What role does "dead money" play in the salary cap?

"Dead money" is a key concept in salary cap management because it represents the portion of a team's salary cap that is tied to players who are no longer part of the roster. This situation typically arises when players are released or traded, especially if they have guaranteed money or signing bonuses that count against the salary cap. As a result, even though the player is no longer contributing to the team, the financial implications of their previous contract continue to impact the team's salary cap for a specified period.

This dynamic can significantly influence a team's strategy in terms of how they approach player contracts and roster decisions. Managing dead money effectively is crucial for maintaining flexibility in signing new players or retaining existing talent, as excessive dead money can limit a team's ability to operate within the salary cap constraints in future seasons.