Cowboys Salary Cap Situation: All you need to know about Cutting Players

Note: I decided to break out the actual Salary Cap Calculations to another post, as it was really blowing out the current post, and could use some good discussion about the actual values of the various bonuses and salaries. Check it out here.

Update: Changed my calculations to fit the actual CBA rules :p. I was taking guaranteed bonuses and putting them in the year they were gained instead of pro-rating them. I'm still kind of off from the numbers that Watkins and Archer quote, but at least the difference is smaller. Surprisingly (at least to me), it didn't really seem to change the recommendation of what to do.

With the lockout hopefully ending this week (knock on wood), I'd thought it'd be interesting to look at how the Cowboys are currently constrained by the salary cap and what they can do to potentially acquire new talent.

Now, according to some reports, the Cowboys are currently at $136.6 million which is $16.225 million above the 2011 Salary Cap of $120.375 million. At first glance, this suggests that the Cowboys would have to just remove players just to meet the Salary Cap and would preclude the Cowboys from even thinking about signing any free agents this abbreviated offseason.

However, there are a couple of points which makes me think that the Cowboys cap situation isn't as bad as has been portrayed:

1. There will be a one time $3.5 million jump in salary cap to be put toward veteran salaries
2. Teams may borrow $3 million from a future salary cap year.
3. When I calculate the salary cap for the contracts the Cowboys have, I come up with a number about $6 million below the reported figure. I will detail the specifics of how I came up with those calculations, along with the caveats with the numbers that I calculated.
4. In addition to the Cowboys cap figure potentially being wrong, the savings that the Cowboys can make seems to have also been off. So, cutting your favorite whipping boy may actually save more money than previously thought!

Moves the Cowboys Can Make

The Cowboys have the following moves they can make to free up room to sign their draft picks and free agents:

1. Release/Trade Players (before "June 1st")
2. Release/Trade Players (after "June 1st")
3. Count 2011 Base Salary as Signing Bonus
4. Restructure Current Contracts

Release/Trade Players (before "June 1st")

In a normal NFL offseason, if a team releases or trades a player before June 1st, that player's signing bonus that has not been counted for cap purposes counts completely against that year's cap. (IOW, the player's signing bonus "accelerates" its cap hit to this year.)

Now, I remember reading that there would be a June 1st equivalent, but I don't remember where exactly I read this. (If someone could point me to a link which discusses this, I'd greatly appreciate it).

Here are the players who would save more than $2 million in cap space, if they were released before "June 1st."

From this list, the names which stand out to me are Bradie James, Jon Kitna, and Keith Brooking. Kitna is nice as a backup, but realistically, how far do you think the Cowboys will get in the playoffs if Romo were to get hurt? Also, if McGee shows enough to be a competent backup, then Kitna's $2.6 million would be put to better use elsewhere. James and Brooking is pretty much dependent on what they still have available in training camp. James seems more likely to be able to produce decently, however, he's also quite a bit more expensive.

As to the other names on this list, they either are probably worth their cap hit or they are considered in the next section.

Gone: None

Depends: Bradie James ($4.0 M), Jon Kitna ($2.6 M), Keith Brooking ($2.2 M)

Release/Trade Players (after "June 1st")

Any player released or traded after June 1st will only count the pro-rated portion of the signing bonus toward that year's salary cap. The rest of the signing bonus will count toward next year's salary cap.

Now when taking into account the future cap hit for releasing a player, you should also consider the amount of salary cap that player would take up if they weren't released before next year.

Here are the players who would save a different amount and would save more than $2 million in cap space, if Released after "June 1st."

From this list, the potential candidates to be dropped after "June 1st" are Williams, Newman, Davis, Gurode, Colombo, Barber, and Olshansky. In the prior incarnation of this article, Roy Williams was listed in the before "June 1st" group. Since I discovered that guaranteed roster bonuses are also treated as signing bonuses, it just moves the release date for Williams to after the "June 1st" date.

Barber should be gone, as his negative value is not worth any cap hit and we have a surplus at RB in Jones, Murray, Choice, and Miller. Same with Colombo.

Davis and Gurode are interesting in that there aren't really any replacements available if they are released, as Kosier is a free agent also. I would probably lean toward keeping Gurode for 2011, but not Davis if we can find an adequate replacement for Davis, as I feel that Gurode was probably above average while Davis was below average. Olshansky I don't feel was worth the money, so I'd likely also release him to try to re-sign Bowen, Spears or both.

Newman is difficult as he seemed at times overmatched, but the question is how much of that was injury-related. However, if he's released that leaves the Cowboys with 4 CBs which in this NFL seems really light, and two of those are McCann (a 2nd year UDFA) and Josh Thomas (a rookie 5th rounder). A position which would likely need to upgraded if Newman were let go, and the pickings are just so slim at CB.... ED. I forgot Ball, but that adds another question mark instead of a solid corner, IMO.

Gone:Roy Williams ($5.11 M), Marc Colombo ($5.0 M), Marion Barber ($4.75 M)

Likely Gone:Igor Olshansky ($3.435 M)

Depends:Leonard Davis ($6.0 M), Terence Newman ($8.0 M)

Likely Keep:Andre Gurode ($5.5 M)

Count 2011 Base Salary as Signing Bonus

This is the easiest way to restructure a contract as the player gets their 2011 money up front instead of weekly and allows the team flexibility to deal with the cap. Basically, this helps against the salary cap since the 2011 salary becomes a minimum salary and signing bonus and the signing bonus gets spread across the life of the rest of the contract.

Here's a list of players who could have their 2011 salary restructured as a signing bonus:

There's quite a bit of restructuring that can occur here. Austin and Ware seem like the best candidates as they would save $6.546 M and $5.212 M while only adding a little above $1 million each to future caps. If the Cowboys choose to keep Newman and Davis, they could also be candidates to restructure, though the cost in cap space will be significantly more to future caps without quite as much of a savings. Romo and Gurode don't seem like the best candidates to restructure as their contract lengths are relatively low (3 and 2 years, relatively). All the rest don't seem to make sense to restructure.

Likely restructure: Miles Austin ($6.546 M), DeMarcus Ware ($5.212 M)

Probably restructure if not gone: Terence Newman ($4.793 M), Leonard Davis ($3.393 M)

Restructure Current Contracts

There's too many variables involved in trying to figure out contract restructuring, and given the limited amount of time available to contracts for even new free agents, I highly doubt that the Cowboys will go down this route.

Moves the Cowboys Should Make

• Release after "June 1st": Roy Williams ($5.11 M), Marc Colombo ($5.0 M), Marion Barber ($4.75 M), Igor Olshansky ($3.435 M)
• Restructure 2011 Base Salary as Bonus: Miles Austin ($6.546 M), DeMarcus Ware ($5.212 M)
• Potentially release if replacements available: Bradie James ($4.0 M), Jon Kitna ($2.6 M), Keith Brooking ($2.2 M), Leonard Davis ($6.0 M), Terence Newman ($8.0 M)
• Potentially restructure if not released: Terence Newman ($4.793 M), Leonard Davis ($3.393 M)

With the first two moves and taking the 2 exemptions, the 2011 Salary Cap should drop to $100.894 M to $106.547 M with a cap of $126.875 M for a space of ~$20 to 26 M to sign free agents and the draft picks, depending on what the actual salary cap figures are. This could potentially drop another ~$20 M depending on what other players are released or restructured.

With the money available, let's say ~$20 M worst case scenario, the Cowboys should sign Tyron Smith (~$4 M cap hit), Free (~$8-10 M cap hit), Bowen (~$3-4 M cap hit), and 2 safeties (~$4 M cap hit). That'll take us up to the cap limit, but at the same time seems like a solid offseason with the caveat being that another DL needs to be found somewhere. Given the salaries given to last year's draft class, I don't see any of the draft picks after Smith being a significant bump on the salary cap (Sean Lee got a base salary with a $1.7 million signing bonus for a cap hit of ~$780 K).

The effect on the 2012 Cap will be to drop the cap hit from $105.483 M for 31 players to $97.893 M for 27 players or $87.877 M for 25 players (depending on Newman and Davis). The effect going into the future (post-2012) will be an additional $2.6 M of dead money until around 2015.