Cowboys 2013 Salary Cap: The Ratliff Extension And The Post-Release Landscape

Norm Hall

The release of Jay Ratliff brought what seems to be a lot of misinformation and conjecture to the forefront over the Cowboys cap and contract handling.

Yes, it would be a very bad idea to plan on a 30-year-old, undersized nose tackle to be a competent player for an additional seven years.

The Cowboys released nose tackle Jay Ratliff yesterday after he's failed to play in a game since Week 11 of the 2012 season. Jay Ratliff did not play a single down of football during the contract extension he was given at a time when Dallas didn't have to. That makes the contract a bad business deal.

I think everyone can agree on those facts.

I have no qualms with that stance. My dissension is, that isn't really what the Cowboys did. Make no mistake, the Cowboys handled the Jay Ratliff contract situation poorly, but I just don't believe the mistake was made in the way it's been discussed. The "Cowboys made a big mistake by inking Jay Ratliff to a 5-year, $40 million extension with $18 million guaranteed" take is what I'm speaking of.

I guess this is a bit of nitpicking semantics; it just frustrates me when people repeat short takes from a complicated situation and choose the wrong snippets.

People seem to harp on the $18 million guaranteed, because as we all know, the guaranteed money is really the only part of an NFL contract that means anything. Unless, of course you are using the contract to cite bad team management and want to make the error as egregious as possible.

Here's the rub. The two years remaining on Jay Ratliff's original contract were worth over $8 million dollars. In essence, outside of the $10 million signing bonus which was perfectly reasonable in my estimation, the Cowboys didn't originally guarantee a dime of Ratliff's "extension".

They gave him $10m basically as a reward for outplaying his prior contract, and higher base salaries over the course of the five-year extension, but the Cowboys were in a perfect situation to walk away from Ratliff whenever his skills showed a major decline.

At the time of Jay Ratliff's extension, entering the 2011 season, Ratliff was indeed underpaid. The Cowboys signed him to a very team-friendly contract during the 2007 season: five-years, $20.9 million. After three consecutive Pro Bowl seasons, he was definitely outplaying his contract with two years remaining.

In essence, the Cowboys gave Ratliff $10 million as a "yeah, you've been underpaid the last three years" thank you gift, and were able to spread $6m of it over the three years after his original contract would expire. That's it. If they had left it at that, it really wasn't a bad contract at all.

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The salary cap is a fluid thing for every team. There are many incentives that are written into the deep crevices of every contract that can be interpreted by different sections and subsections of the 2011 CBA. Since complete player contract details rarely ever make it to the regular fan, many are often left to regurgitate what they hear from pundits and writers. It isn't always correct however, simply because the information specifics are so hard to come by.

That's why I always like to use estimates when it comes to these things. I round up, I round down, I use the term "approximately" a lot. Different people have different information.

ESPN's Todd Archer is the Cowboys beat entity that I listen to when it comes to salary cap information. However, the most comprehensive site that I've found over the years has been OverTheCap.com. That is where I currently go to draw information. The downside is that sites like OTC (and Spotrac.com, my former go-to) is that they update their sites once a player is released or re-signed, and the prior information is no longer available currently.

Yesterday, when news of Ratliff being released circulated, I quickly raced to OTC to get the overall cap ramifications of the release. Ratliff was on the books for a $1.34 million in base salary, and a prorated charge from his signing bonus for $2 million, and a prorated charge from his August restructure for another $732,000. Here's how Ratliff's cap charges looked prior to yesterday.

Year Base Salary Signing Bonus Restructure Bonus Total Cap Charge Dead Money If Released
2013 1,340,000 2,000,000 732,000 4,072,000 9,660,000
2014 5,500,000 2,000,000 732,000 8,232,000 6,928,000
2015 7,000,000 2,000,000 732,000 9,732,000 4,196,000
2016 7,500,000 732,000 8,232,000 1,464,000
2017 10,000,000 732,000 10,732,000 732,000

The "Restructure Bonus" you see over this and the next four years? That didn't occur until this past March 11th.

The real issue, the only issue, is that Dallas used Ratliff's 2013 base salary of $5 million to help create additional room under this year's cap. And that was further exascerbated by using that cap space to put a franchise tag on Anthony Spencer, to the tune of $10.6 million.

Prior to his release, the Cowboys paid Ratliff approximately 35% of his base salary for the 2013 season, $472,941.

If Dallas had kept Ratliff at his original deal, then cut him yesterday, he would have cost Dallas $1,764,705 in base salary on the year. Add in his prorated signing bonus of $2m, and his cap hit would have been $3.76m.

There isn't much difference between that and the cap hit Dallas will now have, which is between $3.2m and $4m depending on whether any of his base salary was guaranteed in the restructure.

The real difference is that the restructure cost Dallas about $3m in cap space on the 2014 cap. Instead of only having $4m left in unamortized charges, Dallas now has $6.9m remaining. That's all on the books next year.

Of course, the reason he was restructured was because Dallas had to be under the cap by the start of the new league year, March 12th. Remember, the $3.5m savings from Doug Free's restructure didn't hit until May. Even with that, it's hard to say if Dallas would have had the flexibility to sign a Brian Waters.

This is all to say that Dallas originally had what I consider a good game plan in regards to Ratliff's extensions. They just backed themselves into a corner with other deals and perceived have-to-haves (Spencer).

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The discussion of whether or not Dallas had the same diagnosis on Ratliff needing to sit a year, as his agent tried to spin yesterday, is worthy, but not one for this article. I have my doubts as to why Ratliff would run a conditioning test if he and his doctor's fully believed he was not even close to being able to play. Was the pressure from the team that heavy? Does it stem from the December locker room dust-up with owner Jerry Jones? Is the agent spinning a tale trying to get employment lined up for his client in 2014? We simply don't know.

Salary cap-wise, if Dallas truly had their doubts, than restructuring Ratliff in March was perhaps the dumbest move in the history of history.

On the bright side, Dallas has now reduced the 2014 impact of Jay Ratliff on the cap by $1.3m. Yes, they have a charge for a player that will not help them. Yes, it will upset most people should Ratliff be playing in another uniform next year and costing Dallas $7m in cap space that could have been spent elsewhere. Yes, his cap hit after release could have been just $4m.

The real win, however, is the flexibility Dallas has after 2014. Gone are the projected cap hits of $9.7m in 2015, $8.2m in '16 and $10.7m in '17. That frees up money for the extensions of the new guard: Tyron Smith, Dez Bryant, Dan Bailey and Bruce Carter. Again, I think the Cowboys planned for the inevitability of having this room become available. They just went off track by restructuring his deal in March.

Finally, here are a few salary cap tidbits that I think people might be interested in, or need to be aware of.

  • According to OTC, the 2013 Cowboys salary cap now contains $34m in cap charges that will play 34 downs for the 2013 season. Between the reserve/injured list, dead money from released contracts and the cap penalty... That's a quarter of the 2013 salary cap that is of no use to this team.
  • The Cowboys used approximately $121.68 million of the $123 million 2013 salary cap, pending savings from Ratliff's release if none of his base salary was g'teed.
  • Dallas has 56 players currently under contract for 2014, at the tune of $133m. They also have about $11m in dead money, for a total of $145m. They will still have some work to do as the tv revenue money is not expected to jump the cap until 2015 at the earliest. Missing from the list of accounted players: Hatcher, Waters, Bailey.
  • Dallas currently has 26 players under contract for 2015, at the tune of $124.7m. Missing from the list of accounted for players: The above three plus Dez Bryant, Tyron Smith, Bruce Carter. Included that will probably not be in Dallas: Austin, Orton, Bernie.
  • Cautionary tale - We all love what Jason Hatcher has done for the last year and a half, but he'll be 32 before next season starts. Thankfully, defensive line contracts plummeted last offseason. If that's a trend, than Dallas might be able to retain his services for something rational and reasonable.
  • Demarcus Ware will also be 32 before next season starts. He has a $16m cap hit next year, followed by a $17.5m cap hit in 2015. The good news is, it's mostly written as base salary. Ware is one of the few Cowboys who has never had his current deal restructured. If they moved on from Ware (blasphemy) they would save $7.4 million off of next year's cap. Would he be willing to do a "Doug Free"?
  • Miles Austin's salary structure is all sorts of screwed up. He still has $7.86m in unamortized bonus left on his deal. So even if they cut him and his $5.5m base salary, the savings are minimal. An outright release would only save approximately $400k. A June 1st cut save more for 2014, but lessen the 2015 help. A June 1st 2015 cut seems the most plausible at this point, but Dallas just showed it's willing to take minimal help now and in '14 for big help in '15.
  • Kyle Orton is still on the roster. He has $3.3m unamortized bonus remaining and his base salaries are $3.25m, $3.5m, $3.5m the next three years.
  • Mack Bernadeau would net a $1.4m savings if released next year, and would shave $4.5m off of Dallas' 2015 projected cap number.
  • Jermey Parnell, Phil Costa and Justin Durant all have $1m+ base salaries in 2014 with minimal prorated hits. Look for them to be released in 2014.
  • Drake Nevis and George Selvie, should they continue their play, are already locked in for 2014.
  • Dallas could see substantial cap relief from releasing Tony Romo, Orlando Scandrick, Doug Free, Brandon Carr, Jason Witten (with plenty dead money), starting in 2015.

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