Some folks are under the impression signing Dak Prescott to a $30+ million per year extension prevents them from re-signing everyone else – that would be incorrect.
When news of Carson Wentz’s new four-year, $128 million extension broke, Cowboys Nation erupted: “If Wentz could pull in that level of coin, how much is Dak Prescott going to cost the Dallas Cowboys?” The idea that Dak would not just approach, but quite possibly exceed the $30 million per year mark was met with a fervent level of weeping and gnashing of teeth on Cowboys Twitter.
The general worry was if Dak costs too much to re-sign, the Dallas Cowboys wouldn’t be able to re-sign their other premium players. While that cause and effect relationship makes sense in theory, it couldn’t be further from the truth in reality. That’s because the rigidness of the salary cap is largely a myth, and the Dallas Cowboys can afford to re-sign everyone, if that’s what they want (operative phrase: “if that’s what they want”).
The Salary Cap
Contrary to popular belief, the salary cap was not created to maintain a competitive balance and overall parity in the league.
as long as you’re lucky with injuries, and you’re assessing talent appropriately, spending big (or even overspending) isn’t really an issue. That’s because the salary cap has a great deal of flexibility.
Rather, it was created to protect veteran players from losing money to rookies and to protect owners from overspending in free agency. Parity can be an outcome, but it is not the intended goal.
Another commonly held misconception is the salary cap is clear-cut just like our personal finances and day-to-day budgets. It is not. Salary structures can be manipulated throughout the length of the contract, pushing money from one place to the other making it more a game of savvy accounting, than fiscal responsibility.
Three things make the salary cap complicated and highly manipulatable:
- Contracts are not fully guaranteed
- Accruals (like bonuses) can back-load a deal and even extend beyond the tenure of the player
- Accounting adjustments can be made mid-contract
Since the contracts are not fully guaranteed, the big number is rarely the actual number. Take Tyrone Crawford for instance: In 2015 he signed a 5-year, $45 million extension. While the big number is $45 million, only $24.675 million was guaranteed.
In 2016 he restructured his base salary and converted it bonus. He still was paid the same in real life but on the books his 2016 salary just got spread out over the next five years. So while it first looked like Dallas had no money to spend that offseason, a simple accounting adjustment to one player freed up over $5 million to use in free agency.
Signing bonuses are inherently guaranteed money, but roster bonuses, performance bonuses, work out bonuses, and even some base salaries can also come with guarantees. The thing is – each contract is different and the devil is in the details.
Accruals are what make this all such an accounting task. Signing bonuses aren’t absorbed all at once, they are spread out over the length of the deal (five years max). It’s that accrual method that makes dead money possible, but it also allows teams to otherwise overspend from time to time. Preemptively cutting a player is a way of manipulating the cap since it pays a player after he’s already left the team.
The ability to alter deals mid-contract allow even more manipulation. Since teams must abide by certain rules that prevent them from back/front loading deals when they’re first drafted, teams often wait until each offseason to convert large base salaries to bonuses so they accrue the sum over the existing years on the deal (just like, and to be added on to, the initial signing bonus).
A good accountant can manipulate nearly any situation to free up cap space. That’s why even if the Dallas Cowboys re-sign Dak Prescott to a mammoth deal, they can still afford to re-sign Amari Cooper, Byron Jones, Jaylon Smith, and Ezekiel Elliott if they so desire.
Like many accounting situations, flexibility and manipulation is possible “within reason”. The salary cap isn’t 100% fake news – it’s only partially fake (insert cable news joke here). A team can’t sign EVERY free agent player they see, year after year, or eventually the cap space will run out.
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But as a general rule, teams can always afford to re-sign their own cornerstone players to enormous deals. It’s when we see massive regression or a career threatening injury befall those high priced players that we see financial troubles arise. That’s because the money is not just being wasted on a useless player, but the absence of said useless player requires further investment from the team in his replacement. But it’s very rarely a bad idea to pay a great player who’s rarely injured (even if it looks like overpayment).
In other words, as long as you’re lucky with injuries, and you’re assessing talent appropriately, spending big isn’t really an issue. That’s because the salary cap has a great deal of flexibility.
Don’t fall for excuses
Teams will often point to the cap as the reason they aren’t (re-)signing free agents. Don’t fall for it. They are using the cap as an excuse, but the reality is they just don’t want to spend the money. We see it all the time. The team doesn’t want to be the bad guy and the salary cap excuse saves them from their outspoken fanbase (aka their money supply).
We have talked about, and will continue to talk about, the worthiness of our favorite Cowboys players’ next deals. But there’s no need to pretend they have to choose one over the other for financial reasons.
The Dallas Cowboys can afford to pay Dak over $30 million per year AND re-sign all their other big names. It’s not effortless but it’s perfectly doable. If they chose not to, it’ll be for an entirely different reason. And that’s what’s worth talking about.
- Published on 06/10/2019 at 12:43 PM
- Last updated at 06/10/2019 at 13:38 PM