Tampa Bay Buccaneers and Los Angeles Rams both spent big en route to 2021 and 2022 titles, dealing with the salary cap implications of retiring superstars thereafter. More recently, the Eagles have taken the technique to a new level.
Over the Cap tracks how much salary cap space each team could save this year by restructuring all of its contracts, pushing cap accounting into the future. The average club could cut its salary cap number by $46.2 million, according to the site’s calculations. By comparison, Philadelphia only has $4.2 million of space left on the table.
Jalen Hurts’ base salary won’t go above $1.4 million on his $51 million-per-year contract. That kept his cap number to $13.6 million in 2024, allowing the Eagles to add the likes of Saquon Barkley and win a Super Bowl. Philadelphia was third overall in cash spending in 2024, at $328,561,211—30% more than its salary cap figure. The Browns and 49ers spent even more, proving you can’t just buy a ring.
The Chiefs play the same game. Recent changes to Patrick Mahomes’ and Chris Jones’ contracts reportedly cleared $50 million in cap space this year.
Trask says that in the past, high-revenue teams had a competitive advantage thanks to their ability to dedicate upfront cash for salary cap benefits. But as the league’s pie has grown overall, it’s easier now for any team to do the same. “Cash may well now be less of an issue for some clubs,” she said.
This year, teams looking for more money have a new option: private equity. While there are numerous reasons an NFL team might want to add new investment to its cap table, Trask said, “I absolutely think there are some owners who are seeking those investments, such that they have greater latitude in terms of cash expenditures.”
The Bills rarely spent cash beyond the cap during the latter years of previous ownership, but they ranked in the top 10 in cash spending in 2021, 2022 and 2023 under Terry and Kim Pegula, who bought the franchise for $1.4 billion in 2014. As of Saturday morning, Spotrac ranks the Bills second in 2025 cash spending committed so far.
Bills ownership sold roughly 20% of the franchise last year to limited partners including PE firm Arctos, likely netting more than $1 billion. The team is midway through a $2.2 billion stadium construction project—aided by $850 million in public funds—that will further boost annual revenues once completed. Sportico estimates the Bills were fourth-to-last in team revenue in 2023.
This week, Bills GM Brandon Beane was asked about the team’s ability to follow the Eagles’ footsteps when it came to spending big at key positions.
“Some of it is organizational,” he said. “Like, ‘Are you willing to spend [above the salary cap]?’ and that starts with Terry Pegula. He gives us the resources to truly go out and be aggressive at certain times.”
In many ways, the account-for-it-later strategy is a bet on the still booming NFL. The salary cap has grown roughly 35% since 2022. All expectations have it continuing to skyrocket, especially with a new set of media deals potentially on the table in 2030. Assuming it goes up, teams are essentially borrowing salary cap space at a 0% interest rate.
“If we do what we set out to do, we could be immortalized in this town,” Allen reportedly texted Bosa before he signed. At that point, no one will be counting pennies—except, of course, for the Bills front office staff tasked with maintaining related cap allocations for years afterwards.
https://www.sportico.com/leagues/football/2025/buffalo-bills-free-agency-josh-allen-contract-salary-cap-1234843045/
