The Dak Prescott deal and the implications for the Cowboys salary cap in 2021

Things went from a snail’s pace to supersonic in the Dak Prescott negotiations, as the Dallas Cowboys rather unexpectedly got a deal done with their starting quarterback on Monday. It was a huge win for Prescott, including a record $126 million in guarantees. The team benefits hugely by not having to worry for at least a few years about having to plunge back into the QB market in a league where legitimate starters are hard to find. As our Danny Phantom put it, this was a win-win for the parties involved.

Actually, that leaves out the third win. With the salary cap still expected to be lower this year, getting this done before the (current) March 17 deadline to get under the cap makes it a lot easier for Dallas to do what needs to be done during free agency. In essence, the structure of the contract as reported frees up over $15 million in space compared to the hit they would have taken under the franchise tag.

Admittedly, this still ate up all the cap space the Cowboys had before getting the deal hammered out. According to Over the Cap, they are now a bit more than $1.65 million in the red. But that is obviously a much easier number to deal with than it would have been if things had gotten to that March 17 deadline without a new deal in place. That would have forced the Cowboys to have Prescott on the books by using the franchise tag at that full price. While they would still have had months to get a new deal done, it would have severely restricted what they could do in free agency.

The team was never in dire straits with cap space. The top seven contracts outside Prescott’s gave them the ability to generate over $50 million in space through restructuring. That may seem like a lot of room to work with, but that would have had to cover not only all the free agent signings, but pay for the draftees coming in soon. $15.5 million in room is a lot of extra space to have. It may keep them from having to do all the restructures they have on the table, and also relieves any pressure to make some cuts just to clear space. That latter was not seen as a major consideration for them, but there are some other teams that are facing some truly hard calls there.

While the Cowboys have long been more than a bit resistant to investing a lot in free agents, they have to fill several holes before they go into the draft. The big ones are defensive tackle, cornerback, safety, and the all important long snapper job. They have some internal answers possible, especially LP Ladouceur if he is not looking to retire. But those extra cap dollars the Prescott deal created for them can go a long way this season. There are nine other teams that are further in the cap hole than Dallas. Because of the lowered cap and the fact that there is expected to be a big increase in the following years as new, massive broadcast, streaming, and now gambling deals are negotiated by the league, it is believed that both free agents and teams are going to be more inclined to one-year deals. Those are also likely to be lower cost than normal given that there just is not enough cap space overall for teams to invest.

It all adds up to a situation where the oft-lamented Cowboys approach of looking for bargains in free agency may actually be viable. There are already a number of good options at those positions of need for them, and more are expected to hit the market soon. With players basically looking for more team-friendly deals just to carry them through this highly unusual year, they may actually be able to stock up a bit on temporary fixes while using the expected ten draft picks they will have after the compensatory ones are added to bring in longer-term answers on cheap rookie deals. Then with the new revenue flowing in, and the expected return of fuller stadiums as the COVID restrictions are lifted, the cap costs pushed down the road by the restructures should be much easier to absorb and free agency money will be easier to find in the coming seasons.

Another benefit is that the team now has more clarity with Prescott’s contract sorted. One of the frequently and frankly misleading arguments often raised by Cowboys management is now obviated as well.

Clearly, there are still a lot of moves that the team has to make to set up for the draft. We can expect those to start rolling in soon. Actually, that has already started.

Expect to see a lot of that kind of less monumental activity in the coming days. The team has to have its house in order by the March 17 deadline.

While the obvious necessity to get their franchise QB locked up was the biggest driver, the arcane accounting of the salary cap was also a major incentive to finish the negotiations soon, and beating the franchise tag deadline just makes things easier for them. It was actually surprising how it got done. My expectation was that the sudden conclusion of the negotiations was going to happen, but not for another several days. Getting it done this quickly was a very pleasant surprise. We had to suffer through some really unnecessary drama getting here, but the eventual destination is quite satisfying.

Especially from a cap management perspective. In the long run, we can chalk this up as a win-win-win.