How does the designation of "dead money" affect team strategy?

The designation of "dead money" significantly impacts a team's financial strategy, as it mandates that teams account for previous player salaries that are still impacting their salary cap, even when those players are no longer part of the team. Dead money arises from guaranteed contracts, bonuses, or buyouts, and counts against the salary cap in future seasons.

This financial obligation forces teams to carefully consider their roster decisions, as they must budget for these past costs alongside their current and future player commitments. For instance, if a team has a large amount of dead money, it may limit their ability to sign new players or extend existing contracts, as they have to ensure they remain within the salary cap limits while managing these lingering financial commitments. As a result, effective planning around dead money is crucial for maintaining a competitive roster within the constraints of the salary cap.