What happens if a signing bonus is in a contract longer than five years?

In the context of contract structures within the salary cap system, a signing bonus is a critical factor for how team payrolls are managed. When a player receives a signing bonus as part of their contract, this bonus is typically prorated across the life of the contract. However, the key detail is that the prorated amount can only be spread over a maximum of five years for salary cap calculations.

This means that even if the total contract is longer than five years, the portion of the signing bonus assigned to the salary cap will be limited to only five years. Consequently, if a team signs a player to a lengthy contract that includes a signing bonus, after the five-year mark, any remaining prorated bonus will not continue to count against their salary cap, which allows teams greater flexibility as they manage their roster and finances beyond that five-year threshold.

Options that suggest the bonus is prorated over the entire contract length or not counting against the cap at all do not align with the established rules governing salary caps, which specifically restrict the prorating of signing bonuses to a five-year maximum.