It’s another summer and we have another Cowboys contract dispute getting a ton of attention, especially after some comments Jerry Jones made regarding some early extensions he wishes he had not done. However, the overall issue about extension timing goes well beyond the Cowboys and it is one thing that many teams do seem to get wrong. Let’s look into the numbers a little deeper.

When discussing situations like Dallas with Micah Parsons we are talking about superstar players in the NFL. While the contract numbers that are being discussed are gigantic and sometimes cloud the issue with the fans the fact is that teams simply do not move on from these players regardless of the cost. That is what makes situations like Dallas’ so ridiculous since the odds of them moving on from Parsons are miniscule at best and the end outcome is going to be a contract that makes him the highest paid non-QB in the NFL no matter when he signs.

If we look at every position in the NFL and look at the top 10 paid players, here is the breakdown of how many signed an extension or were tagged at each position.

In every case a team held the contractual rights to a top 10 QB, WR, CB when they did an extension. Edge is at 90%. It is only three positions where we fall under the 50/50 range- safety, center, and linebacker. If we pull the tag out of the equation we get the following:

Here you can see a few other teams do draw things out similar to Dallas and the tag does come into play but again the odds are strongly in favor of an elite athlete signing an extension.

What if we look solely at teams that drafted a player?

Again we are looking at only a handful of positions where the odds are worse than 50% of the player winding up on his own team. And these numbers can be misleading due to the age of some of the players on the list. For example at EDGE the top 10 includes Danielle Hunter who was a third contract free agent, Brian Burns who was traded as a franchise player on a rebuilding team, Montez Sweat who was traded from a team blowing things up, and Andrew Van Ginkel who is also a third contract type player.

None of these players are comparable to a player like Parsons but even if you wanted to make an argument that they are, does anyone see the Cowboys being in the Panthers or Commanders position of blowing things up? The point simply is if you have a young elite player on your team and you are expecting to be semi competitive you are going to sign that player.

Waiting to sign an elite player is pointless for many reasons. While there was a time where contract squabbles were somewhat substantial and both sides could win or lose in these type of fights, todays NFL pretty much always has the same result- the next elite player to sign  will be the highest paid player at the position. The next close to elite player to sign will be top 5 at the position. So by waiting all a team is doing is allowing the market to rise and thus the player cost to rise.

If you look at where the EDGE market was last year, when the Cowboys could have extended Parsons, it sat at $34 million a year. That was also the top number for non highest paid QB. Parsons was going to earn much more than that, but would he have hit $40M a season? Maybe, maybe not. Would it have topped $40 million a year?  Doubtful since he would have been the first ever “$40M a year non-QB” had Dallas signed him last season.

Right now the market stands at $41 million a season. That contract was signed by a third contract player and Parsons should be able to get some distance between he and TJ Watt the same way Nick Bosa years ago got a little distance from Aaron Donald. So in this particular case you are looking at the price likely going from a max of $40 million a season to now $43 million a year and counting.

There are also significant benefits for a team, besides that price tag, when it comes to getting ahead of the curve and getting a contract done. While I don’t fully believe that the only part of the contract that matters is the guaranteed part, the guarantee is one of the prime reasons that players hold leverages and teams lose flexibility. For whatever reason agents do not negotiate “new money guarantees” and instead focus on the total contract guarantee. When a player like Parsons signs early that actually reduces a team’s overall risk exposure since the team will get to include Parsons existing salary into the guarantee.

Right now the top guarantee would be Myles Garrett at $124 million and last year it was Bosa at a shade under that. Whether Parsons signed last year or this year the guarantee for him will be at least $125 million on an extension. If they go into next year it will again be at least $125 million. Last year Dallas could have rolled $27 million of “old money” into that total. This year its $24 million. If they wait it will be $0.

The early extensions can help with salary cap flexibility as well. The clock on an extension begins immediately when it is signed. For 1^st round picks that can give a team six or seven “active years” to work with right off the bat for bonus prorations. Effectively you blend the old and new contract together and you can work the numbers out to best benefit the team.

While the team is taking on risk by doing the early deal they are also putting themselves in a position with less effective guarantees and earlier bonus prorations of being able to get out from what turns out to be a bad contract. Jones brought up the name Trevon Diggs as an early extension gone bad, but the reality is the added year they had makes it easy for Dallas to move on next season (it is just $5.8M in dead money) and, had he not been injured and had an injury protection clause kick in, they could have walked away before this season without too much damage.  A tough pill to swallow? Sure, but it was better to be a year early than a year late and his situation pretty much represents a worst case scenario.

For the players who do pan out, the longer term deal also prevents you from getting leveraged the way Dallas was when they signed Dak Prescott to a $60 million extension that far surpassed the rest of the QB market and continues to be treated as an outlier by the other 31 teams in the NFL. Prescott’s prior contract was signed as a franchise player giving Dallas none of those extra years to work with regarding the cap. His cap numbers became so bloated that there was no real way to walk away from him, so one bad contract turned into two bad contracts for Dallas.

While the Cowboys have plenty of bad examples to draw from, if you do take a teamwide approach to contract extensions the good can (and should) outweigh the bad. It’s no different than outing together a stock portfolio. Some work, some don’t, The hope is the ones that work far outperform the ones that do not. Dallas was able to do that in the past with extensions for players like Tyron Smith who gave the team cap and cash benefits for years.

If you are running a team you simply have to ask yourself this. What are the odds of us trading a player or letting him walk as a free agent?  The data is that for all but a few positions those odds are very low. Unless you see yourself as the exception to the rule there is far too much to gain out of the early extension rather than just delaying the inevitable which is what the Cowboys seem to be doing now.