We have officially reached the halfway point of our best and worst contracts series with our look at the Dallas Cowboys.
Best Contract: Henry Melton
I tend to like contracts that might be considered a bit out of the ordinary, if I can find a benefit to the contract for the team. In the case of Henry Melton, I think there are many of benefits for the Dallas Cowboys.
Dallas lost their lone defensive star in 2013, defensive tackle Jason Hatcher, to free agency and desperately needed to find a low cost player that could step in and potentially fill his role. Melton can clearly provide the necessary performance if he has fully recovered from a knee injury suffered in 2013 and if he does that it will come at a bargain price.
Melton was a franchise player for the Chicago Bears last season and had been one of the better defensive tackles in the NFL. The change in defense in Dallas ignited Hatcher’s career and Melton is an easy fit into the Cowboys defensive scheme.
Dallas will only pay Melton $3.5 million in 2014, a very low cost for a potential top five player at the position. Of that $3.5 million, 35% is tied to actually being active for the team on the 46 man roster. That is important injury protection that the team needs for a player coming off injury. Tying the bonus to the 46 rather than 53 man roster is also important since it would prevent Melton from earning the roster bonuses if he was to be healthy enough to avoid PUP or IR, but not healthy enough to play on Sunday.
The contract is unique in that it contains an option that is truly an option and not an option bonus for the sake of salary cap maneuvering. The contract is two contracts in one. The first is the $3.5 million contract for 2014 and the second is a three year, $24 million contract, which is reasonable money for a very good defensive tackle. Dallas does not have to pick up the option until February, so they have all season to evaluate Melton. Picking up the option does not necessarily guarantee Melton’s salary for the 2015 season. That only occurs if he is also on the roster the first day of the league year. The option cost is just $1,000 so Dallas could simply pick it up to maintain a longer window for discussion on an extension that matches his performance level. If they don’t pick it up and Melton becomes a free agent then Dallas may be eligible for a compensatory draft choice due to the option exercise date being in 2014 rather than 2015.
Unlike many Cowboys contracts, Melton’s does not contain a large signing bonus. If he is released or his option not picked up, the Cowboys will only put $750,000 onto their salary cap in 2015. Melton can earn more in 2014 via playing time and sack incentives, but in general incentives are not difficult for a team and mainly just impact unused cap room if earned.
If Melton is healthy and plays well he’ll provide much more value than the older Hatcher. The two contracts are essentially identical in terms of overall cash flows, with Melton receiving slightly less front end money over the first two years, making him the lower cost alternative over the short term. The important distinction, though, is that Melton costs Dallas next to nothing to release in 2015 or 2016, while the Redskins are stuck with Hatcher at millions of dollars in dead money during those same years. This is because Melton’s contract value lies in year two versus Hatcher’s is in year one, with the majority coming as a signing bonus. With both players having question marks and one being much younger it’s very clear that the Cowboys made the right decision on who to sign to this size of a contract.
Worst Contract: Brandon Carr
The cap problems that have plagued the Dallas Cowboys in recent years are pretty well known. A combination of over payment on players, large signing bonuses followed by large renegotiation bonuses, and voidable years tacked on a contract for cap purposes, stripped Dallas of almost all their flexibility on the back end of player contracts. They have moved away from some of these tactics in the last year, making the most of the large salary cap increase, but one of the best examples of the problems the Cowboys created/faced is the contract of Brandon Carr.
Dallas signed Carr as a free agent in 2012 to a whopping five year, $50.1 million contract. Carr was a decent player, but I’m not sure anything about him warranted the money he received. Carr had never been to a Pro Bowl, was a lower round draft pick, and had eight career interceptions in four years with the Chiefs. He peaked at the right time, with four of those interceptions coming in 2011 and posting solid coverage numbers that year, but I always feel that expecting peak performance to occur again is never a good option.
Dallas clearly expected it when they signed Carr. Carr received a full guarantee of $25.5 million upon signing his contract. At the time that guarantee was larger than Nnamdi Asomugha’s guarantee with the Eagles and it still remains the highest among corners in the NFL. The $10 million received by Carr seemed to a wakeup call to teams about the money being spent on the position. Though his overall annual value was exceeded in 2014, he still marks the high end for a lower quality number 1 corner on a team and it seems as if his is the contract number teams do not want to exceed.
In terms of contract structure, the Carr contract is very player friendly. Carr received a $10 million signing bonus that would give him a fair chance at earning his $8 million salary in 2014, the third year of the contract. However his contract contained a balloon payment of $14.3 million in year two, which the Cowboys never could absorb on the salary cap. This payment was essentially the same as having a second signing bonus (or first option) in the contract. Because of Dallas’ cap troubles they added a voidable year onto the contract to lessen his cap charge in 2013 from $16.3 million to just over $5.4 million.
That mechanism has not only made Carr’s salary cap numbers extremely high but given a great deal of dead money protection in the contract. Carr, if cut in 2015, would leave Dallas with $12.151 million in dead money to account for. In 2016 that number will still be high at over $7.4 million. He is now in a position to earn the full $50.5 million on the contract. If he did that Dallas would still have $2.717 million left on the books.
Carr has the highest salary cap charge of any corner in 2014 and is second only to Darelle Revis’ $25 million cap charge, which will never occur, in 2015. In 2016 he has the third highest cap charge in the NFL at the position. Carr is far from being the third best corner in the NFL, but he’ll be there from a cap perspective for the foreseeable future due to the contract he negotiated.
2013’s Best and Worst Cowboys Contracts:
2013 Best Contract: Justin Hatcher (Contract expired; Signed with Redskins)
2013 Worst Contract: Jay Ratliff (Released during 2013 season)
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