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Sean Lee and Dallas Cowboys Contract Flexibility

So the surname of everybody's favorite Kung-Fu star and half of the best 3-down linebacking tandem in the NFL has received a new contract to stay with the Cowboys for, hopefully, his prime-years and, potentially, his career.

I just wanted to break down his contract and how (like so many of their big contracts now) it is designed to benefit the Cowboys constant effort to operate at, or near, the salary cap.

The six-year contract is an extension worth a reported $42 million base value, with incentives pushing that up to a possible $51 million. Now, it's important to note that this is an extension, meaning that they did not tear up the remainder of his current contract. Today, Sean Lee essentially signed a fresh, new 7 year contract worth a base $42.63 million, with the potential to earn up to $51.63 million. It's a deal very similar to those signed by Patrick Willis (7-years, $53.5 million) and NaVorro Bowman (7-years, $46.5 million).

I think all of us here at BtB would agree that Lee is very close to the quality of play that those two linebackers exhibit...when healthy. It's that last part that leads to the major difference between Lee's deal and the deals that Willis and Bowman signed. Lee received just $16.13 million guaranteed, compared to $25.5 million for Bowman and a big, fat, whopping $29 million for Willis.

Now that that's out of the way, I wanted to talk a little bit about his contract breakdown.

Lee's Base Salary will break down like this:

2013: $630,000.
2014: $5.5 million
2015: $2.5 million
2016: $3.0 million
2017: $7.0 million
2018: $7.0 million
2019: $7.0 million.

Currently, his '13 and '14 salaries are fully guaranteed (which, along with the $10 MM signing bonus, gets us to the $16.13 MM in guaranteed money in his contract). Should he maintain 80% playing time over the next two seasons he will get an extra $1.5 million in 2015 and the new $4.0 million in base salary will become fully guaranteed. Because of his $10 million bonus, his cap hit will be an additional $2 MM on each of the first 5 years of the deal (you may only prorate a bonus for 5 year, which will be important to note later on).

So his cap numbers become:
2013: $2.63 million
2014: $7.5 million
2015: $4.5 million
2016: $5 million
2017: $9 million
2018: $7 million
2019: $7 million

For this year, he burns up an additional $2 million, leaving the Cowboys with around $7.0 million in cap space.

As we all know, the Cowboys are, as always, in reported "cap-hell". Their 2014 cap was at $144 million BEFORE signing Lee. They now sit at over $150.00 Million in cap space committed to 2014. How are they going to handle this contract and their cap problems?!

This is how the Lee contract is exceedingly beneficial to the Cowboys (it's structured to be like most of the big contracts that the Cowboys have been handing out lately). It's how Tony Romo's contract is beneficial. They were both designed with the same expectation in mind. Did you notice how the second largest cap hit is in the second year? The year in which the Cowboys have an insane amount of money tied up elsewhere?

The Cowboys use guaranteed second (and even third) year salaries with the designed purpose of turning guaranteed base salary into a guaranteed signing bonus. By giving out relatively small signing bonuses and guaranteeing the early season base salaries, the Cowboys are able to convert those salaries to bonuses and prorate the bonus money into the later seasons of the deal that would've been otherwise empty of bonus money (and thus wasted/unused in crazy cap accounting purposes). So it circumvents the rule that only allows for prorated bonus money to be pushed back 5 years.

This brings me to the Cowboys cap situation for next year. The Cowboys currently sit at a top 51 of $148,689,491. When you add in the 52nd and 53rd players, their expected cap for next year would be around $149.5 million. If the salary cap were to stay flat (it won't), it'd stay at $123 million. If we include their cap rollover (let's assume ~ $5.00 million) then they'd be at $21 million over the cap.

Just by turning guaranteed money into guaranteed money for Romo and Lee, the Cowboys can create as much as $15 million in cap space. Do the same with any player you like ranging from Ware, to Carr, to Witten, or Ratliff, or Scandrick, or Austin and you've got your cap space. Add in cuts like Nate Livings, or Durant, or Orton, or several other players and: boom! There's your money for Dez Bryant, et. al.

Anyways, just wanted to do a little breakdown of the Lee contract for anybody interested, and show that while the Cowboys have a reputation as spenders who don't know what they're doing...the guys up front actually do have a brains AND a plan! Heck, they even manage to somehow think about 5-6 seasons down the road!

Hope this helps. If I've happened to make any mistakes, please let me know. Go Cowboys, and hooray for Sean Lee!

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