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The extra money is added to your payroll. As a result of having a higher payroll you will not have as much money to spend on Free Agents.. hence the reason you see that you have "less money" to spend on free agents.
Cash is simply the liquid assets of the team, the "Cash on Hand".
Free Agency Amount is calculated by this equation:
Money for FA = (Last Season Revenue - Current Payroll) + Cash
Hope this helps.
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