On Tuesday, the Cowboys did some neat work to get under the NFL's $134 million salary cap by "flipping the switch’’ on clauses in three players' contracts. As expected, the team reworked Tony Romo’s deal, converting base salary into signing bonus that can be spread over the remainder of the contract, thus cutting his hefty $22-million cap figure roughly in half. In addition, the front office engineered similar restructures for Sean Lee and Orlando Scandrick (whose deals also had restructuring clauses - "switches" - built into them), which will give Dallas another $7 million worth of room.
None of this work should come as a big surprise; re-working these contracts was planned from the day the original deals were signed. As a result of these maneuvers, the team finds itself within a million dollars of the cap. With the rumored release of backup center Phil Costa, the Cowboys will erase another $1.5 million of cap commitment and, with fewer than a handful of moves, get under the cap in time for the advent of free agency. Should the team care to make it an even five, they can designate Miles Austin for a June 1 release, saving another $5.5 million in the process.
But, to my mind, that's not the real news. The real story here is who they didn't restructure. There are other Cowboys contracts that include this same sort of restructuring option. Two notable examples are Jason Witten and Brandon Carr, both of whom could have been given the same treatment had the team wanted or needed further cap relief. That the Cowboys didn't exercise either of these options is a telling instance of financial prudence, as are the recent stories coming from Valley Ranch that the team wants DeMarcus Ware to take a pay cut (insiders say Dallas wants something in the $6 to $8 million range).
Allow me a brief detour: in the first installment of my "front office report card" series, I wrote that its bad business to give big-money and/ or long-term contracts (typically "third" contracts) to veterans who are 30 or older, whether they be your own or another team's. When it comes to other team's veteran castoffs, the front office has operated fairly shrewdly; however, Jones' soft spot for productive (or only semi-productive) homegrown players, I wrote, has produced far too many contracts for older, declining Cowboy lifers whose production then failed to meet their pay grade by the end of the deal.
Along these lines (and related to this issue) is the team's recent policy of "kicking the can" via restructuring deals so that money on the present cap is deferred to future caps. While this has given the team immediate relief, it puts even more pressure on future caps. And the real problem lies in who they have tended to restructure: their "core" players, the majority of whom were brought in between 2003 and 2007. That means that now, in 2014, they are geriatric by NFL standards. Thus, the Cowboys "kick the can" fiscal policy has achieved roughly the same result as offering big contracts to old free agents with declining skills: it inevitably adds dead money to the rolls.
According to Spotrac, the Cowboys carried $17,297,848 in dead money in 2013. With an adjusted cap of roughly $119.2 million, that 2013 figure represents nearly a seventh of the total cap. And that's not an isolated incident; the team is currently holding $11,809,439 in dead money in 2014, and that's before they cut the likes of or any other FAs, draftees or UDFAs to whom they give guaranteed money. And, as long as the franchise continues to carry huge chunks of dead money on the rolls, they will continue to put themselves at a competitive disadvantage.
This is why I am pleased (thus far) by who they decided to restructure - and who they didn't. Both Lee and Scandrick are 27, in the prime of their careers (many pundits say the "prime" years are 26-28). Both are currently signed until the 2018 season, which allows the signing bonus, which the base salary has been converted into, to be spread over the next four or five seasons. At their current ages, both are likely to remain productive through about three of the restructured years. Let's take a looksee:
- Cutting Lee in 2018 (when he's 31) will put $950,000 worth of dead money on the rolls; cutting him the following year will cost them zippo. So, his contract effectively pays him until he's 30, with another year should his body hold up.
- Similarly, releasing Scandrick in 2018, the final year of his deal (when he'll also be 31) will cost the team only $750,000. In effect, therefore, he's expected to play until he's 30, with a possible bonus season after that should his legs stay young.
In effect, both contracts are for the next three seasons, and will get both players to the age of 30, at which point they can be released with only a nominal penalty. In his recent list of fourteen free agency tips, (the article is behind ESPN's pay wall) former Bills, Panthers and Colts GM extraordinaire Bill Polian warns:
For virtually every position besides centers, QBs and elite WRs, you will see a downturn in production beyond age 31. So if you give an older player a five-year deal, it's likely you're going to be eating a lot of dead money. And you might not get equal production for the contract in the meantime.
Look at when the Lee and Scandrick deals are scheduled to close: just at or before the "downturn" Polian articulates. Jerry Jones considers Polian one of a handful of NFL confidantes; the Lee and Scandrick deals suggest that, perhaps, Jones has begun to listen to Polian's message.
Let's compare these deals to those of Witten and Carr. Witten currently has one of those "bad" contracts that I wrote about earlier. He will be 32 next season, and is signed through 2017. He has already lost a step or two (he hasn't caught a pass of 40 or more yards since 2011) and is unlikely to play to his cap totals in the next three years (2014: $8,412,000; 2015: $8,512,000; 2016: $7,412,000). While it would certainly be tempting to restructure his deal to reduce that sizeable 2014 total to something more in line with his expected performance, that would merely push most of that money into future years, thus swelling those totals - and in years when he'd be even less likely to play to his pay grade.
Carr is signed through 2016, with a player option for another year. Unlike Witten, he's still in his career prime; he'll be 28 during the 2014 season. Like Witten, he's costing the team more than he's worth ($12,217,000 in both 2014 and 2015, and $13,817,000 in 2016). As with Witten, pushing any of that money into future years would increase the $2,717,000 annual hit on future cap totals (from converting $13,585,000 of his base into signing bonus this time last season)
By avoiding the Witten restructure, the Cowboys can get The Senator to the point where they can release him without costing them too egregiously. If they cut him in 2016, it will accrue $1,824,000 in dead money; should they do it the following season, the hit will be $912,000. Given this, I'd bet that we'll see a slew of BTB articles in early March of 2017 saluting Witten and reviewing his stellar career (replete with repeated showings of his glorious helmetless run against the hated Eagles in 2007)
And it wouldn't surprise me to see them part ways with Carr in the same offseason. The former Chief can't possibly be released before then: it would cost the team almost $17 million in dead money to cut him in 2014, $12,151,000 to do so in 2015 and $7,434,000 in '16. In 2017, however, this figure drops to $2,717,000, a comparatively workable figure. Carr would be 31 at the time, right at Polian's magic number. The last thing the Cowboys need is to get cap relief now by guaranteeing that Carr will be past the career downturn and making something in the range of what he's getting paid now, in his prime.
If Dallas chooses not to activate either player's "escape clause," the front office can avoid that unsavory combination of financial over-commitment and declining skills that leads to what alarmist scribes term "cap hell." By opting not to pull either of those triggers, the team is taking its medicine now rather than putting it off until later. And that suggests that they want to get out from underneath the dead weight of dead money. From this vantage point, it smacks of (comparative) financial prudence.