The Cowboys continued their run of contract restructures with today’s restructure of DeMarcus Lawrence, creating $12 million in cap room by converting $15 million to a signing bonus.
This is the third major restructure of this offseason for the Cowboys. Prior to this move they converted $8.9 million of left tackle Tyron Smith’s salary to a bonus and $10 million of guard Zack Martin’s salary to a signing bonus. All told the three moves created a whopping $27 million in cap room.
However every time Dallas makes a move like this I get questions about big signings like Earl Thomas or Dak Prescott (you never know about Thomas and Prescott can’t be signed), but Dallas now has over $29 million in cap room. They didnt need these restructures for this year at all.
For some reason this is something that is completely being lost in some of the reporting on these restructures. The Eagles restructured Lane Johnson’s contract yesterday and the immediate reaction was that it was because of a raise for Jason Peters. The Eagles had millions in cap space and it had zero to do with that.
Most of these moves are coming down because some of the teams are currently being very proactive in maximizing their carryover to deal with cap issues next season when the cap is expected to fall by over $20 million. By converting salary to a bonus now the teams are essentially getting to double dip on conversions by getting a chance to maximize the cap room via restructure this year and next.
For example by restructuring Lawrence now they create $12M in cap room to carry over to next year while increasing his cap hit by just $3M, a net gain of $9M. They can turn around again and restructure his deal next year if they want to and gain another $12.8 million or they could just be happy with the $9 million. Dallas now has close to $30 million in cap room under the worst case cap scenario next year so they are in position to tag Prescott again which is the most important thing for them to be concerned with.
I have been surprised that more teams have not done this yet besides Dallas and Philadelphia. Partially this may be because of the pandemic and teams wanting to see if games will be cancelled or not (a signing bonus is a sunk cost even if games are cancelled), but I think this can give teams more clarity by doing this now, provided you are doing with players who would never be cut in 2021 anyway.
Players should be pushing for this as well. Getting the bonus protects you from the pandemic cutting a season short. It also can give you significant dead money protection on non-guaranteed salaries in the future. This is kind of a lost art in contract construction but dead money can be a good way to better protect a roster spot.
In any even think of some of these restructures as the year goes on a bit more critically as to what they might accomplish versus them signaling an immediate corresponding move (now go watch the Cowboys sign Earl Thomas to a 1 year, $12 million contract).
Jason is the founder of OTC and has been studying NFL contracts and the salary cap for over 15 years. Jason has co-authored two books about the NFL, Crunching Numbers and the Drafting Stage, which are widely circulated in the industry and hosts the OTC Podcast. Jason’s work has been featured in various publications including the Sporting News, Sports Illustrated, NFL Network and more. OTC is widely considered the leading authority on contract matters in the NFL.