The NFL Salary Cap as we know it came about through the NFL's Collective Bargaining Agreement (CBA) back in 1993. The CBA was an agreement between the NFL Players Association (NFLPA) and the NFL owners to reach an equitable agreement in terms of the sharing of the pie, if you will.

Basically, through the CBA the parties have realized that the goal of the players and the management should be the same—increasing the revenue pie instead of fighting over the existing amount—and the NFL has tailored the CBA to achieve that end.

The NFLPA was rewarded with the concept of Free Agency, whereby players have the freedom to market their skills after a specific period of service. As a system of checks and balances, the owners sought a means of cutting back on the escalation of the players' salaries. This is accomplished by -- you guessed it -- the NFL Salary Cap.

Compromise is an abundant theme found throughout the CBA. The Free Agency system is slightly limited by the team’s ability to protect certain athletes (franchise and transition players) from leaving by paying a salary equal to an average of the top players at his position. On the other hand, the salary cap is flexible by allowing owners to pay signing bonuses up front that exceed the cap, but the amounts are amortized over the life of the contract. More important is the agreement that the cap, which is defined as a percentage of revenues, will grow as team and league revenues grow. This aligns the goals of labor and management because as teams make more money, so do the players.

The NFL Salary Cap has been in existence since 1994, and it will continue to rear its head at least through 2011, thanks to the new extension. On March 8, 2006, the NFL Management Council and the NFLPA agreed on the 5th extension to the original CBA.

In side-stepping labor war in 2006, and agreeing to extend the existing CBA , the league owners and players have jointly decided to dispell the fear of entering the 2007 season without a salary cap -- and labor peace remains on the horizon for the immediate future.

However, after abiding by the CBA for two seasons, the owners exercised their right to opt out of the agreement (as was their prerogative) as they did not believe that their interests were being best served. Thus, unless another extension is put into place, the existing CBA will expire after the 2010 season. Moreover, since the final season of the CBA is uncapped, as of this writing, the 2009 season is set to be the final capped season. There is, therefore, no certainty about whether or not the salary cap (at least as we know it) will still be in effect beyond 2009.