Cowboys 2015 Salary Cap Outlook

Estimated 2015 Cap Space: $18.5M ($143M cap limit)

Roster Overview

Players Under Contract: 56
Pro Bowlers: 6
Unrestricted Free Agents: 14(7 with 50%+ playtime)
Draft Selection: 27

Salary Cap Breakdown

Cowboys 2015 salary cap

Cowboys 2015 Offensive spending

Cowboys defensive spending

Free Agents to Re-sign

The number one priority for Dallas this offseason should be keeping Dez Bryant on the roster. Bryant is a rare talent and not the type of player you would expect to fall apart after signing the big contract. His resume is far superior to the Mike Wallace types who have fluctuating numbers. Bryant has some off the field issues that may be hanging over his head that can make the deal difficult and I feel as if league wide there is less of a push towards firm guarantees which is also going to make this more complex. His numbers are not that far off from where Calvin Johnson’s were a few years ago so Bryant is going to shoot for the moon and likely end up with the franchise tag…The Cowboys will need to bring back one of their right tackles and my assumption is it will be Jeremy Parnell who is younger than Doug Free and should be cheaper. There is more risk involved with Parnell who has a smaller body of work, but cost will likely dictate the decision….Not surprisingly the Cowboys did not pick Henry Melton’s option, but I believe there is still a fit there at the right price. If Melton believes he can get $5 million or more Dallas will likely look elsewhere, but if it’s less they should talk.

 Free Agents to Let Walk

Dallas ran DeMarco Murray into the ground in 2014 and got great value out of the position because of it. The odds of that value ever being realized again are slim once you sign him to a contract extension.  With so many teams having cap room I have to think someone will overpay thinking they can get one season out of Murray in 2015 similar to what he gave Dallas in 2014.  With so many other options available in free agency and the draft the better value is found elsewhere…The fact that Dallas allowed Free’s contract to void indicates to me that he will not be brought back. The market rate for Free is likely in the $4-4.5 million range which should be too expensive…Rolando McClain came out of nowhere to have a good season in 2014, but the team already has Sean Lee under contract and McClain may also come with eventual suspension concerns if he slips up. I guess this decision is primarily based on cost. McClain should not have much interest around the NFL because of his prior two stints in the NFL, so the Cowboys might let him go for now and then call him back if the market is lukewarm…Anthony Spencer has not produced much for the Cowboys for some time and expecting him to get back to being a top pass rusher is unrealistic.

Contracts to Modify

The first significant move of the Cowboys offseason will probably be converting most of Tyron Smith’s $11.039 million salary into a signing bonus. That will create over $8 million in cap space which Dallas will need for free agency. This is a very low risk restructure and one that no one should have issues with…I know there will be temptation to restructure the contract of Tony Romo. His cap charge is the highest in the NFL at $27.773 million, but another traditional restructure of his contract is playing with fire.  You can read my extended thoughts on Romo’s contract, but the short version is unless he just defers money into 2016 for cap purposes they should stay away…Brandon Carr carries an $8 million salary and a $12.7 million cap charge. His signing has been one of the worst recent signings for Dallas and cutting him saves virtually nothing against the cap. They need to get him to agree to a paycut that reduces his cap charge by a few million…Dallas already reworked the contract of Dekoda Watson.

Players to Consider Releasing

If Carr is not open to a renegotiation that Dallas should designate him a June 1 cut. If the team did that Carr would open up $8 million in cap room in the summer which would effectively offset the cap charge he will leave the team next season…Releasing reserve lineman Mackenzy Bernadeau saves the team $1.5 million in cap space.

Offseason Plan

For the first time in recent memory Dallas is out of the salary cap hole and back in a spot where they can pick and choose much more freely with what they do with their contracts rather than being forced into it the way they had been in recent years. Their main priority this offseason should be to continue that trend and gain even more flexibility in the future.

I know it is going to be very tempting for the Cowboys to go all in by gaining the maximum cap relief possible by restructuring the Romo deal, the Carr deal to some extent, and even getting a few dollars here and there with players like Jason Witten. That gives them the room to franchise Bryant and bring in some impact players on defense. That completely defeats the purpose of what they began to accomplish last season.

I know it is very easy to look at last season and say that one more big piece will make it work this year, but what is making things tick for Dallas really has been the development of their younger players, specifically on the line, while getting some good value on some low cost signings. The Dallas big ticket players of the past are not the type of players that got them to the divisional round of the playoffs and they need to keep focused on that.

The two positions I would look at in free agency are running back and defensive tackle, which are both traditionally not high pay positions. I don’t believe going after Adrian Peterson is in their best interests if he comes in at a number above $6 million, but we know that they will be linked to him if he is released. The Cowboys can certainly target a number of DT’s if Melton comes in too high. But beyond trying to find some bargain bin talent they should move into the draft to continue to rebuild the team.

With the offensive line seemingly in place and a decent group of receivers this would be the time for Dallas to focus on the defensive line and secondary to continue stockpiling cheaper talent at somewhat expensive positions. I think everyone knows Romo won’t last forever but if they can maintain a strong offensive line while building a good defensive line and secondary they should be well prepared for life after Romo when they have to slot a younger QB in his place or even as he declines as a player. I think this will give them the best chance to maximize their opportunity in 2015 while keeping their future more flexible if things don’t go as planned this season.

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Looking at Restructuring Tony Romo’s Contract


Recently there has been a lot of talk about the Cowboys restructuring the contract of Tony Romo for salary cap flexibility. Romo has the highest cap charge in the NFL in 2015 at $27.773 million and bringing that figure down would make it easier for the Cowboys to re-sign Dez Bryant, one of their lineman, and either re-sign DeMarco Murray or acquire Adrian Peterson. I wanted to look at some of the ins and outs of restructuring a contract and what is best for the Cowboys to do with Romo this season.

Comparable Situations

It’s important to note that a restructuring is not a new contract. It is simply a way of changing the way the money is accounted for against the salary cap. Usually it means taking the player’s salary and turning a majority of it into a signing bonus that is spread out over the remaining years of a contract.  Every restructure will make it more damaging to release a player in the future. With that in mind Dallas needs to first determine what they believe are the true remaining seasons for Romo, who will be 35 years old in 2015 and has a bad back.

Romo has been very productive the last two seasons and has averaged 251 yards, 2.17 touchdowns and 0.63 interceptions per game. Among 33 and 34 year old quarterbacks since 1990, those numbers rank, at the worst, in the top 15 of the last 25 seasons and in some categories he is top 5. I want to use this group of players to help decide when I will most likely have to part ways with Romo in the future.

While we can look at statistical projections, the fact is that the contract parameters are already complete so our most important item is to identify the point at which Romo will not be productive enough to be on the team. We’ll look at that a few ways.

Our group of players will include all players who averaged at least 200 or more yards per game average over their age 33 and 34 seasons since 1990 (25 total players) and we will track the performance of those players in the table below. The Active column represents the players still getting reasonable game action and the Inactive column are the players who have been cut, hurt, or demoted and rarely play. The 220+ and 200+ yard columns are the percentage of the remaining active players who threw for at least this many yards. The final column looks at the percentage of players that produced an AY/A of 6.5. The numbers are adjusted to take out active players who were not old enough to qualify.

AgeActiveInactive220+ yards200 + yardsAdj. Yards >6.5

What this chart tells me is that age 35 is the last season where I should expect a productive QB. At 36 and 37 we begin to move more into the territory where our expected return (inactive plus ineffective) is making the turn towards non-productive.  Still I can hold out hope through 37 that we have a reasonable chance of being productive. Essentially you don’t wan’t to run too high of a risk in this age 37 season if you can afford it. By 38, 43% of the original group dropped off and looking at the adjusted yards from the remaining group, over 60% are not going to really qualify as higher level players. Essentially their yards are more meaningless than what we are seeing at age 37 and there is approximately just a 25% chance of having a productive player at that age. Age 39 is essentially a void year.

The Current Contract

Romo has 5 years remaining on his contract. $15 million is (or will soon become) guaranteed and the remainder of the contract is not guaranteed. The prorated charges represents charges from a $25 million signing bonus paid in 2013 and bonuses from restructurings in 2011 and 2014 that added bonus money to be paid in the 2011, 2012, and 2014 seasons. The dead money represents all remaining prorated money in the contract plus any remaining guarantees. These are the costs of releasing Romo prior to June 1. A post June 1 keeps only the current years charges on the books while all remaining prorated money would hit the following season.


This is a contract clearly designed to run no later than age 37, which works in line with our look at comparable players above. Age 37 year provides an out at $10 million in the event that things take a turn for the worst in 2016. Provided that the team would have no more than one other major release that season they could absorb a $10 million cap hit and remain near the league average for dead money in a given year.

So let’s look at what we can do with the contract from this point forward

The Max Restructure:

In a maximum restructure we are reducing Romo’s base salary to the absolute minimum and converting the balance, $16.03 million, to a signing bonus.

AgeYearBaseProratedNew ProratedCapDeadSavings

This maximizes our savings in this year by giving Dallas over $12.8 million in additional cap space, more than enough to franchise Bryant and use their existing space for other needs. The tradeoff here is that we have now eliminated our escape route in 2017 and left ourselves with a much bigger number in 2018. A $24.7 million cap charge in 2017 for a 37 year old is extremely high even if we assume a rising salary cap.  That would possibly leave Dallas in a bind again scrambling for cap room and not a lot of leeway in asking for a pay cut.


Second Restructure Option

In our second restructure scenario rather than going for the maximum conversion we’ll take a middle of the road approach and just convert $12 million of Romo’s salary into a bonus.

AgeYearBaseProratedNew ProratedCapDeadSavings

Again I don’t think this is a great option because we are still setting ourselves up for what could be a bad situation in 2017.  This is better than the first option, however, and would free up $9.6 million.

Third Restructure

In this restructure we are converting just $7 million to a bonus.

AgeYearBaseProratedNew ProratedCapDeadSavings

Of the options so far I think this is the most reasonable. We created $5.6 million in cap space and done a better job normalizing the cap charges moving forward. Though the $14.2M dead money figure is high, I can live with it as long as I assume no other major mistakes on the roster.

A Different Option

So far we have worked in the parameters of a traditional restructure where we convert base salary to a bonus. But why do we need to do that?  Romo’s original deal is unique in that his age 36 cap charge is relatively low with a salary of just $8.5M. We can take a portion of salary that is set to be earned in 2015 and push it to 2016. First we will look at a $6 million carry forward.


This is definitely a good option for the team. We save $6 million this year and put it off to the following season, which have just about normalized our cap charges.  I don’t have to touch his dead money in 2017 so my emergency exit button is still intact and in 2018 there is almost nothing left if I’m lucky enough that he made it there.

This is really the ideal way to work within this contract and maintain flexibility. If the number in 2016 looks a little too high there is some wiggle room to include a small bonus as well, such as a $3 million signing conversion:

AgeYearBaseProratedNew ProratedCapDeadSavings

It’s pushing us a little higher in 2017, but it’s not impossible to deal with and it’s better than some of the initial restructures that we looked at.

These are the types of constructs I want to work with. There are plenty of ways we can go but I want to negotiate as much as I can the reallocation of my 2015, 2017, and 2017 base salaries rather than just converting bonus money. I can work a bit with guarantees to make sure the absolute earnings stay the same and in most cases any deferred money would need to be paid the next March as a roster bonus, but I need to minimize any impact to the 2017 and especially 2018-19 seasons.

I do get a good deal of questions about the “Tom Brady” option, but I don’t see that as viable here. There is too much money already in this contract for Romo to just walk away from it. That contract is not a reasonable option for any player to consider. When Romo turns 37, if he is still playing at a decent level, the sides can probably have that type of discussion and the above deals won’t prevent that discussion from taking place, but that is years away from being a relevant discusion.

We’ll see what the Cowboys do but there should be plenty of avenues to realize $6-$7 million in savings this year without really wrecking the salary cap in the future.


Examining the Upcoming Free Agency of DeMarco Murray

The Dallas Cowboys will have an interesting contractual decision on their hands with running back DeMarco Murray. Murray is on pace for a 2,000 yard season, a feat just 6 players have accomplished since 1980. He has become the focal point of a Cowboys offense that has become a throwback to the decade where teams featured one running back and the offense flowed through that player. Set to be a free agent the question is how should the Cowboys approach the contract.

The Running Back Market

There is really only one massive contract for running backs, the contract for Adrian Peterson which averages just over $14 million a season. Prior to receiving that contract Peterson’s top season saw him run for 1,760 yards and he had run for no less than 1,298 yards in a season. Former Titans’ running back Chris Johnson had maxed out at 2,006 yards which also led to a contract worth around $14 million a season. Johnson was released this past year and its likely Peterson will be released following this season.

The secondary tier begins with LeSean McCoy of the Eagles at $9 million a season. McCoy earned his deal following a 1,300 yard season that he combined with contributions in the passing game. Arian Foster earned a similar number based on a 1,600 yard season at the age of 24. Matt Forte ranks third in the tier with $7.6 million a year, bringing an all around game to the table. His max rushing yardage was just over 1,200 yards but he was also consistently adding around 500 receiving yards a season.

Free agency has not been kind to runners who hit the market in the last two years. Chris Johnson and Steven Jackson topped the list at $4 million a season. Those players were considered proven commodities, but with a lot of wear and tear on their bodies. Those figures were nearly matched by completely unproven players Toby Gerhart and Donald Brown at $3.5 million a season.

With Johnson’s big contract void and Peterson’s soon to be, those two data points should be essentially useless for Murray. The secondary tier will likely shrink considerably this offseason as almost every one of those players could be a cap casualty following the season. The Chiefs and Seahawks did give moderate extensions to Jamaal Charles and Marshawn Lynch to make certain they reported to training camp, but neither contract indicated a long term commitment to either player.  Most likely that will be the tier that Murray will look to fit into with the Cowboys.

The question the Cowboys need to ask is should he fit there?

Is Murray’s Dominance Sustainable?

It’s easy to look at Murray’s numbers and say you have to pay him because the risk of losing him is too great and if he goes the offense may go with him. Thus you simply pay him more than the highest paid player, McCoy, at the position. But when you make statements like that you have to try to gain a better understanding of what Murray is expected to do in the future, rather than overpaying for the present.

The reason many teams began to shift away from the runner dependent systems was because of the inability to sustain the big numbers they were put up at a young age. Millions of dollars would be invested in a player only to have the player’s production rapidly fall off a cliff with no possible out for the team due to the cap charges associated with releasing the player.

There are 43 players who began careers in the NFL after 1980 who posted seasons of more than 1,500 rushing yards and continued to play football (Robert Smith retired following his big season).  13 of those players produced a second season of at least 1,500 yards (Arian Foster is could be number 14 this season if his body can hold up). So it would be fair to say that a back that produces 1,500 yards has around a 30% chance of doing it again. Just 8 of the players produced at least a third 1,500 yard season. Here is the breakdown of 1,500 yard rushers’ future performance.

1500 yard rushers

However, there is another factor that should be considered here and that is age. Many of the players on this list produced many of their dominant seasons in their early 20’s. Murray is already 26 years old. Just 10 players had a second season of 1,500 yards at the age of 27 or older. The only players to have at least a third 1,500 yard season at those ages were Barry Sanders and Tiki Barber.  Eric Dickerson was on pace for that type of year in the strike-shortened “scab” season.

There were 21 players in the NFL that had their first 1,500 yard season when they were 26 or older. Of those players just 5 did it again. Those players were Curtis Martin, Larry Johnson, Priest Holmes, Tiki Barber, and Shaun Alexander. I think when you factor age into play you would consider a 23% chance of hitting the 1,500 yard mark one more time and a very small chance (less than 5%) of getting there a third time.

How Many Good Seasons Should Dallas Expect?

For the purpose of this discussion I’ll adjust the 2014 stats and the strike seasons to represent a 16 game season. While we can look at the entire list of 43 players, I think we are better off filtering it down to players who are more representative of Murray’s age. I want to look at players whose first 1,500 yard season came between the ages of 25 and 28 and we want to see how they performed over the next five years of their careers. The reason for the five year period is because this should be the maximum contract length given to any player in the NFL that is not a quarterback.

I think most people have always considered a good season by a running back to be 1,000 or more rushing yards.  We can pretty much bank on Murray having at least one season of 1,000 or more yards. Of the group the only player to not gain 1,000 yards at some point after their first 1,500 yard season was Maurice Jones-Drew (McCoy is on pace to do so this season).

Getting a second 1,000 yard season might be more difficult. Of the 24 names who have had a second shot at 1,000 yards only 11 actually produced them. So there is less than a 50% chance that we can plan on Murray being able to give us two years of 1,000 yard production.

It gets bleaker after that. If we look at three years of 1,000 yard production we get Curtis Martin and Fred Taylor. Martin joined the 1,500 yard club when he was 28 years old while Taylor did it at 27. The only player to produce 1,000 yards four times after attaining his first 1,500 yard season in his mid 20’s was Jerome Bettis of the Pittsburgh Steelers. Bettis was a plodder of a back and averaged around 3.8 yards per carry in most of those seasons. It is unlikely that any other team in the NFL would have given him the attempts needed to reach that number.

1000 yard rushers

When can those seasons be expected?

This is also an important question because it gives us some idea of perhaps how best to structure a contract to build in our optimum exit points. Here is the performance breakdown of the set of players used above in the five years following their 1,500 yard season.

1500yard rusher breakdown

What this tells me is that if Murray is to have another great season it is most likely going to happen in 2015. There is a 40% chance that he is going to come in at over 1,200 yards(a majority of those seasons are over 1,300 yards) and a 68% chance I’ll get over 1,000 yards from him.

In 2016 and 2017 the odds begin to move out of Murray’s favor. We have around a 15% chance of the great season and around 40% chance of just having a good season. Most likely if he is to have a second 1,000 yard year it will come in 2016 with a decline in 2017.

2018 and 2019 are not years where we would really consider Murray an asset. The odds are strongly against another 1,000 yard season  and the odds are strongly in the favor of producing less than 600 yards. At that age he could be unproductive or simply looking to retire from the wear and tear on his body.

Setting the Price

I want to work from the bottom up with Murray, so the first thing I want to do is determine how much I will guarantee him upon signing his contract. Based on the performance of past players I want to look at a 3 year value for Murray, which is going to equal the guarantee I offer him on a 5 year contract. The guarantee is the most important part of the deal because it will define much of the structure since I need to have years 4 and 5 be completely escapable with a reasonable dead money total.

For each tier of yardage I’ll set a price based on past salaries. Normally I would go in year by year and use different values(contract structures are often a waterfall with the largest payments coming in year 1 and gradual reductions throughout), but for illustration I will just use one value per yardage category.

I will value a 1,600 yard season at $14 million, which is the top of the market even though that may not exist anymore. The 1,200 yard season I will factor in at $10.5 million a year, representing a raise from the current McCoy/Foster 3 year value levels of $10M to account for the increase in salary cap. A 1,000 yard season I’ll consider being worth $5 million, based on the Johnson and Jackson deals and between 800 and 999 yards being worth $3.5 million, which is around what teams will pay for the lower level talent. The next category has limited benefit so we will call that $1.5 million and for less than 400 yards I will only use $450,000, the average cost of a rookie the next three years.

If we multiply each percentage by the salary we get the following chart:

1500 yard rusher salary

$14.5 million is what I would call my reasonable price to guarantee Murray based on my three year expectation level.  I feel like I should be ok with that figure given the projected performance. That number alone is not going to get a contract done which is why I would only use it to set my guarantee. In general a full guarantee at the position should represent about 46% of the total contract value. So my offer to Murray is going to need to be somewhere in the vicinity of $31.5 million over 5 years.

If I factor in the 2018 and 2019 seasons I can bring my guarantee up to about $16.5 million. I would raise the amount guaranteed at that point to 48% and call it a $35 million contract. So I would be working between $31.5 and $35 million over 5 years. I would not go over that under any circumstance, and really anything above the $31 million I would probably walk away from. I’d likely consider 70% of the three year value to be guaranteed and I would raise that to 75% if I elected for the higher contract value, which is similar to what the Bears did with Forte a few years ago.

There are tons of cap possibilities with the contract depending on tolerance for cap hits in 2015 and 2016 versus the expected release date of 2017 and virtually guaranteed release date of 2018. Here would be a potential structure of the $31.5 million contract:

1500 yard contract breakdown

In this contract Murray receives a $5 million signing bonus, fully guaranteed 2015 salary and a partially guaranteed salary in 2016. In 2017 the cost to walk away is low enough that I can do that if necessary. My hope in the contract is that we can get two good seasons out of Murray. If I get one 1,200 yard season (preferably in 2015) and then a 1,000 yard year the following season I pretty much made my money back. I can then choose to chase a dream in 2017 or just release him.

The other course of action is to simply apply the franchise tag to Murray next year. The franchise tag will probably be in the ballpark of $10.5 million, which is similar to the cash value I had above in the first contract year. While that may be overpaying, I know that the best chance I have with him for another strong year is in 2015. He has a 40% chance of 1,200 or more yards and that is worth the salary if he gets there.

The important thing with the tag is I make no long term commitment to Murray if I use it.  If he does great then I get value. If he flounders I can negotiate a deal on my terms or just let him walk. Because of the way the position breaks down, the team will almost always have leverage negotiating with a running back. The longer I push off that contract the better off I can be.  I don’t think the tag is unreasonable in this case especially if his camp refuses to budge off a $9 million or so a year annual value, even if its unlikely to be found in free agency.

The Importance of the Contract

I find this contract to be a very important one to the future of the position. Most of the current contracts in that $7-9 million dollar range will be gone next year. It would not be shocking if the only player remaining in that tier is Jonathan Stewart of the Panthers who signed a ridiculous contract a few years back. If a 2,000 yard runner can’t break through and push past that figure it really means a very negative outlook on the position over the next 4 years. The running backs really need Murray to somehow break the bank on this contract even though there is no logical reason for the Cowboys or any other team to do that.

Most like the position needs younger entrants in the draft if it is to financially bounce back. They need the 21 year old underclassman to enter the draft, ala Clinton Portis a few years back, and reach that potential right out of the gates. At the most they would be 25 when getting a new contract and most likely just 24. Teams might give in more in those situations than they are now.

The only player on the horizon right now who could fit that bill is Le’Veon Bell of the Steelers. While he did not come out with the monster year he is on pace for close to 1,500 yards this season. He is just 22 years old.  If the Steelers can keep him going and limit the amount they use LeGarrette Blount, Bell can be the guy after the 2015/16 season to try to re-ignite the position. But that will be infinitely harder if he is working off lower rather than higher numbers set by Murray.

A Close Look at the Tyron Smith Contract Extension


Since we now have the basic details of the Cowboys extension with left tackle Tyron Smith, I thought it would be worth looking at why calling him the highest paid player at the position is not exactly accurate.

Though Smith carries the highest annual value of any tackle, $12.2 million versus $11.5 million for Joe Thomas, the cash flows will tell a slightly different story. Here are the running cash flows of the two contracts:

Year 1$20,700,000$20,000,000
Year 2$30,900,000$30,000,000
Year 3$42,000,000$40,000,000
Year 4$51,000,000$50,000,000
Year 5$60,500,000$60,000,000
Year 6$70,500,000$70,500,000
Year 7$80,500,000$84,000,000
Year 8$97,600,000

For the first five years of the contract Smith will trail Thomas before pulling even in year 6 and then ahead in the seventh and final year of the contract. These numbers do not take into account the fact that Thomas has roster bonus escalators in his contract in year 6 and 7. If Thomas reaches both escalators, which are based on Pro Bowls, His six year payout will rise to $72 million and his 7th year payout to $84 million.

Those escalators are more or less built in to the Smith contract, which is likely how the Cowboys arrived at the $84 million total. If both players continue to play at a high level this deep into their contracts the contracts are at best equivalent and realistically will always favor Thomas. The final year payout for Smith will ensure that he will always be the highest paid player among the current crop of players, pushing his annual value to $12.2 million, a number Thomas can not reach with this contract.

I read some complaints on Pro Football Talk about how the contract is crazy for Smith to sign due to the length of the contract. This now ties him to the Cowboys until he is 33 years old. But that opinion fails to realize that in order to achieve this type of contract it is a concession that you must make. Thomas did the same year ago when he signed his record setting deal and he will be 35 years old when he can next hit free agency, two years older than Smith. While it is true that Smith likely had more earning potential than Thomas, who was 23 when he entered the NFL and signed until he was 27, this is the path to the big contract.

Thomas is not the only individual who sacrificed years to gain big money.  D’Brickashaw Fergsuon of the Jets signed a six year $10 million contract extension in 2010 that would tie him to the Jets until he was 34. Like Smith, Ferguson was under contract for two more years when he signed the deal. Ferguson was generally considered overpaid (though his annual value is inflated by around $750,000), but he clearly sacrificed to get that $10 million number. These are concessions that must be made especially since the limited injury risk is now being taken off the player and absorbed onto the team.

One player who took a different route was Ryan Clady of the Denver Broncos. Clady was a franchise player and considered the best tackle in the game outside of Joe Thomas. Clady opted for the traditional five year deal (though it’s doubtful the Broncos offered other options) which gets him to free agency at 32, a bit younger than the others on this list. When we look at the percentage of payout over the five year value we see the big difference. Smith will consistently get a larger percentage of his contract over the first few years of the deal, with it not really smoothing out until the fourth season of the contract.


Year 133.3%28.6%
Year 250.0%43.8%
Year 366.7%62.9%
Year 483.3%81.0%
Year 5100.0%100.0%

The other thing that we should do when looking at Smith’s extension is an alternative cash flow analysis. In this case we hold off on the extension because we are unhappy with the length of the contract being offered by the Cowboys. Here we play out the contract and will be subject to the franchise tag in 2016 and potentially 2017. For all the issues that may exist with the Dallas Cowboys salary cap they have already shown a willingness to use the tag multiple times on one player (Anthony Spencer) in years where the cap was difficult to navigate. If anything their cap will be better in the future.

Assuming the tag jumps by around $2.5 million in 2016 here will be the new money cash flows over the next four years:


If we discount these at a 7% rate the earnings in the current contract are actually higher than in the second scenario by about $700,000.  We have also eliminated our risks of injury or skill decline during that period. In the above analysis Smith would likely sign a contract in either 2017 or 2018. The terms would be 5 years at that point, which would bring him to either 2021 or 2022. Is that really a material difference than being under contract in 2023? Probably not.

Might he be trading off some money in this situation?  Its possible. The 2018 through 2022 seasons would see him earn $54 million. Would the market jump higher than that in that time?  Im not sure. Clady’s deal was worth $52.5 million over five years and would be used as the barometer, which would indicate $54 million is a fair number. The salary cap will be rising (by how much nobody knows), but we cant be sure if money will funnel to this position or simply go to higher quarterback wages.

All things considered this is a good contract for both sides. Dallas has a bit more control over his salary cap charges and will pay a bit more now to potentially lock up a player at what might be reasonable terms in the future. Smith has more or less reduced risk in the short term and not really sacrificed much in his overall earning potential to do it. While he may not really be the highest paid player, he can now claim he is based on that additional contract year. He’s not the first nor will he be the last player to do that.




Cowboys to Release Kyle Orton


According to, the Dallas Cowboys will finally move on from backup QB Kyle Orton and grant him his desire to be released. Orton’s situation was a strange one, which I had discussed a few weeks ago. He was paid as one of the top backup quarterbacks and Dallas was going to rely more on him this season with Tony Romo recovering from injury. When Orton informed the team of his desire to retire Dallas fought back and claimed they would force him to repay signing bonus money that they had paid him to honor a three year commitment to the team. Orton skipped all offseason activities to affirm his desire to not play this season.

Dallas may have come to the realization that it would be difficult to recover money from Orton if Orton did indeed never play again. A teams best course of recovery is to withhold payments due to a player, but Dallas’ only salary commitment to Orton would be a minuscule amount of performance based pay as well as any responsibilities they may have for severance pay. Orton’s contract is also complex due to voidable years and restructures of the contract, which may make any grievance process drag on for some time.

It should be noted that no transaction for the release of Orton has been made official. I would think that is because of the nature of the situation. Once the Cowboys release Orton, they relinquish their rights to recover bonus money and Orton would be free to sign with another team.  In order to protect their rights they would need to move him to the retirement list or something like a “left squad” list. For Orton to protect his rights on the bonus recovery he would likely want his contract renegotiated to include a clause that would prohibit the Cowboys from recovering the bonus in the event of retirement. Basically this prevents either side from backing out on the deal in the near future.

Releasing Orton should save the Cowboys $3.25 million against their salary cap immediately, something they could not do following through with a long process throughout the summer of convincing him to come back. With some big extensions on the horizon, specifically for WR Dez Bryant, that money would be helpful towards an extension this July or August. Dallas will still need to account for $2.255 million in cap charges next season for Orton.




Best & Worst Contracts 2014: Dallas Cowboys


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

Henry MeltonI 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

Brandon CarrThe 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)

Click Here to Check out OTC’s other Best and Worst Contracts from around the NFL!




Looking At a Possible Contract for Cowboys WR Dez Bryant


I wanted to take a look today at Dez Bryant of the Dallas Cowboys, who is entering the final year of his contract and more or less proclaimed that he is a top five receiver in the NFL. I find Bryant a pretty intriguing contract negotiation since there are arguments that could be made on both sides for his salary and there are many potential risks and rewards associated with an early extension for Bryant.

The Salary Landscape

Here is the list of current top of the market players whose contracts were signed under the age of 30 (Bryant is 26 this season)

WR contracts

Bryant should have two goals in this negotiation. The first is to establish that he is far superior to the bottom four names on this list such that he, at the very least, begins a new salary tier for the position. The second is to argue that he should be paid alongside Johnson and Fitzgerald.

The Second Pay Tier

First I just want to look at base stats to quickly establish Bryant’s position among this group. Here is how Bryant’s three year performance stacks up against the average performance of the four players who make under $13 million a season.

Bryant Performance

n terms of total usage, Bryant laps the field. He ranks first in games, receptions, yards, and touchdowns. However he ranks below average when we start looking at his performance per play where his yards per reception and yards per target both lag the field.  Does that really matter though when working on a contract for a player with the physical abilities as Bryant?  Probably not.

The Top Tier

The reason I stated above that the per play type data likely has limited effect on a contract is when you look at the three year numbers of Johnson and Fitzgerald, at the times they signed their contracts, to the average of the four second tier players and add them to the chart you get the following:

top tier performance

Those other players were unable to attain the salary levels of the big two despite the barely average or below average performances in those yards per reception and per target type categories. But Johnson and Fitzgerald were, much like Bryant, considered physical marvels at the position and not interchangeable pieces. The overall usage numbers indicate dominant and durable players at the position and they were thus paid accordingly.

Looking at it this way I think we can definitely make the argument that Bryant, among the group of current veteran contracts, is worthy of being no worse than the third paid player at the position. Getting him above $16 million a season, however, may not be easy.

His greatest asset is the ability to find the end zone. He has more touchdowns over this three year period than the other two did. He also is catching more passes that come his way, though he has played with the better QB over a three year stretch as well. On a per game basis he only slightly trails Johnson at 0.733 to 0.723 touchdowns per game. He is neck and neck with Johnson in receptions as well. His receptions are well behind Fitzgerald’s.

The major negative on Bryant being considered on par with these two players is his usage stats. The next time you see a Bryant outburst on the sideline about getting him the ball (however one wants to spin it) think about the fact that he gets one less target a game than Johnson and 1.5 less than Fitzgerald. That one added target would basically have put him on par with Johnson for yards and Fitzgerald for receptions. At that point you can make the case that he could warrant the largest contract at the position.

The fact that Dallas’ offense has so many passing options through the years has hurt Bryant. Loosely adjusted for games played, Bryant is responsible for about 22.5% of his teams’ targets. Johnson was at 24.4% and Fitzgerald 26.9%. Among the first and second tier, his team usage ranks just 5th, just ahead of Wallace and Jackson (Harvin and Bowe both benefitted from being on poor teams with limited alternatives).

It’s the one area of statistical dominance that he can not claim right now and it is doubtful that will change. There are a few arguments that he can bring to the discussion regarding that. One is that he is the only one of the two players to play with a dominant tight end in Jason Witten. Jackson had a similar situation with Antonio Gates in San Diego. When it comes to actual attention among wide receivers on the Cowboys, Bryant’s numbers are more impressive.

Secondly I think it would be worth bringing up the fact that Witten is 32 years old and may not have as many seasons left as a dominant player. Once that happens the fact is Bryant can pick up the slack and get those dominant numbers that compare with Johnson and Fitzgerald.

Finally, Bryant is just 26 years old and has years of exceptional football ahead of him. Unlike many other players you are not going to pay for non-results on the backend of a contract, but will get a dominant player for at least four years if not more.

Where Should His Salary Fit

Based on the fact that this is the Dallas Cowboys, who have gone above and beyond for certain players, I think Bryant should have a compelling case to come in very close to those top two players. Can he reach $16 million?  I don’t think that is a possibility. Both Johnson and Fitzgerald had their teams over a barrel in regards to salary cap charges and contract structures which helped get them the deals they received. Bryant is by no means an albatross on the Cowboys salary cap right now and Dallas is probably fluid enough with the cap to be able to threaten back to back franchise tags, which would leave him somewhere between $28 and $29 million in earnings over a two year period..

I think the challenge here should come with designing the 1A tier that is lacking. How much above the second tier average of $11.79 million makes Bryant happy while also being acceptable to the Cowboys? I would think the range here would be $14.7 to $15.3 million a season. I think there is also a point to be made here that Johnson’ five year contract value works out to $15.6 million a season, so coming in close to $15 million is really not that far off from true top of the market pricing.

In terms of years I think the deal has to be similar to the big two at 7 years. That is necessary for salary cap flexibility and can also give Bryant the important distinction of having a $100 million contract. If the $100 million number is a big deal they may be able to push the annual value down to the $14.3 million level, but I’m just guessing as to that being a big benchmark for Bryant. It might not be and they may be more interested in hitting $15 million a year as a benchmark.

Cash flows of the contract will be an important issue. Johnson received $45.75 million over the first three years of his contract. Harvin will receive $43.145 million.  Harvin also could have been threatened with multiple franchise tags and that had no bearing on his extension numbers. I think Bryant needs to come in between both players and I don’t feel that it would be acceptable to him to receive the $37 million total that went Wallace unless that number was fully guaranteed from day one. Both Harvin and Johnson present better comparisons as well because they both had one year remaining under contract when extensions were signed.

Here is the breakdown of how the Harvin and Johnson yearly annual values work out over the first five years of their contract:

yearly salary

There are a couple of interesting things to note here. One is the structure of the deals. Harvin’s is a pure waterfall style contract that starts high and continues to come down. Johnsons follows a unique pattern in that the APY falls and then rises again in a u-shape.  That is very uncommon, but marked the importance for Johnson to eventually get to a final annual value of over $16 million while the Lions were likely stuck working in the $15.5 million range. This is the compromise and the type of structure I would suggest for Bryant as well, except $15 million being his maximum value. The other interesting point is how close the two year values on the contract are. Basically Harvin and Johnson should set the parameters for the first three years of payments pretty easily.

The other thing that stands out is just how strong the Harvin contract was in terms of cash flows. Harvin’s three year annual value was nearly a 1.12 multiple of the five year value. Most other players are in the ballpark of 1. The tradeoff for Harvin was the low guarantee compared to the others at the position. Harvin received just $14.5 million in full guarantees with a maximum guarantee of $25.5 million. Wallace received $27 million fully guaranteed upon signing and $30 million in total guarantees. Johnson received nearly $49 million in fully guaranteed salary. Each of these numbers is important, but the Harvin model should be paid attention to if Bryant’s camp would not agree to a “reasonable” contract and Dallas felt compelled to keep him at a higher number.

Based on the structures of the contracts I would suggest a cash flow to be somewhat along these lines for Bryant, assuming our seven year value ends up around $15 million, which again I think is the maximum he will get.

Bryant Cash Flow

How might we structure such a deal?  Right now Dallas has around $10 million in cap space in 2014 following the $5.5 million in cap savings that they earned from Miles Austin coming off the books. They still have to sign their first two draft picks which will result in a net loss of cap room of about $1.6 million. Assuming that they have no other major signings to make this year they should be able to afford to increase Bryant’s cap charge by $4 million and still get by for the season.

In 2015 Dallas has $138 million currently on the cap, but that includes charges for Doug Free and Kyle Orton, both of whom will have their contracts void, creating another $9 million in cap space. Henry Melton has a $9.25 million cap charge which would never occur. He would either be released or restructured for added cap space. In 2016 the team can begin to turn over the roster without devastating salary cap issues. My goal is to keep the cap charges moderate enough to where I don’t feel forced to restructure the contract in 2015 or 2016.

I think a very fair offer is a $20 million signing bonus with no other change to Bryant’s 2014 salary. That would bump his compensation this year to $22.03 million which actually exceeds Johnson’s salary in his extension year.  Dallas can go lower than that and have it still be acceptable but for salary cap purposes I’d rather give the big bonus and work on a payment schedule that the team will find adequate for cash purposes.  The initial guarantee would consist of the signing bonus, 2014 and 2015 base salaries and half of the 2016 salary. I’d give an injury guarantee on the other half of the 2016 salary and $10 million of his 2017 salary with the opportunity to earn a full guarantee if on the roster in March of those respective years. That works out to a full guarantee of $31.405 million and injury guarantee of $45.03 million.

Bryant cap Chart

I like this structure because it gives me Bryant at reasonable cap figures for the next three years that should not be difficult to handle under the current roster makeup. If I absolutely have to I can take money in 2015 or 2016 and prorate it, but I should not have to here.  Bryant will turn 30 in 2018 and I would have a good deal of leverage to bring his numbers down if he was no longer an elite receiver at that stage. If he was still a terrific receiver I have plenty of years to prorate money into and work out more reasonable numbers.

Those numbers seem large, but I would not be that worried in the event he was dominant. In this structure his plus 30 years (2018 to 2021) would amount to $60.6 million in non-guaranteed compensation. Brandon Marshall, who would be the elite standard bearer for the plus 30 extension, will earn $39.3 million over a 4 year period.  Assuming $7 million a year in cap growth, Marshall’s contract uses up around 6.8% of the total cap room. If the cap grows at the same figure then it’s about 8.8% for Bryant.  That’s certainly higher but it is not crippling.

Potential Risk of Not Signing

Outside of injury risk, which exists for every player in the NFL, there are two unique circumstances that might pertain to Bryant which could impact a contract offer made in 2015.  The first deals with his quarterback, Tony Romo. Romo has now undergone two back surgeries in the last two years and I think there are some legitimate questions about his health this season. With Orton claiming he will retire from the NFL that would leave Bryant catching passes from the likes of Brandon Weeden. That can crush his statistical production and bring questions up as to how QB dependent Bryant may be.

The other risk lies with the position where three big time receivers will also be up for possible extensions during this year. Those players are AJ Green, Julio Jones, and Demaryius Thomas. Here is how this group matches up in some of the major receiving categories.

extension class

There should be no argument that Green is the superior receiver. The case is going to be made that he is superior to Johnson and Fitzgerald at the times they signed their deals and it is a solid case. The only place where he lacks is touchdowns. The other two players you can make a case for as being somewhat equal to Bryant, depending on how much you believe that the players will remain healthy.  Thomas is probably most similar in terms of offensive importance and potential QB dependence.

Now there is nothing wrong with dropping from 3rd to 4th or 5th best, but the danger comes in the contract possibilities. Right now the market is set in stone with overpaid players like Wallace and Harvin and the big two on top. Dallas has always been very fair with their players within the existing frameworks of contracts at a position. The same can not be said of the Denver Broncos and Cincinnati Bengals who seem to be much more difficult to deal with on big contracts.

If Bryant plays things out and those two players decide to sign extensions with their respective teams (Jones would be less of a risk to sign a monster deal off injury) it could change the landscape of the WR market and solidify the Johnson and Fitzgerald deals as unattainable outliers. If, for example, Green signs for $13.3 million a season, Bryant has almost no leg to stand on when asking for the moon. At that point it’s about getting a little more than Harvin with strong up front guarantees. Any of these players coming in low in dollars more or less signals that both the club reps and the player agents agree the Wallace, Harvin, and Bowe deals are all invalid and carry the asterisk that nobody would have close to matching those contracts. It also further solidifies the top two being unattainable.

Of course it can work the other way as well. If Jones or Thomas signed in the $14 million plus range it makes getting $15 million an easier task. If Green somehow was to surpass the Johnson contract Bryant should be able to push even higher than $15 million as it redefines the WR market and validates the contracts at the top and second tiers. I find this scenario less likely, but it could be a consideration.

Bryant also has the ability to explode this year and take the leap into the next level when it comes to production. If he opts to play things out and does something like the 1,700 yard type season Johnson put up in 2011 when he earned the monster extension than Bryant can increase his asking price. That should also give him a year that surpasses anything Green does if Green gets an extension.

These are all considerations that both sides need to take into account if they open negotiations over the next few months.

The Final Verdict

I think both sides will benefit in the long run by trying to do a contract now rather than waiting. I think it benefits the Cowboys on the salary cap and locks up Bryant pretty much for his career.  Bryant does deserve recognition as one of the top few players in the NFL at the position and should be paid accordingly.  For all of the negatives we hear about Bryant I don’t think it has ever impacted his play nor does he give off the vibe that he is a take the money and run player, cruising through the next two or three seasons and collecting a paycheck. It will definitely be a fun situation to keep an eye on and one that maybe will start to play out over the summer.