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Cash Flows: 1 Legit Reason Why Not Signing Dak Prescott Makes Sense

The Dallas Cowboys and Quarterback Dak Prescott will not be returning to the negotiating table as the July 15th deadline to extend franchise-tagged players has come and gone. Frankly, regardless of how do you feel about the outcome, at least it’s over until next year. With both sides failing to reach an agreement, Prescott will play the 2020 NFL season under a one-year deal for $31.4 million.

As tempers flare around Cowboys Nation with those in favor of Dak and those against him, we’ve seen every kind of argument by now. That’s just how sports go, especially when discussing a team as popular as the Dallas Cowboys. Let’s talk about one line of reasoning I can’t wrap my head around.

“They didn’t pay Dak Prescott because they’re clearly not sold on him.”  For many fans, that’s been the conclusion from this week’s events. I understand where those comments are coming from, but the evidence points toward them being wrong. Think about it, the Cowboys and Dak didn’t sign a contract extension mainly because they didn’t agree on the deal’s term.

Prescott’s camp wanted to sign a four-year deal, following the NFL’s trend of signing quarterbacks to shorter deals. Excluding KC Chiefs Quarterback Patrick Mahomes (a.k.a. The Richest Contract In Sports History), out of the last seven quarterbacks to sign contract extensions of over $30 million per year, only Matt Ryan has signed for an extension longer than four years.

If the Cowboys weren’t sold on Dak, how come they wanted to sign him for five years? How come the biggest issue when trying to get their franchise quarterback to sign was that they wanted to secure his play one more season? It wasn’t really the money, but the fact that they didn’t want to do a four-year deal… It doesn’t really make sense, does it?

Well, allow me to explain the one legit reason why the Cowboys’ decision could make sense in the eyes of the team.

When we talk about NFL contracts, the conversation revolves around average annual value, guaranteed money, term, and signing bonuses. Other than that, we usually don’t dive deeper. If anything, we take a look at the structure of the contract to see how the cap hit is distributed and what potential outs the team has.

But we rarely discuss cash flows. Jason Fitzgerald from Over The Cap wrote about them on his site back in May and it’s a topic we should be discussing more often. How much cash does the player actually receive each year? While guaranteed money and other terms are important for players, how the player gets paid each year might be the most important factor of all.

Below is a table showing the top multiannual contracts in the NFL’s cash flows (excluding Patrick Mahomes’ deal due to how extraordinary it is and how it doesn’t really work as a benchmark). The table shows how much a quarterback has earned in total each year.

Cash Flows: The One Legit Reason Why Cowboys Not Signing Dak Makes Sense
NFL QB cumulative cash flows. Source: OverTheCap.com

Quarterbacks usually sign contract extensions while still on a contract, which explains the “Year 0” shown above. This means what the player gets paid in new money (money specifically from the new contract extension and not the prior deal) as a sort of “prepayment.”

Prescott bet on himself in 2019 and because he played out his contract, instead of starting by looking at “Year 0” cash flows from other quarterbacks, we should be looking at “Year 1” money. This is where things get interesting. Let’s take a look at the year-by-year cash flows from the top quarterbacks beginning from “Year 1.”

Cash Flows: The One Legit Reason Why Cowboys Not Signing Dak Makes Sense 1
NFL QB year-by-year cash flows. Source: OverTheCap.com

As you can see, the NFL’s average “Year 1” cash flow is close to $60M. For Seattle Seahawks QB Russell Wilson, the number rises to over $70M. By tagging Dak Prescott, the $31.4M they’ll pay him in cash this year is not even in the same ballpark as the other top quarterbacks.

Even if they tag him in back to back seasons, the cash flows of the next two years will be $69 million while for the other quarterbacks it’s over $100M.

The reason why cash flows are so important is that players and agents want money now, while owners want to pay later. Simply put, it’s easier for any player to earn the money from earlier years than it is to get to the final years of the contract.

While the Dallas Cowboys are risking prices going up next season if the Houston Texans sign Deshaun Watson to an extension, tagging Dak might make sense in their eyes because of the cash flows.

“If they tag [Dak] this year and do a deal next year at $35M per year for four years, it’s an average of $34.3M over five seasons. As long as Dallas keeps the salary down under $35.9M the five-year value would not exceed $175M or exactly what he would earn taking a five year contract now.” – Jason Fitzgerald from Over The Cap.

This being the reason why Jerry and Stephen Jones feel confident about letting Prescott play under the tag makes way more sense than the common theory of them “not being sold on Dak but still wanting to lock him up for five seasons.”

Of course, that doesn’t mean things will turn out for them. Personally, I strongly disagree with their decision of not extending Prescott and fear it will backfire for them. However, this is the reason I believe the decision makes sense in the front office’s eyes.

The Texans are getting ready to pay Watson and the QB market might skyrocket unexpectedly. Dak has played his cards right up until now. If you think he isn’t aware of how Kirk Cousins paved his way to free agency after playing two consecutive seasons under the tag, you might have another thing coming. Since leaving Washington, Cousins has led the NFL in earnings.

If the Cowboys want to hand the franchise tag Prescott for a third consecutive year, the price tag would be $54M, a number that will be super unfriendly for the salary cap. This would likely allow Dak to test free agency, taking his value to another level when several teams start bidding for his services.

Dak Prescott understands this. He has bet on himself before and has done it yet again by signing the franchise tag in 2020 and won’t hesitate to keep doing it. As long as the Cowboys don’t let Prescott walk in 2022, things should be fine for the Cowboys. But the mere fact that his future in Dallas is in question is concerning for the team’s future.

Note: If you’re interested in learning more about NFL cash flows, I recommend reading Jason’s whole article at Over The Cap.

Tell me what you think about “Cash Flows: 1 Legit Reason Why Not Signing Dak Prescott Makes Sense” in the comments below, or tweet me @MauNFL and let’s talk football! If you like football and are looking for a Dallas Cowboys show in Spanish, don’t miss my weekly Facebook Live! show, Primero Cowboys!

What do you think?

Mauricio Rodriguez

Written by Mauricio Rodriguez

I love to write, I love football and I love the Dallas Cowboys. I've been rooting for America's team all the way from Mexico ever since I can remember. If you want to talk football, I'm in... You'll find me at @MauNFL.

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  1. “Personally, I strongly disagree with their decision of not extending Prescott and fear it will backfire for them.” UGH…it’s these kind of comments that just make me shake my head. It takes two to negotiate. If one doesn’t want to negotiate it’s not called negotiation. So based on this if Dak wanted $40 for on 3 years, heck you as the Cowboy GM would sign him???? Please just STOP.

    • I can understand your frustration, but it misses the point, in my opinion. Dak Prescott wanting $40M for a 3-year deal wouldn’t make sense in the current QB market. Like it or not, if you want to keep your franchise QB, you have to pay up. What Dak is asking isn’t by any means unfair, IMO. $40M for 3 years would be. He’s asking for a four-year deal. The Cowboys also weren’t giving him a lot of incentives to sign for five years. Heck, they were guaranteeing less % of his contract than what Tannehill got from Tennessee. It takes to parties to sign a deal, but if one of those parties doesn’t grasp where the market is at, you’ll never get a deal.

  2. Dak will play with Dallas this year, then they will tag him again next year, but not use the exclusive tag, so another team can sign him, and the Pokes get 2 first rounders. Then they use those plus their own picks to trade up in 2021. Trevor Lawrence, here we come!

  3. So much for wanting to build a strong supporting cast for a better chance of ending the Super Bowl drought. Dak just demonstrated where his priorities are. Great QBs don’t necessarily lead to Lombardy Trophies, and highly paid QBs don’t necessarily become either great QBs or Super Bowl winners. Has Tom Brady ever been the NFL’s highest paid QB? No. Several mediocre to good QBs have Super Bowl trophies in their list of credits.

    The first half of Dak’s rookie year was, in my opinion, the best he has played; subsequent statistics not withstanding. And yet, I will never stop believing that, with the talent on that team, a healthy Romo would have given us a better chance of going all the way. If the Cowboys can get one or more first round picks for him, I say trade him before the start of the season, and let’s see what Dalton can do with decent talent around him. Then, use those picks plus our own to draft our next Super Bowl winner.

    And who knows: could lightning strike once again in the form of Ben DiNucci? James Madison doesn’t produce NFL Quarterbacks you say? Well, neither does the Naval Academy, right?

  4. The balls in daks court. He has to get to the championship game. Or superbowl for the cowboys to tag him again if he flops again 8 and 8. Hes gone , no way jerry brings him back on a 38 million dollar tag. He can get dalton to run the show at half the price. So the pressure is on dak big time. Get to a superbowl your the man. Name your price especially if u win. Lots of ifs. But lots of ben Franklin’s your asking for also. The bigger the show the bigger the money. have to produce son. Nothing is free in this world. u chose this path. Put your big boy pants on. And show us what your made off.

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