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Do The Dallas Cowboys Mismanage Their Money?

The Cowboys are once again up against the cap with free agency having commenced. Is that because Dallas has mismanaged its money?

Divisional Round - Green Bay Packers v Dallas Cowboys Photo by Joe Robbins/Getty Images

Bob Sturm recently wrote an article railing against the Cowboys for how they are up against the cap once again at the start of free agency, which will mean the team will be unable to keep most of its 18 free agents, including Ron Leary, Terrance Williams, Brandon Carr, Barry Church, Mo Claiborne, Terrell McClain, and others. Indeed, Leary, Church, McClain, Jack Crawford and J.J. Wilcox have already signed elsewhere, and more are likely to go soon. The Cowboys were able to retain Terrance Williams and Brice Butler.

Here’s the meat of Sturm’s claim.

Now, there is one thing that I continue to be dissatisfied about, and that is the way they write their contracts. They do not write contracts that they intend to honor as written. They write contracts to allow them multiple restructures to accommodate other contracts that they have already restructured to make room for contracts that they wrote before that were restructured. And so on and so on and so on. There was some back and forth on this behavior this past week when Stephen Jones again defended the fine art of credit-card juggling.

They have so much dead money on Player A, that they must restructure Player B to free up the room. But, then, Player B cannot be cut because he isn't very good anymore, since the restructure guaranteed money for him in Year 3 of his deal (because of Player A's situation), so now we must restructure Player C's deal to accommodate Player B, who is only in his spot because of Player A. It is maddening. But, perhaps not as maddening as knowing we have all be desensitized to it as a poor way of doing business.

There are media folks who tell us "everyone does it", which is sort of true, but not. Yes, everyone you know uses credit cards. So, you can justify your credit card use by looking around the room and seeing everyone uses them. But, does everyone open up new credit cards to pay off the old ones? Does everyone max them out and have to sit out shopping because of the unpaid balances?

The Cowboys are doing better, but a sign that they are still in a weird spot is that they definitely need to retain some players, but in order to do so, they have to figure out how to restructure more deals to make even a little room.

In support of this, he uses three examples: Tony Romo, Tyrone Crawford, and Jason Witten.

Is Sturm telling the truth, or is he off-base? There is some truth to it, but he may be overstating the case. Let’s delve into it a bit more.

Going into 2017, there is almost no “dead money” on the Cowboys’ books. Brandon Carr has a $2.7 million dead money charge, but after that, the total is just over $300,000 spread over 12 players. $3 million total in dead money ranks the Cowboys 13th in the NFL.

This will change dramatically when Tony Romo is traded or released, so let’s look at Romo’s contract below, along with the other two players he cites.

Tony Romo

Romo’s contract was too large when it was signed, and it was made worse when it was restructured more than once to push money down the road. At this point, Romo’s 2017 cap value of $24,700,000 is the highest in the NFL. It’s not much higher than Washington will have to pay Kirk Cousins by franchising him for a second year in a row, and it’s within $5.7 million of 13 other NFL quarterbacks whose cap hit is $19 million or more in 2017. Still, it’s too high for a quarterback of Romo’s age and injury history.

In defense of the Cowboys, when Dallas signed this contract, they didn’t expect to have Dak Prescott, or any young quarterback show the ability to play as well or better than Romo in such a short period. So while Romo’s contract has pushed Dallas’s cap hit up significantly, it was seen as the necessary price of fielding a quarterback capable of taking the team deep into the playoffs.

Because of Dak Prescott, Dallas will now be able to rid itself of Romo’s contract. They will have to take a dead money hit of $19.6 million, which will be painful for sure, and push Dallas to #1 in dead money this year. But this will be counterbalanced by having a young starting quarterback due to make only $2.1 million over the next three seasons. Dallas will quickly go from devoting the most money to the quarterback position to spending the least. A stroke of luck to be sure.

Tyrone Crawford

Crawford’s contract is also expensive, averaging $9 million per year over five years. This makes him the eighth highest paid defensive tackle in the NFL, and the same ranking if he’s classified as a defensive end. Given his production, there is little doubt that he’s overpaid at this point. But Dallas couldn’t have easily known that when it re-signed him. And it’s hard to blame his contract as the reason Dallas is up against the cap.

When your team cap number is $162 million, overpaying a defensive tackle/end by $3-4 million a year isn’t the reason the Cowboys don’t have a lot of money entering free agency.

Jason Witten

Sturm’s last example is Jason Witten, who does have a cap hit that’s far too high at $12.2 million. This is because he’s been restructured over and over again to push cap money into future years. This year, that restructured bonus is $4.82 million.

The problem with Sturm’s case is that the Cowboys could alleviate that hit if they wanted to extend Witten’s contract for another couple of years, and if Witten were to agree to a lower salary in the twilight of his career.

Even if Dallas doesn’t take that route, the $4.82 million in restructured bonus is significant, but it doesn’t explain Dallas’s cap situation.

Good players on second contracts

The reason Dallas is up against the cap is the money they are spending on: Dez Bryant, Tyron Smith, Travis Frederick, Doug Free, Sean Lee, Orlando Scandrick, Cedric Thornton, and Cole Beasley, and will spend on Zack Martin once he is extended. A complete rundown of cap hits can be found in my recent article here. Romo, Crawford, and Witten are part of that group, and can be targeted as overpaid because of their age or lack of production commensurate with their pay. But it’s hard to say that Dallas made a huge blunder with any of them.

Dallas has paid to retain its best players, Romo, Crawford, and Witten among them. Those players helped lead Dallas to 12-4 and 13-3 records in two of the last three years. The Cowboys have spent a lot of money, and have fielded competitive teams. “Money mismanagement” is a claim that is often leveled against the Cowboys, but no team is perfect, and the examples cited, while salient, do not prove the charge.

Moreover, after this season, Romo’s big hit will be gone, and Witten will never have a similar cap charge again. Dallas will also get several compensatory picks in 2018 after losing free agents this year, which will infuse the team with young and cheap talent.

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