Player Release — Accelerated Amortization of Unamortized Signing Bonus (Dead Cap)

💡 Accountant's Note

When a team releases a player before their contract expires, the remaining unamortized signing bonus must be recognized as expense immediately — the player will no longer render services, so the prepaid compensation cannot be spread forward. Example: Player signed a 5-year/$30M bonus deal, has played 2 years ($12M amortized), and is released after Year 2. The remaining $18M unamortized bonus is 'dead cap' — recognized entirely in Year 3 despite no future services. This creates significant P&L impact in the year of release: teams managing 'cap cleanups' (releasing multiple veterans to free cap space) may recognize $50–100M+ in accelerated bonus amortization in a single year. NFL teams facing 'cap hell' (excess dead cap from prior contract decisions) often experience large losses despite strong current operations — the accounting correctly reflects the economic cost of prior decisions. Post-June 1 designations in the NFL allow the dead cap to be split across two years — a specific NFL roster rule that affects amortization timing.