Thoughts on the Cowboys and Ezekiel Elliott

While I am certainly in the camp that believes it is foolish to heavily invest in a running back there is also the reality that it could happen in Dallas with Ezekiel Elliott. First round draft picks basically get one chance in five years to threaten a hold out and it seems Elliott may do it this year which makes this an interesting case to take a look at as Dallas comes off a playoff season that I am sure many credit to Elliot’s presence on the offense. With that in mind lets look at the financial risks for the Cowboys and why, if they do plan on extending him at some point, they should just do it now rather than waiting.

Dallas has a number of considerations to take into account here that go beyond just the true impact of a running back on the outcome of the game. The big risk for Dallas here is that it can clog up their salary cap especially down the line and put the team at a competitive disadvantage. One of the reasons that the draft is so important to teams is that it gives them the ability to find cheap, productive talent at premium positions like quarterback, cornerback, and edge rusher. The lower costs spent on those players helps open a window to take risks elsewhere in free agency where you can justify paying a Sammy Watkins type player a large premium simply because you have a built in benefit of a $30+ million QB playing for $4 million a year. Once you make the switch to the veteran contract for that player that pays a market rate that luxury vanishes and your margin for error is not as large.

Still for most positions you generally are only going to be on par with the rest of the league because so few premium contracts exist so while you lose your competitive advantage when the time comes to pay Pat Mahomes $37 million a season you are not putting yourself at a disadvantage where a bunch of other players will likely be around $35 million a year. Running back, however is an entirely different animal.

The following table lists the premium paid, in terms of new money average annual salary, for the top multi year contracts over contract 5, 10, and 32 at the position

PositionPremium over 5Premium over 10Premium over 32
Int. D-line38.0%82.4%394.8%
Int. O-line19.7%27.3%100.0%

The numbers for running back ae massive. In reality it should be the highest premiums paid for top players vs the 5th and 10th ranked players but the Raiders grossly overpaid Trent Brown as a left tackle then moved him to the right side making it obscene (if you use the second highest paid there its 57 and 89% in the first two categories).  The point is that for so many positions the only question is whether they are better off signing/re-signing an expensive veteran or drafting a player because the premium is not that outrageous. For running backs it is outrageous and puts a team at a competitive disadvantage.

Currently there are three teams with high paid running backs- the Rams, Jets, and Cardinals. This brings up problem number 2 for Dallas. What is the one thing that those teams have in common?  They all have rookie QBs on the team. As I said before when you have that benefit you can take risks. When the Rams extended Todd Gurley they knew they were two years away from dealing with a QB contract. The Jets and Cardinals just drafted players so their running backs will be gone before the QB decision even comes up.

If Dallas extends Elliott Im not sure how they can justify not doing the same for Dak Prescott. At the very least they only have one more year of cost control at QB, unless they plan on bailing on Prescott. On top of that they have premium contracts theoretically coming up at wide receiver and cornerback to go along with their high priced offensive line. That’s not to say that it cant be done (the Rams despite having a cheap year left with Goff have a bunch of high priced players) just that it limits you.

Now Dallas has been pretty much a non-factor in free agency since maybe the year they signed Greg Hardy in a controversial move. I believe that is by design so maybe a contract like this has less impact for Dallas than it would a team like the Jets that lives in free agency but it does probably block free agency in the future.

If Dallas also has designs on finding a new coach in the future, and who knows if they really do, you may have a coach that has no need for a $15 million player at the position leaving you with an expensive paperweight. The final consideration, and this should be universal for most teams, is that the expensive RB often is a block at progress at the position.   Unlike a receiver where you generally have three guys on the field and any of the others can break out, teams with the expensive back are more or less running a one man show. Teams have a tendency to get wrapped up in the name value of a player and not try anything new and the system itself doesn’t allow players to as easily stand out.

The decision tree should be pretty simple for Dallas here. Option 1 is to force him to play out his contract, which runs through 2020 at an average cost of about $8.5 million on the cap and then make the choice between one year on the tag or letting him walk. Option 2 is to avoid the headache of him wanting a new deal and extending him now. Any other option (such as waiting a year to re-sign him) is absolute insanity. You either play hardball or you make the most of a bad situation and do what you can to benefit yourself in the process.

For the sake of argument I’ll assume that Elliott is seeking a contract extension that will pay him $60 million over four new years, with around $30 million guaranteed at signing and $50 million effectively guaranteed. Barring serious injury those baselines won’t change much between now and 2021.  By extending him now Dallas can roll $12.95 million of his existing salary, which is already guaranteed, into that $30 million package. It also gives Dallas two added years of flexibility to work with the cap charges and make the effective value of the contract much cheaper.

From a team perspective the effective annual value of a contract is generally more important than the new value of the deal. A $50 million extension for Elliott works out to an effective value right under $63 million, an annual value of about $10.5 million. It’s still a big premium- about 34% over the 5th ranked effective annual value and 68% over the 10th ranked EAPY- but not as bad as if they will wait and just do a new deal in 2021.

If Dallas is already resigned to the fact that they spent a high draft pick  on Elliott and have to keep him then its best to make the most out of a bad situation and do the deal now. A sample deal that beats the Gurley benchmarks may look like the following

YearBase SalaryProrated BonusCap NumberDead MoneySavedNew Running Cash

Don’t get caught up in the huge dead money totals because by doing the deal you are committing to overpaying him through 2022 so you are not cutting him on the front end of the contract anyway. What a deal like this does is open the door to a trade in any year due to the low prorated portion of the contract specifically in 2022 when the base salary is low. At worst I would like the 2022 year to be closer to what I expect of his production and then have an opportunity to easily bail in 2023.

Is it the optimum solution? Absolutely not. You would be better off doing two franchise tags rather than doing this and ultimately the proper course is to just walk away in a year or two but Im sure the reality is different for Dallas and if that is the case they should just get the deal done and turn their attention to more important matters for the team.