Cowboys’ cap space problem is a myth heading into 2021

We are hearing it almost continuously. The Dallas Cowboys have a big cap space problem this year. Stephen Jones is hardly the only one making this point, but he almost certainly is the most important. Working out contracts and managing the cap is seen as mostly his responsibility in the organization chart. The big issue they face is a looming and very large contract with Dak Prescott. (We are not even going to discuss the idea of letting him go in free agency, because that would be pure management malpractice.)

There’s one small problem with that take about the cap. It’s all a lie.

Yes, on the books, the Cowboys don’t have much space to work with. According to Over the Cap, they only have $13.9 million to work with currently. (Spotrac has them slightly higher at $17.7 million, but we’ll be using some other numbers from OTC, so we’ll stick with them.) That is not even enough to get Prescott re-signed, and certainly not enough to tag him a second year.

So how much more money will they need just to ink their quarterback? Well, it all depends on how big the contract is. Even more important is how they structure it. While we have no idea about the eventual shape, I have done a quick and easy projection. This is for a four-year deal, because the Jones family will have to cave on that five-year thing unless they want to pony up a lot more money. It is for $180 million total and includes a big guarantee of $115 million. Here is how that could shape up.

Most of the guarantee is in that signing bonus, ant the rest comes from making the first two years of base salary guaranteed as well. Now the Cowboys only have to get to $25 million in cap space, and they can easily make it less with some more manipulation such as bigger base salaries in the out years, a smaller bonus, and different ways to put the guarantees in. If they can get a less expensive deal (and this is a high-end projection) then that will also let them lower the cap hit.

That still means they need to find some more space. As we should all know by now, Dallas is quite willing to use the tools at their disposal. If you use OTC’s projected cap savings just through restructuring, there are nine contracts that offer significant savings. If they went all the way and restructured those top nine contracts currently on the books, they could create about $61.4 million in space. That will allow them to cover Prescott’s cap hit under a new contract, with something like $50 million for things like free agency.

There are other ways to generate a bit more. If they extend rather than restructure someone like Amari Cooper, they can squeeze about another million. And there are more savings with a couple of possible releases. One might be Tyron Smith, who may have more severe injury issues than the team is prepared to move forward with. He might also retire, which would have the same cap impact. If he were released as one of the two post-June 1 cuts they are allowed to designate, he would net them an additional $3.43 million. Jaylon Smith has also been discussed as a possible release, and he would add $2.2 million more than he would through restructuring.

This should allow them plenty of money to make some badly needed free agent signings, as well as allowing them to cover their draft picks, which are much lower cost.

At this point, many are getting concerned about the idea of kicking that old can down the road. What has to be kept in mind is that the current contracts for broadcasting and streaming NFL games will all expire by the end of 2022, with Monday Night Football deal ending after this year. Those are expected to go up by quite a bit as the NFL continues to be one of the biggest money makers available - probably the biggest there is. In essence, the can just shrinks over time as the overall pie grows for the league, which is always looking for new platforms to sell rights to as well.

Besides, this is now just a way of life for most of the league. Remember that overall cap figure that OTC projects for the Cowboys? There are currently only twelve teams that have more at this point. Fourteen are in negative figures, with the New Orleans Saints facing a whopping $112 million deficit that is going to force a lot of contracts to be shed. The beloved Philadelphia Eagles are in the second worst shape, largely because of the Carson Wentz contract, sitting over $53 million in the hole. The Cowboys are going to have a lot of company in having to manipulate the figures.

All this is based on a projected cap this year of $176 million per team, and there is speculation that it may be higher. That would just make things easier on all. And for Dallas, if they can come to terms with Prescott and his agent for a lower figure, that is even better.

But even in the worst case scenarios, there are plenty of places for the Cowboys to find more space under the highly fungible accounting tool knows as the salary cap. They will. And much easily than many teams.