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One image that explains how Dallas is not in a "bad" salary cap position

The average NFL fan is in an interesting place regarding their understanding of the NFL salary cap - work by the media and others has greatly improved knowledge of both the mechanisms and functional workings of the cap, and yet it is still in some ways widely misunderstood. Sometimes, it's easier to just know little than to grasp much, but not all!

Perhaps the single biggest mistake fans (and some media folks) will make regarding the cap is to judge it based on the present-moment snapshot, as if it's a static entity. We know that the cap is flexible thanks to non-guaranteed money and cuts and restructures and the like, and yet that there is a disconnect between that knowledge the implication that the cap is very much dynamic and thus can never be fully represented by a single snapshot. Note that there is no finger-wagging in pointing this out; it's just something worth getting straight, because why not?

As a case in point, the Green Bay Packers just "found" $23.13M in cap space with three flourishes of the pen! More broadly, NFL teams that plan multiple years into the future two years ago were suddenly hammered with the prospect of having tens of millions less in cap space than budgeted (and not just for one season, but multiple), and yet not a single team struggled to make that work.

Many have seen that the Cowboys rank third-worst in present cap space - which literally speaking can't even be called "space", as it is a $21.2M overage - and immediately concluded "welp, they're in a bad cap situation". Not so, and why can we think that? Well, you saw the post's title - time to give you what you came for!

A Graph Of Cap Space *And* Cap Flexibility

Courtesy of an article by Sam Monson over at PFF.com (linked here; the article presents an offseason blueprint for the Cowboys and is worth checking out in full if you haven't seen it already!), here is a graph that plots both the present Effective Cap Space as well as the amount of Restructurable Cap Space for each NFL team:
FLut5enXMAIFYm6.0.jpegThere's no need to beat around the bush on this one: while the Cowboys have the third lowest figure for effective cap space, they also have the third-most money available for restructure in the NFL. Just like that, the landscape brightens a little.

Let's dive deeper:
-You'll notice that there is a line of best fit provided on the graph. It's best to not interpret that line as equivalent cap "goodness" as long as a team is somewhere on it; it's always better to be further to the right and on the line than to the left and on the line. I would venture that the functional "balance" line, in which placement anywhere on the line is a roughly average "cap situation" is steeper than this. The key point is to note that the primary reason Dallas has less available cap space is because it has more cap space currently assigned to players (more on that later), and thanks to the restructure flexibility that teams now routinely use that isn't a problem.

-Speaking of assigned money to players, take note that the graph includes the number of non-rookie players presently under contract. The Cowboys are tied for the fourth-most such players, which in part helps to explain why they have more money tied up in players already.

-Observe how the Eagles have more such players under contract than the Cowboys do, and yet also hold significantly less potential restructure money. That's why this exercise is so important; part of cap health is how much flexibility one has, and the Eagles have been using significant flexibility for some years now to navigate the cap waters. It's not an outright problem for them (you'll see in a bit why the now-anachronistic "cap hell" is not really the right label), but that notable reduced flexibility is why the Eagles, despite having many more millions in free space than Dallas, probably has an equal or worse "cap situation".

-Have you noticed that not a single team has less than $50M in restructurable money? That more than any other factor is why "cap hell" is a thing of the past; even teams with less flexibility still has loads of it!

-Not all restructurable money is created equal. Some is guaranteed money for weaker players who ideally would be excised from the team's cap entirely (as many would wish to do with a certain RB contract if it were possible) and thus is not the "healthiest" money to shift; some is non-guaranteed money for old or bad players who are likely to be cut, and thus can almost be penciled in as cap space right now and with no shift necessary; some is deserved upcoming salary by core roster players and thus isn't problematic to make use of.

-In case the implication of the prior bullet hasn't jumped out to you yet, that means any "cap health" exercise only starts by looking at these two items. The next step, one that is just as important, is to examine the form of restructurable money. Easy cuts are good for cap health and likely not bad for the roster (given that such players were likely already not helping much anyways), for example, and that is different than the restructurable money for an older-but-still-quality-performing player.

-A good way to look at this chart is to note clusters! A whole mess of teams on the bottom right are more wide open, and that is often the place for younger rebuilding squads; there is something of a vertical cluster around that average NFL cap space of $20M; the Cowboys are in a group that needs to free some space but has extra shiftable space available.

-If you want a sense of when cap health starts to truly make a difference, scan for the outliers. There is perhaps no worse cap situation than that of the Falcons, all alone in terms of having much less relative restructurable cap space while still already being in the red *and* having a mere 9 non-rookies on the ledger. There will be a reckoning in Atlanta soon, something that is generally already widely understood. Remember that nice chunk of change the Packers recently freed up? This graph is from before those moves, and it's notable that the Packers are so very deep in the red while having relatively less shiftable money available. It's one thing to have "work to do", but the Packers much more so than the Cowboys have some difficult decisions to make. And the Saints of course jump off the page with how much they need to cleave off their cap, though there is certainly plenty of money available. It'll be fascinating to see whether they try to minimize their talent losses or shift a higher percentage of movable money in order to keep the roster talent up!

An Aside: Why Cap Hell Doesn't Exist Anymore

With all the references to "cap hell" as well as the many declarations that it doesn't actually exists, one might wonder (especially among younger fans) whether this is the Bigfoot or Lock Ness Monster of sports financials, a larger-than-life mythos that never fades away but also never existed. Make no mistake: cap hell was once a very real thing, and was as bad as it sounds.

Without being overly comprehensive, for roughly the decade following the implementation of the cap in 1994 it was something of a financial wild west. A lack of long-term, practical understanding of how to fit contracts into a new cap world meant wider approaches for dealing with the cap, and an NFL league office that had yet to see how the cap could go wrong had yet to offer some tools for alleviating cap issues that we now take for granted. The goals of the cap were to encourage spending parity as well as guarantee a spending floor (an element of salary caps that is often overlooked), not to punish teams over the short term for minor overages. That's why the NBA modified to become a de facto "soft" salary cap, and why the NFL worked to offer more flexibility so that teams could make the numbers work without abusing potential loopholes.

Before that time, teams did indeed find themselves in situations when they had too much money on the books to get under the cap without hemorrhaging some desirable talent. That era peaked in the late 1990s (long enough after initial implementation that the effects of the cap were in full sway and teams had had enough time to screw things up enough to be painted into a corner) and into the early 2000s. No single occurrence better highlights what cap hell was all about than the 2002 Expansion Draft held for the new Houston Texans - the NFL openly encouraged that teams use that draft as a "get out of jail free" card by having the contracts of drafted players fully transfer to the Texans, including the remaining the prorated remaining portion of signing bonuses. That doesn't even happen when you trade a player! The Texans were also required to pick up at least $27.2M of 2002 contracts (good for 38% of the 2002 max cap), so the circumstances were clear: the NFL at the time had a cap hell problem, to the point that the league took advantage of expansion to help solve the problem.

25 former Pro Bowlers were made available to Houston, who ended up drafting 19 players set to make $47.56M in 2002 salary. Four were former Pro Bowlers; the single biggest talent shift came from the New York Jets, who lost Aaron Glenn (a 30 year old multi-time PB CB still in his prime), Marcus Coleman (a 28 year old CB who had totaled 12 INTs over his prior three seasons), and Ryan Young (a quality starting RT who was only entering his fourth year in the league and thus was still cheap).

Note: in a fascinating bit of trivia, all three former Parcells+Jets players would play for the Cowboys under Parcells. Again, the reason they were available in 2002 was due to cap hell created in part because Parcells liked his veterans (costlier than young players) and kept a short-term approach that implied "damn the medium term cap implications!" due to lack of understand or lack of giving-a-s**t. He took that same route with the Cowboys - these players included - which helped juice them up a bit but led directly to the not-cap-hell-but-limiting cap problems of 2008-2014 for Dallas. Yes, I'm still bitter!

Partly due to league-implemented tools of cap flexibility and part thanks to team picking up on clever cap accounting tricks and contract structures, the days of teams being painted into a corner are long gone. Mind you, the cap still matters in that continuing to "kick the can" down the road will tighten flexibility and eventually force either austerity or a rebuild, but teams can operate almost wide-open for as extended a window as they believe they have.

Why Dallas's Cap Situation Is Not "Good" (Or "Bad), But "Fine"

There are those who embrace the "bad" cap snapshot of the Cowboys as a legitimate terrible cap situation that will woefully anchor the Cowboys in 2022 and beyond; hopefully, this post has helped clear that up. But to their point, please don't take this correction to mean that things are great either. The truth is somewhere in between.

It is better to have more cap space than less, without a doubt - after all, cap space itself is a part of cap flexibility, and flexibility helps teams navigate the waters of football life, with its breaks and bad luck. And the Cowboys have enough cap tied into players that it will need to swallow up a notable chunk of cap flexibility, which before long will likely enter the Cowboys into the "annually making the cap work" stage for contending teams. Mind you, again, that that stage can go on for many years, but it's still better to not be in there than otherwise.

The most important item to understand about Dallas's cap is that it is approaching this stage ahead of schedule, directly due to the pandemic-lowered salary cap. The Cowboys had spent years of the 2010 restraining spending more than necessary in order to improve its cap health rather than simply hold steady, only to see it have to dip quickly back into that carefully-accumulated cap flexibility to make the pandemic cap work. That's nothing more than poor fortune. But the reason this isn't a "bad" thing is because the same was true for the bulk of NFL teams, meaning that Dallas didn't fall behind the league overall in its cap health, relatively speaking. The whole league shifted, but Dallas's place in the landscape didn't really. Perhaps the league will see some restrained overall spending as the cap grows from new TV money to help "pay back" the money "borrowed" from the future, or perhaps some teams will remain aggressive while others like the Cowboys might play it conservatively in order to regenerate cap health; either way, the balance will be about the same.

There is also a gigantic aspect of a cap situation that goes most overlooked in these discussions: the talent level and expected future performance of those under contract. Despite questions of coaching performance, despite an unmissable "off" second half by QB Dak Prescott, despite the OL and RBs sliding as the season went along, the 2021 Dallas Cowboys were the #1 DVOA team in the NFL for the season as a whole. In other words, no team played better than the Cowboys overall, whether it was by the Cowboy talent doing the heavy lifting to overcome coaching flaws or the overall coaching+playing effort being better than figured. Mind you, the Cowboys still dropped the ball in the playoffs, but being the top team for the season overall did not guarantee the team being off its game late in the year and into the playoffs, nor does being a top team guarantee anything in a single game against another top ten team. So it goes, and there are certainly some kinks worth trying to fix, but that doesn't take away from the 2021 talent level.

As for expected future performance, the single strongest factor there is a team's relative age - older teams are a threat to decline, while younger teams are more likely to hold steady or improve. In that regard, the Cowboys are quite well situated: shameless plug, I'll be posting a breakdown of Dallas's "age" coming soon, but for now know that the 2021 Cowboys were a roughly 76th-percentile-aged offense (higher is younger) and an 83rd-percentile-aged defense. That's not everything that goes into expected future performance, but that's definitely good.

The reason this matters is simple: part of a "cap situation" includes what a team has to do to be competitive. It's intuitive that a team with Belichick and Brady or a team with a young Mahomes at QB has less to otherwise build up to be competitive; and so by default, the better performing and more talented the roster under contract is, the less free or flexible cap is needed to get to where a team needs to go. There is no objective way to sweep under the rug the understanding that Dallas was less it needs to do than, say, average, and thus it needs less to be on an equal cap footing in terms of mission accomplished.

Putting it that way makes it just sound "good", which is why we finish up by circling back around to the work Dallas still has to do. And that involves two big things:
1) As of this moment, the Cowboys aren't even under the salary cap and are pending to net lose talent from last year's #1 DVOA team, so much of what has to be done is about efforts to hold serve with roster quality. Whether it be by retaining pending free agents or replacing departures in some manner, moves have to be made and some amount of the team's current available cap flexibility will have to be invested to enable that.
2) Whether a #1 DVOA team or not, a team needs to keep pushing to be both as strong as possible and as reliable and matchup-proof as possible. The 2021 Dallas Cowboys, as good overall as they were, clearly were less than ideal in this area, period. It would be possible for the Cowboys to take a step back in overall quality and yet actually have better chances of a true playoff run, if it is able to make adjustments that improve reliability and matchup immunity. And, of course, if that can be improved even as the team were to succeed to avoiding a roster quality slide - all the better and the sky would be the limit!

Something worth keeping in mind: the talk of moving on from Amari Cooper or Demarcus Lawrence goes beyond "cap casualties". As already established here, literal "cap casualties" no longer really exist in the way that they once did; there is always a way a team can manage to keep a player. Keeping or cutting a player is about cost-benefit analysis, and the Cowboys project (true or not) even more of a focus on that than most teams do. If there is "fire" behind the smoke of the talk around Cooper and Lawrence, it is because the team sees their cost and benefit combination as falling in a grey area, one in which they aren't slam dunk poor values but also might have their costs better allocated. There is nothing forcing the team's hand in their cases.

Final summary: yes, the Cowboys have work to do; the team's present cap requires major adjustments; the team has ample flexibility (and then some, and then some) to make those adjustments, so we need not fear on that any time soon; the team's biggest advantage is how strong it already was in 2021; a lot of work needs to be done to try to keep that up, and despite that strength it was an imperfect one that merits adjustments beyond overall quality. When one is in a positive place but needs to do a lot right to stay there, while that is hardly enviable or terrific it also isn't "bad". That's the biggest lesson of all to take here - in an NFL of parity and rapid rises and falls, each and every season is always a huge endeavor no matter how well or poorly the season prior unfolded.

Another user-created commentary provided by a BTB reader.