Tony Romo's Retirement Creates $14 Million Cap Space For Cowboys As Official Post-June 1 Release

When Todd Archer and Adam Shefter of ESPN broke the story of Tony Romo's retirement today, the started their story with a little nugget that has big salary cap implications:

The Dallas Cowboys have officially filed paperwork with the NFL for Tony Romo's release, making him a post-June 1 release designation, sources tell ESPN.

As a June 1 cut, a special NFL provision comes into play that allows the Cowboys to spread the cap hit of Romo's release/retirement over two years instead of one, thereby creating some extra cap space this year. To understand how much cap space the Cowboys will be able to create, we first have to understand how Romo's contract is structured.

Because Romo has had his contract extended and restructured multiple times, there are were three different prorated bonuses counting against the cap until last year, a signing bonus, an option bonus and multiple restructure bonuses, all conveniently summarized in the graph below.

By now, you're probably familiar with some of the numbers on this graph; Romo's $24.7 million cap hit in 2017 for example has been widely discussed. That cap it is the sum of his $14 million base salary in 2017 and the two prorated bonuses worth a combined $10.7 million.

When a player is released or retires, the entire unamortized signing bonus money (the remaining prorated bonus money) left on his contract accelerates immediately and counts against the current year's cap. In Romo's case, that would be $19.4 million in bonuses left on his contract (5.0 + 5.7 + 5.7 +3.2 = 19.4)

But if a player is cut after June 1 or is designated a "June 1 cut", only the 2017 part of the unamortized signing bonus counts against the cap in 2017, while the remainder counts against the 2018 cap.

In Romo's case, that means only the 2017 unamortized bonuses worth $10.7 million would accrue immediately (5.7 + 5.0 = 10.7) while the $8.9 million worth of unamortized bonuses for 2018 and 2019 (5.7 + 3.2 = 8.9) would only accrue in 2018.

With his release/retirement, the Cowboys lower Romo's cap hit from $24.7 million in 2017 to $10.7 million, a cool $14 million saving, though that would come with $8.9 million worth of dead money in 2018.

The only catch is that those $14 million in savings aren't available to the Cowboys until June 2.

The NFLPA currently shows the Cowboys with a cap space just $1.4 million, but that's before the $5 million from Doug Free's retirement hit the books. Combined, those $6.4 million should be enough to sign this year's rookie class - unless the Cowboys sign some more free agents before that. In that case, the Cowboys could create an additional $4 million by restructuring Jason Witten's recently extended contract, which should tide them over nicely until the $14 million from Tony Romo become available in June.

That puts them in good shape to get under the cap with their 53-man roster at the start of the season, and will provide ample room to sign more free agents after league-wide roster cuts or during the season.