Cowboys 2013 Roster Talk, Part 1: Grasping The Salary Cap Concept

We all know, or believe we know, the situation that the Cowboys are in. They are pushed firmly against the salary cap ceiling and have plenty of holes they need to fill to make a leap from their 2012 production levels. There's a laundry list of free agents that will most likely not be brought back to the team next season. They have only six draft picks as they traded away a seventh for C Ryan Cook, and it's doubtful they see any compensatory selections because their signings outweigh what they lost. So where does all that leave them?

It leaves a team with some maneuverability, but mostly with hope that sidelined players return from injury and that young players make big leaps forward to improve the team's talent base.

Quite frankly, that's the position the Cowboys find themselves in. I've reported on the social media accounts (follow us @BloggingTheBoys on here on Facebook) that the team believes that it will be able to make whatever room necessary to sign a couple big ticket free agent contracts. It is widely believed that this will be done based on reshuffling some of their current contracts.

I see on Twitter over and over again, fans inquiring about what happens if "Player A" is cut or traded. How does that work? So I figured I'd put a little piece together on those subjects before diving into moves I would make if someone asked me.

The salary cap ceiling for 2013 is scheduled to be just under $121 million, as it was in 2012.

First, I want to discuss a concept that is new to the NFL, via the most recent Collective Bargaining Agreement: Salary Cap Carryover. The Carryover basically allows a team to take unused cap space, and push it forward onto the following year's cap. In years past, you'd see teams use available space before the end of the season in order to reduce impact on future caps. Now, teams can simply plan ahead. $10m under the 2012 cap? That means that the 2013 cap for your club is $10m higher. The Denver Broncos were able to carry over $27 million from their 2011 cap and that allowed them to sign Peyton Manning. Unfortunately, as we all know, Dallas doesn't have it so good.

I honestly don't know if Dallas has any carryover money going into 2013. The websites we use to check on salary information: Spotrac and Rotoworld, don't have all of the information necessary to build a model for ourselves.

Dallas has had two salary cap problems in recent years, in my humble opinion. First, dead money. Dead money is salary cap space that is eaten up by players that are no longer on the roster to help the team. This occurs when players are cut, but still have prorated cap hit money that was tied into future years. If a player signs for five years, his signing bonus (paid as the ink dries on the contract) is prorated over the five years of the deal. If said player is cut after two years, the remaining "proration" accelerates into that years' salary cap. Designating a cut player "June 1st" allows the team to eat one year of the proration in the upcoming year and the remaining proration will hit on the following year. For example, Dallas cut Leonard Davis before the 2011 season. He still took up space on both the 2011 and the 2012 salary cap.

This brings into play the second problem, player renegotiations. Recently, Dallas will commonly restructure a player's deal in order to make room on the current year's cap. They do this by signing the player to a new contract, complete with a new signing bonus. This helps because it allows them to greatly reduce a player's base salary. The player loves it because they can get a year's salary in one check over the summer and still get some (smaller) game checks each week.

But that player was already given a signing bonus that was being prorated (the CBA limits proration to 5 years, regardless of the length of the contract). Now that player adds basically a years' salary to that proration.

Say you sign a player to a seven year deal with a $15 million bonus. Each of the first 5 years, that player's base salary plus $3m ($15m / 5) will count against the cap. Say that players base salary for Year 3 is $11m. They were going to count $14 million against the Year 3 cap. Now the team needs room to sign other players and restructures the deal of said player.

The restructure gives the player a new base salary of only $1m but a new signing bonus of $10m, and leaves years 4-7 the same (not possible because of salary increase rules, but for explanation purposes just go with it). Now that player costs the team only $6m against the current cap ($1m base salary, original $3m SB proration, $2m restructure SB), even though they are pocketing the exact same money for the season. The team now has an additional $8m of salary cap space to sign other players.

All good, right? But what happens if you now want to move away from said player after he bombs in Year 3? The salary cap hit is now much more costly than it was before.

Before he was restructured, that player would "only" count $6 million in "dead money"; the remaining two years of his original signing bonus proration. However, because of the restructure, the team now has another $8 million, total $14 million, of salary cap hit for the player.

In theory, this doesn't hurt your team if a team does this with players that will stay on board for the entire length of their contract. However, the team has to be capable of identifying players that will do so. Giving out contracts to aging players is only superceded in it's damaging nature by restructuring players that are declining. It is this situation that Dallas finds itself in with some of their current guys and unfortunately I believe this is what they will have to do in order to make room for new blood in 2013.

For the record, a traded player counts against the salary cap exactly the same way that a released player does. The original team is still going to take a cap hit for the signing bonus that was paid out originally.

I am obviously no cap expert. It's possible that a team can continuously make these moves, sign whomever they want and still remain under the cap year in and year out. I'm doubtful though, seeing that Dallas could only afford Brandon Carr last offseason and didn't make a play at one of the big ticket guards like Carl Nicks or Ben Grubbs. Of course, the Mara penalty had a lot to do with the wiggle room Dallas had after restructuring a couple guys so that has to be taken into consideration. If there are folks better versed in this that would like to share their viewpoints I welcome them with open ears.

Owner and GM Jerry Jones knows what it's like to be in full rebuilding mode due to salary cap hell. It's what led us to three consecutive 5-11 seasons under Dave Campo. Jones feels that this team has enough star players to avoid all of this for as long as possible, and the restructuring allows him to do so.

Time will tell whether or not this strategy will either result in a Super Bowl caliber team, more mediocrity or a Valley Ranch version of a fiscal cliff.

Coming Soon, Part II: Early Offseason FA & Draft Wish List With Premature 53 Man Roster