If a club restructures a player's contract to create salary cap room, how is the new cap number calculated?

When a club restructures a player's contract to create salary cap room, the new cap number is determined by adjusting the player's original salary and potentially converting part of that salary into a signing bonus. This method spreads the cost of the bonus over the remaining years of the contract, thus impacting the cap calculation.

The correct calculation begins with the original salary, then subtracts the portion of the salary that has been converted into a signing bonus, and finally adds the prorated amount of the new signing bonus. The prorated portion is calculated by taking the total signing bonus and dividing it by the number of years left on the contract. This allows the team to lower the current year's cap hit while spreading the cap impact over future years.

This approach is often utilized by teams to manage their salary cap more effectively, helping them to fit more player salaries under the cap while also allowing the player to receive their compensation in a more favorable structure.