Looking at the Cowboys Contract with Ezekiel Elliott

The numbers are now in on Ezekiel Elliot’s 6 year, $90 million contract from ESPN’s Todd Archer so let’s break the deal down.

Cash Flows of the Contract

This is a pretty straightforward contract that simply takes the most recent top of the market contract and slightly builds on it. Essentially it is what we are used to seeing happen with quarterbacks when each newly signed player jumps the last by a few dollars. Here is the new money breakdown by season.

Player Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
Ezekiel Elliott $15,100,000 $24,700,000 $37,100,000 $48,000,000 $58,000,000 $73,400,000 $90,000,000
Todd Gurley $15,000,022 $28,050,022 $37,050,022 $47,050,022 $57,500,000  – – 
Le’Veon Bell $14,500,000 $28,000,000 $39,500,000 $52,500,000  – – 
David Johnson $12,000,000 $18,750,000 $30,000,000 $39,000,000  –  – – 

For the most part Elliott will outearn Gurley by $100,000 over the prior existing years of the contract, $50,000 by the 2nd year of the deal, $100,000 by the 3rd year of the deal, and $500,000 by the 4th year of the contract. That is when Gurley’s contract ends. Those two contracts are really in a class all by themselves compared to the other players.

There are two differences here which do work in Dallas’ favor. One is that they they do get a nice discount through the first “new year” of the contract, which is the 2021 season. They will pay Elliott $3.35 million less than the Rams will Gurley over the same timeframe. I think this is important for two reasons. One is that Dallas does have a number of free agents coming up and while I don’t anticipate them being cash starved this does give them more room to work with their current players. The second, and more on this in a minute, is that there is a fair reason to believe that Elliott will void his guarantees at some point so the less money paid early in the contract the more that will be saved overall.

The second difference is that Gurley does have $2.5 million in escalators in his contract that can increase his salary on the tail end, which I do not believe that Elliott has. Gurley has already earned $1 million of that so his potential earnings should exceed Elliott’s over the same timeframe. If I am wrong and Elliott has escalators than this is not something in the Cowboys favor and simply continues to mimic the Gurley contract.

Guarantee Structure

Again we have a contract that more or less mimics Gurley’s guarantee dates with Elliott receiving guarantees on his 2021 salary by being on the roster in 2020 where his salary was already guaranteed and then guarantees on his 2022 salary in 2021 when his salary is already guaranteed for that year.  Those are very favorable guarantee structures for a player because it creates a situation where you are paying a lot of money to a player just to make sure his salary the next year does not exist.

Effectively what it means is that Dallas would have to pay Elliott $19.8 million in 2020 to avoid his $9.6 million 2021 salary from guaranteeing or $9.6 million in 2021 to prevent his 2022 $12.4 million salary from guaranteeing. The odds of that are slim and none.

That said the way the salaries work do benefit the Cowboys as to where they are after 2020.

Elliott Gurley
Fully Guaranteed At Signing $28,052,137 $21,950,000
Fully Guaranteed Year after Signing $37,652,137 $40,000,000
Fully Guaranteed Two Years After Signing $50,052,137 $45,000,000

While in most cases I would say that this slight difference in relatively meaningless I look at Elliott similar to the way I look at Le’Veon Bell, although for different reasons. Guarantees in NFL contracts are easily voided in most cases. At the very least a NFL suspension for any reason would void the guarantees in a contract. If Dallas got very aggressive with Elliott you could probably find a way to void a guarantee for being in the wrong place at the wrong time and having an incident reflect poorly on the organization.

If the guarantees do void then Dallas has the potential to escape at an earlier date either via a release or a renegotiation. Again not likely but Dallas has built in a better structure for that purpose than the Rams did.

Other Contract Mechanism Comparisons

Both Gurley and Elliott received essentially the same prorated bonus money. Prorated bonus money is the stuff that sticks to the salary cap as dead money in the event that a player is cut so the more the better for the player. Gurley received $21 million while Elliott will receive $20.5 million as a signing and an option bonus. For the Rams the $21 million should give them more protection in the event of a contract breach since signing bonus prorations can be recaptured. Recapturing option bonuses are more limited in scope and Elliott has a $13.5 million option.

Gurley’s contract is stronger in regard to roster bonuses where he has millions coming his way either for being on the roster in March or reporting to training camp. These are harder to recover in the event of suspension whereas Elliot’s salary, all base salary other than the two prorated bonuses, would all be lost on a proportionate basis if suspended. These are minor things but stronger for Dallas than LA.    

The Salary Cap Consequences.

While the cap charts for Elliott may look like there are early escape points there really are not. Barring a suspension there is no reason to think that Elliott will not earn his $50 million. The cost to cut on the salary cap in 2020 would be a whopping $25.8 million. If he is on the roster in 2020 than the cost to cut in 2021 grows from $14.9 million to $24.5 million. Once on the roster in 2021 than the cost to cut in 2022 grows to $23.2 million. This is all because of the favorable vesting schedule on his base salary guarantees. If Dallas negotiated 5th day of the same league year vesting dates those 2021 and 2022 years would be $14.9 and $10.8 million during the offseason which are not great but doable. So unless the guarantees void for some reason his cap hits of $13.7 and $16.5 million will happen in 2021 and 2022.

The true exit year of the contract is 2023 when his dead money is just $6.7 million on a $15 million salary cap charge. If his performance declines by then it is certainly feasible to release him or renegotiate a lower salary at that point with no problems.

One thing in looking at this contract is that Dallas should make 100% certain they never touch it for cap relief. Right now 2023 is a viable escape. Its not if they start converting salary to bonuses in 2021 or 2022. Due to the large prorated bonuses this should immediately be moved to the never restructure pile.

The Six Year Length

The contract runs 6 new years which means Dallas controls his rights for 8 years. I have seen some people say that this was a big thing for Dallas since the longer you control a player the better but with a running back I don’t think it matters. The odds of Elliott being effective at this salary level for 8 seasons is very slim.  Basically those added years allowed them to hit a $15 million rather than $14.5 million annual value, but other than that there is really nothing gained or lost by either side for doing the long contract.

The one area where it could benefit Dallas is with Dak Prescott and Amari Cooper. Dallas has strongly favored long contracts for their players that run much longer than NFL norms. This is the case for all their contracts and is the case with Elliott as well. By doing a long deal with Elliott that should allow them to continue to stand their ground on looking for a long term deal with the other two players.

What Took So Long

In seeing how the deal shakes out there is absolutely zero reason that this should have taken all of camp to accomplish. It is too close to the Gurley deal for this to have really been an issue. I don’t know if one side or the other was just being unreasonable but if the contract looks very much like another NFL contract it is one that should not take that long to complete.

Alternative Course of Action

Had Dallas played out the franchise tag process the contracts would likely have been able to tag Elliott at charges somewhere around $11.5 million in 2021 and $13.8 million in 2022, which also would have been his cap charges in those years, both of which are lower than his current cap charges.  He will earn about $12 million more by playing on a contract than going through the tag process, assuming of course the tag doesn’t change in the new CBA.

The tag process is the optimum way to manage a running back but it also creates a constant headache with an unhappy player which can spill into the locker room as well.

In my mind Dallas only had two courses of action. Either do what they did and do a big deal now or fight for four years about the tag. By doing the deal now Dallas basically folds $13 million of virtually guaranteed existing salary into a new contract and gets the benefit of prorating now rather than years from now making it harder to cut. That’s why waiting until 2020 or 2021 to extend makes no sense.

The tag process is easier said than done. The option year is more or less a tag and we see how that is working out for the Chargers and Melvin Gordon or how the actual tag worked out with Bell and the Steelers last season. With so many free agents coming up I can understand why that wasn’t a pathDallas wanted to follow .

@ZackMooreNFL Projects Dez Bryant’s Contract

If you enjoy the analysis in this article, please e-mail Caponomics @ gmail.com to join the e-mail list.

As of right now, Dez Bryant will be playing for the Cowboys on the $12.823 million franchise tag and would lose about $754,000 for each game he misses were he to hold out. After speaking with the great @Jason_OTC, the Wizard of OTC, he stated that it sounds like Bryant is looking for a deal worth $16 million per season and that his guess is that Bryant is looking for a deal worth $16 million per year, plus $50 million in guarantees, but he’s not sure on the length of the contract.

Continue reading @ZackMooreNFL Projects Dez Bryant’s Contract »

La’el Collins Signs With Dallas Cowboys

It was quicker than I expected, but today the La’el Collins saga comes to a close after he signed with the Dallas Cowboys on a three year contract worth $1.6575 million. The contract is fully guaranteed and which puts him on par with a second round pick in that metric. This was one of the more interesting situations we have seen in the NFL with a player expected to be a late first or early second round pick falling entirely out of the draft because of an off the field situation that he may not even have any involvement in.

Dallas was able to offer Collins sligtly above the minimum salary in the final two years of the contract because of the way the NFL calculates their total rookie pool. Though teams are limited in their first year payments to players, every players maximum contract value is based on the 25% rule. For those unfamiliar with the rule, the rule limits all rookies from having their yearly cap charge increase by more than 25% of the first year contract value.

Teams honor the 25% rule to the maximum level for all first and second round picks, but never do so for their later round picks. Since those picks do not reach their maximum value there is money left over to be spent in future years on undrafted players. Collins’ salaries in the final two years of his contract will rise by exactly 25% of his $442,000 2015 cap charge. All told that allowed Dallas to offer him about $75,000 more in contract value, though any team in the NFL could have done that (and possibly a bit more) so it was not what made the deal happen. It will be interesting to see if in the future more lower level players and UDFAs push for added money in their later contract years now that one team has shown a willingness to do so.

The Cowboys present a unique opportunity for Collins for a few reasons. They can play him at left guard over Ronald Leary, who is in the final year of his contract, or possibly over Doug Free who just re-signed but is 31 years old and likely expendable next season. So thats two spots likely open for him. Secondly we have seen Dallas in the past be willing to do early deals with players like Tyron Smith and Sean Lee which should open the door for Collins to earn that early extension that I discussed should be so important for him.

Collins will be a restricted free agent in 2018 and, if he is good, should earn a second round tender. That will be worth at least $2.7M by the time he is eligible so in actuality I would view this contract as a being worth $4.3575 million, which is essetially what he would have earned as the 52nd pick in the draft. He’ll earm more performance based pay if he plays over the next three years (the top earner last year received $373,000) than those 2nd round picks as well. The differential there likely bumps him to around the 49th pick in the draft. Dallas also has no state income tax which could be used to help compare deals as well.

His gamble to say he would not sign if drafted seems to have helped scare teams off in the draft process. Seeing how quickly the Cowboys signed him makes me think that the fear of not signing was as much of a threat as anything else. In the end it was better for Collins to be a UDFA where will receive almost everything he wanted. While he misses out on the first round of the draft he is getting second round money and a second round guaratee with more upside for free agency. He’s going to have to be good to reach that upside, but all things considered this is a story that is seems to have ended well for him.

Greg Hardy Suspended 10 Games

The NFL announced that Cowboys defensive end Greg Hardy will be suspended for the first 10 games of the NFL season. Hardy was signed this offseason as a free agent, but the Cowboys protected themselves in the event of this suspension, a suspension that Hardy is likely to challenge in the coming weeks. I’ll take a brief look at what this means for the Cowboys salary cap.

Hardy’s contract had four elements to it, three of which were pertinent to his cap charge the year. Of those components his workout bonus of $1,311,600 will not be impacted provided he reports to all offseason activities. He had a $750,000 base salary of which he will now only earn 6 weeks worth of pay, reducing that number to $264,706 for the season. Hardy had $9.25 million in gameday active roster bonuses which now will have a maximum value of $3,468,750.  He also had not likely to be earned incentives which at this point should be impossible to earn. That should mean his maximum cap charge this year will be $5,045,056.

Hardy’s current cap charge of $3,217,850 should not change until September 5 which is the date the suspension officially takes effect. At that time his cap charge will drop to $2,732,556, which will represent the loss of base salary due to the suspension. I believe that number will hold until Hardy’s suspension ends and he plays in two games. After that Hardy’s cap charge can then rise by an additional $578,125 for every game he is active. If I remember correctly Hardy’s roster bonuses are tied to actually being active so its possible Dallas could avoid a few weeks payment if they request a roster exemption for Hardy once his suspension ends.

By the time Hardy returns he will essentially have missed a year and a half of competitive football and it may not be as simple to just fit him into the system for a late run.  I would expect because he missed so much time that Dallas will ask him to play extensively in the preseason even though it will be against far inferior competition. Once the preseason ends he can’t participate in activities to be ready for the season. I would also venture that if the Cowboys season heads in the wrong direction they might release Hardy rather than wasting $3.7 million on a playoff run that doesn’t exist.

This suspension now makes it more realistic for Dallas to trade for Adrian Peterson of the Vikings. Prior to the suspension the Cowboys had to account for the possibility that Hardy would take up $11.311 million in cap space, an additional $8.1 million over his current figure. Now they stand to lose just $1.8 million. The team currently has, by my estimates, $12.25 million in room. That would still leave them with some work to do with the cap to bring on Peterson, but it is a much easier path now than before.

Should the Cowboys Pursue Adrian Peterson

One question that is consistently coming up on my Twitter feed or in my email inbox is “how can the Cowboys afford to get Adrian Peterson”.  Dallas has been linked to the Vikings running back for the last year and Peterson has made it very clear that he no longer wants to play in Minnesota. The Vikings hold his rights for the next three seasons and would likely trade him before releasing him, but can Dallas really fit him in their salary cap?  Let’s explore.

The Peterson Contract

Peterson is set to earn $45 million in non-guaranteed salary over the next three years. That includes a $13 million salary in 2015. Normally I would have said nobody in the NFL would consider that salary and Peterson would need to take a stiff pay cut, but given decisions made by the Seahawks, Eagles, and Bills I can’t consider that to be the case anymore. Since the Vikings have shown a willingness to keep him at his current $13 million salary and Peterson is not moving off his stance for a trade it would seem likely that Peterson knows there is at least that much awaiting him from another team.

Here is what the current top end running backs are earning on their recent contracts:

PlayerAgeYear 1Year 2Year 3Year 4Year 5

While none of these numbers are close to the $45 million currently in Peterson’s contract they probably give us an idea of what would be an acceptable contract for Peterson who will argue that he is the best of the group. My feeling is that given his age (30) all sides will look at this as a maximum three year contract with anything additional really just being there for cap purposes and/or to inflate a contract number.

Given the above chart I would expect Peterson to definitely not compromise at all on a two year total which will need to be at least $21.1 million to surpass McCoy, the way McCoy did Lynch. I would expect a three year total to surpass Lynch’s by a few million. My guess is this year’s salary is something he can be more flexible with but it will need to be at least the $13 million he is already slated to earn. At $33 million over three years he can reach a tidy three year value of $11 million per year so I would likely consider that a decent estimate. Those last two years will just be used for cap purposes.  (As a sidenote for those asking why I would say McCoy’s contract was far worse than Murray’s, just look at the above chart).

The Cowboys Salary Cap Situation

Dallas is currently pressed right up against the salary cap with about $1.7 million in cap space. Once they sign their rookies they will be in the ballpark of $300,000 in space. None of this takes into account the contract potential of Greg Hardy. Hardy currently counts for $3,217,850 against the Cowboys salary cap, but that number can rise as high as $11,311,600 by the end of the year. Factor in roster expansion to 53 players, Practice Squad salaries, and a few injuries and Dallas is effectively $9-10 million over the salary cap.  On a standard contract Peterson would likely have to count for at least $5 million in cap room, so this is a tough situation.

Dallas has three places where they can primarily find savings. One is the release of Brandon Carr after June 1. Designating him a June 1 frees up $8 million in cap space over the summer.  That does not help them for acquiring Peterson over the draft weekend, however, as they would still be around that $1.7 million figure they are at now.

The second option is restructuring the contract of Tony Romo. I’ve discussed that in detail before and there is no need to rewrite it all here, but in a standard restructure the team saves $12.824 million. That is certainly dangerous for an older quarterback with a bad back, but is likely a strong consideration even if they don’t acquire Peterson.

The third option would be negotiating a contract extension with Dez Bryant, currently the teams franchise player and taking up nearly $13 million in cap space. I think it is worth noting that bringing in Peterson on anything more than a one year contract would be a determent to any negotiation with Bryant if the Cowboys main stance is off the field issues concern them with a long term contract with Bryant. In addition the recent contracts for Jeremy Maclin and Randall Cobb make this even more difficult. I would consider this the least likely of the three options to happen even though it makes more sense than a Romo restructure.

Outside of these three avenues there are no real major cap savings that can be found. To bring in Peterson they will likely need to do two of these three things.

How to Squeeze Peterson in

Assuming they do the first two moves discussed above Dallas will have somewhere in the ballpark of $8-9 million in effective cap space to set aside for Peterson. That would allow Dallas to do a relatively standard contract that might not hurt them badly in the future with a moderate signing bonus and escalating salaries.

But is there a way to do the move without touching more than just one of the above players?  That would depend on Peterson and the Cowboy’s tolerance for pushing money into 2016. The Hardy structure allowed Dallas to bring Hardy to the team now while they wait for the NFL to determine Hardy’s fate. That gives Dallas ample time to decide what to do with Carr, Romo, and/or Bryant. But all Dallas did was delay the inevitable (assuming Hardy can play) until the season.

I guess we can draw some parallels here since Peterson is not guaranteed to be moved off the exempt list by the start of the year and the team could use a similar structure on a restructured deal to almost fit him into their existing $1.7M of cap room (they would likely need to include someone like a Morris Claiborne in a trade to do that), but again it is just delaying the inevitable for the season.

Dallas could attempt to exploit the incentive system to their advantage in crafting a contract to help defer costs to 2015 to lessen the size of a Romo restructure. Because Peterson only rushed for 75 yards in 2014, in theory the Cowboys could give Peterson gigantic payments for rushing for something like 100 yards in a year. The NFL only counts such incentives against the cap if the player reached the performance level the year before so a $10 million bonus for 200 yards on the season would not count against the salary cap until after the season when final adjustments are made. Such incentives would be virtually guaranteed to earn but this allows the team to manipulate the cap for one year. In 2016 the team would take on a large charge for the incentive that was earned but didn’t count in 2015.

I’m not sure that Peterson would be willing to take such a contract. For one this would significantly defer payment until after the season. Secondly the incentives are not really going to be counted as part of his base contract so from an on paper standpoint he will be taking a lower cost contract which is never a good for an ego. He would also run the risk of a preseason injury making the incentive null which is a major risk. Though the team can include rolling incentives to ensure that it will always be available for him to earn once in the future it is still a risky option.  Still this is a way to squeeze him in now without major contract changes, but more likely they will need to rework contracts to get him under the cap.

Should the Cowboys Do It?

While Peterson may be a once in a generation player the fact is he will be 30 years old and only once in the last five years played 16 games. While the Cowboys personnel is superior to the Vikings Id imagine at best you would be looking at a 1,250-1,300 yard year (which is certainly excellent), which is probably not far off from where Murray might be unless his body breaks down from the high use last year. Dallas showed no inclination to make a big commitment to a younger player so I can’t see why they would do it here unless its really just filling a fantasy dream. They would have to be certain that, if healthy, Peterson can produce over 1,500 yards and 15 touchdowns to potentially justify the long term cap damage that can arise from  the move.

Dallas has worked hard to get their salary cap back in order and this move would probably wreck most of that work. It would compromise their positions with their future salary cap and likely tie them to Romo for an additional season. I also believe it would have a negative impact on any negotiation with Bryant who is more important long term to this team than Peterson would be.

Peterson to the Cowboys may sound like a dream come true, but the team will be better off staying the course and finding someone else to play the position

Looking at the Greg Hardy Contract With the Cowboys

Defensive end Greg Hardy signed a contract today with the Dallas Cowboys, officially taking the last monster free agent off the market. It is a very unique contract that is designed to protect the team in the event Hardy remains on the exempt list or suspended while offering both salary cap and actual cash protection.  So let’s look at the way the contract works.

The base value of Hardy’s contract is $11,311,000 with the potential to max out at $13,111,600. Why such an oddball number?  The $13.116 million was Hardy’s salary last year on the franchise tag. Being that he was will last year to sign that contract it was likely an easy to agree to number. The base value is made up of a $750,000 base salary, 1,311,600 workout bonus, and $9.25 million roster bonus that is earned in weekly installments for being on the active 53 man roster.

The roster bonus is the most important part of this contract. Hardy spent all but the first two games of the season on the exempt list, so for salary cap purposes the NFL will only consider 2/16 of Hardy’s roster bonus against the salary cap, a charge of just $1.5 million. This fully protects the Cowboys interests while the NFL decides what to do with Hardy during the season.Because it is tied into being on the 53 man roster any injury, PUP, NFI, exempt, or suspension designation will prevent Hardy from earning the money. Had the money been in the base salary it would be more protected from the injured or PUP lists. That is likely the tradeoff for the Cowboys taking a risk on signing a player who is a PR problem for the NFL right now.

The odd workout bonus is really what should be considered the signing bonus of the contract. This is the same amount that Hardy received from Carolina last season as a salary advance, so again an easy negotiating point. Once Hardy is reinstated he should be able to participate in offseason workouts since any suspensions won’t take place until the games begin in the regular season. Once Hardy’s earns his workout bonus that money can not be attacked in the event of suspension or any other off the field issues that could trigger an automatic forfeiture of bonus money. It is his to keep provided he shows up for the offseason workout prorgam.

All told I am calcuating his cap charge at just $3,217,850 (It will be about $2.6 million if I am incorrect about his exempt date), which fits him easily under the cap…for now. Yes there is a catch to this contract that we need to consider. When we deal with per game roster bonuses that do not count against the salary cap in the offseason, we have to be prepared for taking those charges on in the regular season.

For each week Hardy is active beyond the two week expectation his cap charge will grow by $578,125. If he plays all 16 games that means he will eventually count for the full $11.311 million against the cap in 2015. Obviously Dallas does not have the room to deal with that at the moment.

I would imagine that this puts Brandon Carr on the chopping block for a June 1 cut designation (or simply to be cut in the summer). Releasing Carr after June 1 creates $8 million in cap room, which would offset this potential charge for Hardy. While I would not expect Dallas to do anythin until the Hardy situation with the league is resolved, they should have all the leverage to approach Carr now about a pay cut if he wants to remain in Dallas. Another option is restructuring Tony Romo’s contract during the season as the need arises for more money.

So it is definitely a creative contract that allows the team to bring in a potential devastating pass rusher now and then come up with a way in a few months to deal with the potential cap charges assoicated with the move.