Cowboys Capology: Can They Keep Restructuring?!

The Dallas Cowboys franchise relies on restructuring contracts to manipulate salary cap accounting. This is no secret, though highly polarizing. In fact, Stephen Jones seems so committed to cap games with restructured deals that he has been creating contracts specifically designed to be restructured. While blindly pushing new pro-rated bonus costs into future years is a recipe for disaster, it seems the Cowboys are intentionally setting up deals to manipulate the accounting of pro-rated signing bonuses, moving around accounting numbers to manipulate the cap hits in a given year.

Dallas has made these restructured deals so common, that it seems only right to question and debate the franchise's seemingly risky gambles, or downright negligent cap management. However, a closer look may reveal a masterminded plan of using loopholes to manipulate the system to your own benefit - the equivalent work of a high-powered tax attorney and accountant. The Tony Romo and DeMarcus Ware contracts (already restructured a few times over) are clear evidence that the Cowboys franchise are considering several years down the road when making these deals, and not mortgaging the future. Rather, they are extending the window of their veteran stars, guaranteeing they will remain with the Cowboys until the team decides otherwise.

A closer look at the numbers:

T. Romo Base Salary Cap Hit Bonus Left
2013 1.5M 11.8M 53.5M
2014 13.5M 21.8M 41.7M
2015 17M 25.3M 19.9M
2016 8.5M 15.1M 11.6M
2017 14M 19M 5M
2018 19.5M 19.5M 0
2019 20.5M 20.5M 0
D. Ware Base Salary Cap Hit Bonus Left
2013 .84M 8M 17M
2014 12.25M 16M 8.8M
2015 13.75M 17.5M 4.4M
2016 13M 14M 2M
2017 13M 14M 1M

The greatest worry for most Cowboys fans, as it pertains to the cap, is that Romo and Ware will account for $37.8M in cap space in 2014. While both players are stars in the NFL, they are both in their 30's and could be seeing a slide in production in the coming years. However, their contracts are designed for restructuring.

In 2014, the Cowboys could reduce that 37.8 cap hit by converting 10M of Romo's base salary into a bonus pro-rated of the next five years. And they can convert 8M of Ware's base salary into a bonus that will pro-rate over the remaining four years of his contract. These moves will lower their 2014 cap hit by fourteen million to 23.8M total.

While this would clearly help the franchise in the immediate future, people would be worried about pushing more money into later years. But the results may be surprising.

T. Romo Base Salary Cap Hit Bonus Left
2014 3.5M 13.8M 51.7M
2015 17M 27.3M 27.9M
2016 8.5M 17.1M 17.6M
2017 14M 21M 9M
2018 19.5M 21.5M 2M
2019 20.5M 20.5M 0
D. Ware Base Salary Cap Hit Bonus Left
2014 4.25M 10M 24.8M
2015 13.75M 19.5M 10.4M
2016 13M 16M 4M
2017 13M 16M 3M

Ware's cap hit does not increase by much in 2015, only two million, but Romo does show a worrisome 27.3M cap hit in '15. But worry not; his contract is made to handle another restructure. Romo could actually handle another ten million salary restructure in '15, pushing the pro-rated bonus over the final five years of his contract. His resulting contract numbers:

T. Romo Base Salary Cap Hit Bonus Left
2015 7M 19.3M 37.9M
2016 8.5M 19.1M 25.6M
2017 14M 23M 15M
2018 19.5M 23.5M 4M
2019 20.5M 22.5M 2M

Now, the clear worry is that all this restructuring is going to cripple the Cowboys cap numbers in the future. No way can a team get by lowering cap hits in two years without paying a terrible price in the future, right? Well, maybe not. Not if they had designed the contracts for that exact purpose.

Here are the final cap hits for Romo and Ware, taking into account two restructures for Romo (10M in '14, and again in ‘15) and one restructure for Ware (8M in ‘14), and how they compare to the expected cap hits under their current contracts (prior to any restructuring).

Year Old Cap Hit New Cap Hit
2014 37.8M 23.8M
2015 32.8M 28.8M
2016 29.1M 35.1M
2017 33M 39M
2018 19.5M 23.5M

With a 6M increase in expected cap hits in '16 and '17, there is clearly a future price to pay for all this cap manipulation. While the Cowboys would save 14M on the '14 cap, and 4M on the '15 cap, there is 16M worth of cap hikes in years '16,'17, and '18. However, the Cowboys were already considering events this far in the future when designing and restructuring these contracts.

In 2016, Ware will turn 34 years-old the summer before the season begins. Even after restructuring his contract in ‘14, Ware could retire (hopefully with a ring or two) or be released by the Cowboys and would only have 4M remaining of his pro-rated bonus money. That is very little dead money considering the size of Ware's contract. Instead of counting 16M against the cap in ‘16, the Cowboys could create 12M in cap space by cutting the future Hall of Famer. If there is a 2nd or 3rd year player ready to replace Ware, their two to three million cap hit and Ware's dead money would still be a cap bargain for the team's leading pass-rusher.

In 2017, Romo will be turning 37 years-old around the time of the draft. He could retire into the sunset (hopefully with a ring or three), or the Cowboys could release him (designated June 1st cut) and the team would have to handle 9M of dead money in '17 and 6M in '18. While that seems like a lot to handle, it would reduce his '17 cap hit by 14M. Also, the idea is that the Cowboys would have the next franchise quarterback waiting in the wings before that point, and his 2nd or 3rd year cap hit on his rookie contract combined with the Romo dead money would not be too much for the team to handle. Of course, Romo could still be slinging it like Brett Favre at that age, and his dead money a season later (2018) would only be 4M.

Keep this in mind when the media get's you too worried about the Cowboys cap future while restructuring these two veteran stars in the coming years. Yes, out of context, pushing money into the future will eventually hurt a team. But if it is done with some foresight and taking the players' performance at a late stage in their career into consideration, it could be done with great effect. In this case, it would manipulate the cap to the team's benefit while guaranteeing the two biggest stars on the roster remain in Dallas until they retire or the team needs the cap space. Considering how well both these players currently perform on the field, it seems a pretty safe bet that they will still provide (at worst) above average production for the next four years. Ware is clearly the bigger question mark of the two. But if the decline of a God becomes apparent during the '13 season, there wouldn't be a need for a restructure, he could simply be released (or traded) and clear off 7M from the '14 cap, even more if he's designated a June 1st cut.

Another user-created commentary provided by a BTB reader.

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