The Dallas Cowboys face several big decisions this offseason, with the two biggest being whether to extend Tony Romo's contract and whether to resign Anthony Spencer. The argument for signing them to multi-year contracts is their productive play, the lack of suitable replacements, and the ability to lower the 2013 cap hit for Romo rather than allowing his $11.5 million salary hit the cap in 2013.
The argument against signing them to multi-year contracts is their age (Romo will be 33 in April and Spencer will be 29 later this month) and the large contracts that they will command, which will include large signing bonuses and likely guaranteed salaries.
I propose an alternate path that is not as often used in the NFL - use of the franchise tag for Spencer again for 2013 and letting Romo play out his contract in 2013 with the use of the franchise tag available after 2013. It has been reported on this site that using the tag on Spencer for 2013 will cost approximately $10.5 million. NFL.com lists the 2012 franchise tag for QBs to be $14.4 million.
Spencer had the best season of his six season in the NFL in 2012, and without a viable replacement on the roster, there is pressure to sign Spencer to a long term contract. To me, the important question that the Cowboy's organization needs to try to answer is whether Spencer's high level of play will continue if he gets a large signing bonus and guaranteed money. I admit that I know very little about Spencer personally, while those at Valley Ranch do, so hopefully they use their knowledge to make the right decision. I personally am skeptical of players who breakout in contract years after several seasons in the league. Some will say "the light has come on" for him, but it could just as well be that he worked harder in the off-season and during the season. The question is will he continue to work as hard when money is no longer a motivator. Spencer had this to say prior to the 2011 season:
"You can't mail days in in this league, and I definitely found I was doing that last year."
Recent experience with large contracts haven't turned out very well for the team. Ken Hamlin, Leonard Davis, Marion Barber, Doug Free, and to a lesser extent, Miles Austin, regressed after signing large contracts. There are exceptions such as Demarcus Ware and Tony Romo. An awareness of player psychology is key. Psychology major Jimmy Johnson traded Hershcel Walker after coming to the conclusion that he "wasn't in it for the long haul." Johnson later criticized Minnesota for giving Randy Moss a large signing bonus, saying you give large bonuses to players like Zach Thomas, not players like Moss. In other words, players who are driven by competition and love of the game will continue to work hard regardless of financial incentives, while others will not. Let's hope that Jason Garrett has some of Johnson's ability to read players motivations - it has been shown that Jerry Jones doesn't.Let me be clear that I am not one of the those fans who thinks that Spencer is not a good player. In fact, he may have been the most productive player on the team in 2012. I also appreciate that he has rarely been injured, which I haven't heard mentioned. I would gladly hand him a long term contract typical of a contract for an above average starting pass rusher (4-3 DE or 3-4 OLB). However, I would hesitate to give him a contract typical of a top level, elite pass rusher, which is what he may command. In my opinion, it would be more prudent to assign the franchise tag to him for 2013, which should maintain his financial motivation while not further mortgaging the team's salary cap future. This option would allow the team to draft a potential replacement for 2014 from a very strong group of pass rushers in the upcoming draft and also learn more about whether Kyle Wilbur is a legitimate starting option. The cap hit if he signed a long term contract likely wouldn't be much less than the $10.5 million cap hit using the franchise tag. Prior to the 2011 season, Lamar Woodley signed a 6 year, $61 million extension with a $13 million signing bonus and $22.5 million guaranteed. The average per year is similar to the franchise tag amount. Prior to the 2012 season, the 49ers signed Ahmad Brooks for $37 million over 6 years, and he is clearly not in the same class as Spencer. Chris Long was signed for $60 million over 5 years, with over half that guaranteed. For an example of a more highly regarded player, Julius Peppers signed for $84 million over 6 years ($14 mil/year) with half guaranteed. I expect Spencer to command $8-11 million per year over 5-6 years. If he reverts to being an average to above average starter but nothing special, that would be a major drag on the cap for many years without commensurate production.
A possible additional benefit would be that a team that feels it is close to winning a championship could offer Dallas a substantial draft pick or picks to try to get Spencer. Once he is signed long term, he is basically untradeable due to signing bonus acceleration. Due to the team's salary cap issues, an offer of a first round pick would be something to consider due to the benefit of acquiring a good young player at a much lower salary, which would free up money in the future to sign other players approaching free agency (e.g. Sean Lee and Dez Bryant).
Now on to Tony Romo. Several Dallas columnist have stated that the team will extend Romo because his $13.5 million cap hit for 2013 is too high. I've also heard a respected national columnist speculate that a Romo deal would be similar to the 5 year $100 million deal ($37 million signing bonus, $40 million guaranteed) that Drew Brees signed. His deal had a $10.4 million dollar cap hit for the first year with a huge liability coming due in future years. My question is whether it is worth mortgaging the future to save $2 million on the cap for one year ($14.5 estimated tag amount - $10.4 - the $2 in signing bonus proration from the previous contract that will hit with or without a new contract). While Brees is more highly regarded than Romo and Romo may not command that high of a salary, consider that Rothlesburger signed an 8 year, $102 million contract, Eli Manning signed an 8 year, $107 million dollar deal in 2009, and even Ryan Fitzpatrick signed for $62 million over 7 years.
I'd be glad to extend Romo's contract at a reasonable amount, say $48 million over 4 years or a longer contract and higher amount with a way out that won't be too painful financially. However, it seems unlikely that he would accept a deal significantly lower than those other QBs. I'd prefer to use the tag on him in 2014 and possibly again in 2015 if he continues to play well. Romo would be 36 for the 2016 season and likely either ready to retire, significantly less productive, or easier to sign to a reasonable contract due to age. A counter argument is that using the franchise tag would upset their QB and team leader. I bet the Eagles wish they had used the tag on Vick and not worried so much about his feelings.
One year deals would also provide financial motivation for Romo and again could draw trade suitors. If Arizona, for example, wanted to sign him and give up 2 first round picks, I would be content with that considering the long term reward. If Carson Palmer netted a 1st and a conditional 2nd that could reasonably have been a 1st, is two 1st for Romo that out of the question for a team as desparate for a QB as Arizona? As much as losing Romo would hurt in the short term, extra draft picks could help build a strong team.
Another benefit to using the frachise tag versus a long term contract is that the team would benefit from compensatory draft picks if the players are signed by other teams. Players on long term contracts well into the thirties are often released and therefore not considered in the compensatory draft pick calculation. Even if they aren't released, by the time their contracts are up, they aren't signed for much money by another team.
The next question is whether the team could afford to absorb the salaries for Romo and Spencer for 2013. Based on my calculations, the team could create plenty of room by converting 2013 base salaries for several players (Carr, Ware, Witten, Claiborne, Scandrick, Sensabaugh) to signing bonuses and cutting some players (Spears, Connor, Free) . Others such as Ratliff and Austin could be options for renegotiation or release. Why they extended Ratliff at his age I will never know, but that is another topic.
If readers are interested, I plan to post detailed salary cap savings for converting 2013 base salaries into signing bonuses. While this pushes cap money into future cap years, I don't see this as adding risk or liability as compared to a new contract. As long as the team plans on keeping the player for 2013, no additional financial commitment is made.