The Dallas Cowboys are NOT in Salary CAP hell. Yes, that’s right. Despite what you read about how badly the Cowboys are looking, there is a good reason that Stephen Jones keeps saying that it isn’t a problem. That is because…
It isn’t a problem.
One of the things that is hard for both fans and most sports writers to wrap their heads around is that the process of restructuring contracts to create more Salary CAP room is a design feature of the current financial system in the NFL. It is not a design flaw. And in recent years, the Cowboys have gotten a little better at how they award contracts. They PLAN for certain contracts to be restructured, especially early in a big contract. They add clauses to the contracts which allow for restructuring to occur, almost automatically.
Case in point:
The Cowboys can easily get under the Salary CAP by restructuring the contracts of only 3 players they signed to extensions just last year – Tony Romo, Sean Lee, and Orlando Scandrick.
This week, the Cowboys cut a few players, and some people looked at it as them trying to shed salaries. But, the 4 players they cut – DE Everett Brown, DT Corvey Irvin, and OG’s Ray Dominguez and Jeff Olson all could have been kept on the roster if the Cowboys really wanted them around. Those 4 cuts only amounted to a total Salary CAP savings of $545,000
These were NOT salary CAP cuts. These were guys the Cowboys signed in the middle of last year’s injury plagued season that they had no interest in keeping on their team. The Cowboys have defensive lineman Ben Bass and Tyrone Crawford coming back from injury, and have signed Caesar Rayford and Tristan Okpalaugo to their roster since the season ended. They had enough time to look at both Irvin and Brown, and decided that neither player was in their long-term plans. And although the Cowboys currently only have two guards left on their roster (hint: expect the Cowboys to draft a Guard), both Dominguez and Olson were in training camp a year last summer, and neither has shown themselves capable of playing at an NFL level. All of these players were cut because they lack talent.
There is one planned cut that can be seen as a true salary CAP cut. Cutting Phil Costa will save $1,005,000 million off the Salary CAP – almost twice the savings of the other 4 players combined.
After those 5 players get cut, the Cowboys will have 57 players under contract for 2014 for a total of $141,314,594. But since only the top 51 salaries count against the salary cap, the salary CAP hit for the top 51 players is currently $138,719,594.
The NFL has announced that the salary CAP for 2014 will be $133 million; but, that doesn’t include the $1,280,693 of 2013 Rollover space the Cowboys have left over from 2013. So, the Cowboys “Adjusted Salary CAP” for 2014 will be $134,280,693. That is only $4,438,901 OVER the CAP, not the $25 million that keeps getting reported.
But wait! What about the DEAD money from players who’ve been cut in past seasons? The Cowboys have 20 players no longer on the team that they will take CAP hits for in 2014. The bottom 16, mostly due to left over signing bonuses of undrafted free agents, amount to only $406,439. The majority of that is Phil Costa’s $225,000 DEAD money hit. The top 4 DEAD money CAP hits do hurt because all are over $1 million each. Ratliff, Livings, Spears, and Lissemore together add up to a 2014 CAP hit of $11,628,000. Ouch.
When you add the CAP hits for DEAD money ($12,034,439) to the actual amount in salaries ($4,438,901) that are OVER the Salary CAP, the Cowboys need to shed 16,473,340 to get under the CAP – still considerably less than the $25 million most news outlets are reporting.
And here is how the PLANNED restructuring of the Romo, Lee and Scandrick Contracts gets the Cowboys under the salary CAP before March 11th rolls around.
Tony Romo
- Current Salary – $13,500,000
- New Salary – $955,000
- Restructure Bonus – $12,545,000 prorated for 5 years at $2,509,000 per year
- Salary CAP savings – $10,036,000
Sean Lee
- Current Salary – $5,500,000
- New Salary – $730,000
- Restructure Bonus – $4,770,000 prorated for 5 years at $954,000 per year
- Salary CAP savings – $3,816,000
Orlando Scandrick
- Current Salary – $4,500,000
- New Salary – $730,000
- Restructure Bonus – $3,770,000 prorated for 5 years at $754,000 per year
- Salary CAP savings – $3,016,000
Those 3 Restructured Contracts, contracts which already have restructuring clauses built into them because the Cowboys ALWAYS planned on restructuring them this season, create a total of $16,868,000 in CAP space, getting the Cowboys $394,660 UNDER the CAP by March 11th. And remember, the Cowboys already have 57 players under contract. Most of the teams which are way under the CAP have only 30-40 players under contract for 2014.
So, while it’s not ideal for the Cowboys to have to restructure these contracts, the NFL is not played in an ideal world. This is not Utopia. Every team deals with restructuring the big contracts of its star players. It is part of the financial landscape of today’s NFL. And all of this is before we even begin to talk about renegotiating DeMarcus Ware’s contract, restructuring Brandon Carr, or making Miles Austin a June 1st cut. Don’t be fooled by the headlines. The Cowboys are more than capable of getting under the salary CAP, and still have plenty of room to maneuver to find the room to negotiate contract extensions for its younger star players like Tyron Smith, Dez Bryant, and DeMarco Murray.
Where are you getting this information? How does one expect for either of the three players to take a pay cut so significant? How does Romo go from$120 million to only $12 million?
Matt,
Rory explained it correctly. The player does not take a cut in pay. Instead, they get an immediate payout by signing their restructured contract, and a reduced salary during the year.
Imagine you get paid $1000 per week ($52000 per year). Your boss comes to you and says he wants to give you a check for $46,800 today, and then pay you only $100 per week for the next year. You still get $52000 for the year, but you get a big check up front instead of waiting for each weekly paycheck. That is how it works for the player.
Ah, that makes a lot more sense. Thanks much
Matt – none of these players are taking a “pay cut” – they are essentially having their base salary adjusted to a lower “cap friendly” value, while the difference is being put into a signing bonus – money they see right away. The reason they change base salary to signing bonuses is because they can spread the “hit” out over multiple years of the contract.