Note: Offseason Manifesto Part I: Needs Assessment looks at the Process of building a team’s roster and the litany of free agents Dallas will need to either resign or replace. Click Here.
“Fans often times devote all of their attention to the draft process once the season is over, forgetting the all-important rule; fill your holes in free agency so the draft is about the best talent available. Dallas’ holes are a-plenty…”
As our astute readers know, there is no such thing as Salary Cap Hell. CowboysHQ writers has been trying to beat that out of Cowboys Nation’s collective lexicon since before this site even existed. The salary cap is dynamic, not static. It fluctuates from year to year, moving the ceiling up as the league brings in more and more revenue. It is entirely possible, and likely, that each year’s cap rises above and beyond the projected increases, because the NFL annually brings in more money beyond their wildest dreams. In addition and possibly more importantly, the Collective Bargaining Agreement (CBA) that is agreed to by the NFL and the NFL Player’s Association (NFLPA) allows for multiple contract mechanisms that allow teams to play “funny money” with the amount of cap space used on each deal. Teams can very easily spend ‘X’ amount of dollars on a player one year, yet have up to 5 years to actually “be charged” for that amount.
Creative financing by multi-millionaires and billionaires? Absurd!
For more insight into the inner workings of the cap, make sure you check out our October series on the Cowboys 2015 Salary Cap Overview, Part I. That article discussed carrying over cap space from one year to the next (Dallas now has a little over $3 million), projected salary for the next year (Dallas currently has a little under $137m on the books for 2015 for 53 players) and the projected cap for next year (current estimates are around $142.5m).
With approximately $8.5 million in cap space going into free agency, one might wonder how exactly Dallas is going to be able to afford to bring back the majority of those 23 free agents. Even more worrisome, how is Dallas going to be able to improve? Simple… Salary Cap Math.
Salary Cap Math is the use of reallocation to pay a player the exact same amount that is agreed upon for his base salary. The most common method, Restructure Bonus, is when base salary for a year is converted to bonus money. That money is normally then paid immediately to the player instead of over the 17-week regular season (unless an agreement is made for the bonus to be spread out as well). It allows the same “salary” to hit multiple years of the team’s cap instead of just one. If a team converts $10m of base salary into a bonus (and that player has a minimum of five years remaining on his deal) then that $10 million hit is now only a $2 million hit. It just adds a $2 million hit to the cap in each of the next four years as well. There’s another interesting form of reallocation that will be discussed later in the article.
Salary Cap Math also includes being able to wipe out potential cap charges for players that are not living up to their part of the contract. While it sucks for the player, the majority of an NFL contract is not guaranteed. At any time, a team can release a player and they are no longer responsible for any non-guaranteed money.
It is in these two methodologies where Dallas will once again prove that Salary Cap Hell is a simply a media narrative used to fill up space and generate website clicks. $8.5 million worth of salary cap space isn’t a lot, but it’s not a little, either. In Part Three of this series, we’ll get into the details as to how Dallas can fit certain things under the cap. For now, we’ll discuss the players who Dallas might call upon to rework the structure of the deal they’ve signed to allow more flexibility this offseason.
A very unlikely move of releasing future Hall of Famer Jason Witten could reap between $3 and $5 million in savings, but there’s little chance Dallas pulls that trigger until after 2015. There are also other small moves Dallas could make to reap a million dollars’ worth of savings on each individual move, but those will likely play out as depth charts are reworked.
It is important at this point to remember, Dallas doesn’t HAVE to restructure any or all of these deals, and if they choose to, don’t always have to restructure a base salary down to the league minimum for the year. These are simply various options they have should they choose to create additional cap room for other signings. More to the point, the decision to make such moves is not exactly a rush job. The NFL calendar mandates that clubs be below the salary cap by the start of the league year, March 10th for 2015. After that point, there is nothing prohibiting Dallas from waiting until a new deal is agreed upon before initiating the restructure in another player's contract.
In the “Needs Assessment” writeup, it was discussed that it’s more realistic for Dallas to envision 2-3 years of quality Romo play than 4-5 years as Jerry Jones boasts. As such, for the first time in years, spending on outside free agents gets the stamp of approval from this writer. The Cowboys need to enter a pseudo-“win now” mentality. It’s been five seasons since Dallas made a playoff run. 2009 was the fourth year of a playoff caliber edition of the Cowboys (2008 was playoff worthy, but injuries derailed the effort). The Cowboys made the decision to stand pat with their roster instead of dabbling in free agency. Age caught up to them and they started the 2010 season 1-5 before Romo’s season-ending injury. Dallas is in a much different place roster-wise than they were there, as they have a much younger core. Not using free agency to augment their talent, remaining complacent, could lead to the team not fulfilling the hopes of championship contending over the next two or three years. Most teams in the league have a window of 3-4 years of “being ready”. For Dallas, that window coincides with the expected time remaining on high-level Romo performance.
That window is further cemented with analysis of quarterbacks from age 35-38 as done here by OverTheCap.com. In the article, Jason Fitzgerald confirms that Dallas should indeed be looking at a 2-3 year window for Romo, and warns against using the full restructure of his deal as it will make his cap hit harder to maneuver down the line should Romo no longer be their franchise option. Recently it has been debated whether or not the Cowboys should restructure Romo or not. This debate normally takes the stance addressed above, that it’s restructure down to the minimum, or not at all. This clearly is not the case.
What Fitzgerald suggests is that Dallas avoids losing some of it’s “what if Romo turns bad” flexibility by putting cap charges onto the 2017-2019 seasons. Instead, he thinks Dallas should move a chunk of the 2015 base salary over to 2016 base salary. Look at the above graphic detailing Romo’s yearly salaries. Doesn’t 2016 seem a bit out of place? Is it possible this has been Dallas and Stephen Jones’ game plan all along?
Regardless, it is definitely an option that the club has in building their roster for the 2015 season and the next few years of championship contention. Dallas has at least $8.5 million in space right now, and that will jump to $17.5m as soon as they declare they aren’t bringing back Melton. Restructuring Tyron Smith could move them up to as high as $25.5 million. They could move on from Brandon Carr in such a way as to get to $33.5 million, and can have up to $46.5 million with a Romo restructure. Dallas could end up anywhere on that spectrum of cap space, depending on where they need to be.
In Part Three and our Series Finale, we’ll finally look at some potential moves in Free Agency as Dallas looks to shape their 2015 roster. These moves will determine which of the moves discussed in this piece Dallas will likely need to do in order to create the room.