Last year, Tony Romo received a new contract, and it was trumpeted that he signed a 6 year, $108 million contract extension that pays him $18 million per season. Many people were upset. Also, many people are still upset because it seems that the Cowboys are killing themselves in future seasons by constantly restructuring Romo’s deal.
What I want to explain is why that is the wrong way to look at Romo’s contract. In fact, Romo’s contract is a masterpiece of financial planning, and Stephen Jones deserves a lot of credit for helping provide financial stability for the Cowboys at the starting QB position for the foreseeable future.
Let me explain…
Although it was reported that Romo’s contract was a 6 year deal, in fact, it was a 7 year contract. Here are the official numbers.
- Official length and size: 7 yrs, $119.5 million, $25 million signing bonus, $55 million guaranteed
- $25 million in bonus paid up front.
- (Age 33) 2013 Salary - $1.5 million + $5 million prorated bonus
- (Age 34) 2014 Salary - $13.5 million + $5 million prorated bonus
- (Age 35) 2015 Salary - $17 million + $5 million prorated bonus
- (Age 36) 2016 Salary - $8.5 million + $5 million prorated bonus
- (Age 37) 2017 Salary - $14 million + $5 million prorated bonus
- (Age 38) 2018 Salary - $19.5 million
- (Age 39) 2019 Salary - $20.5 million
So, let's dive into the analysis of this contract.
- Average Salary over first 3 years - $19 million per season
- Average Salary over first 4 years - $16.375 million per season
- Average Salary over first 5 years - $15.9 million per season
- Average Salary over entire 7 years - $17.07 million per season
The first thing that jumps out at me is the Big drop in Salary in the 4th year of the contract. The second thing that jumps out at me is that the last 2 years of the contract are for $40 million with no prorated signing bonuses.
So, if you look at the contract from the standpoint of being a 5 year contract, then the Cowboys are paying an average of less than $16 million per year, which is exactly what I thought was the right market price for Romo at this point in his career.
I suggested several times last year that the Cowboys would give Romo a 5 year, $80 million contract with a $25 million signing bonus, and about $48 million guaranteed. In other words, the first 3 years of the contract would be guaranteed. Well, in fact, if you drop off the last 2 years with the $40 million in salary that Romo is unlikely to see, what Romo got was a 5 yr. contract for $79.5 million, a $25 million bonus, and $55 million guaranteed. I was over by $500K on the total amount, and under by $7 million on the guarantee.
But if you look even closer, this contract becomes even more CAP friendly for the Cowboys. It is quite obvious that the Cowboys plan to Restructure Romo's salary in both years 2 & 3 of his contract, and possibly in years 4 & 5.
This year the Cowboys had a CAP number of $22,836,333 for Romo. But after restructuring his contract next year, he will get about a $12.5 million Restructure bonus with a $1 million salary. That will lower his CAP hit this year by $10 million. Next year, in 2015, the Cowboys are likely to restructure Romo's contract a 2nd time, giving him say a $2 million salary, and a $15 million Restructure Bonus. That will lower his CAP hit in 2015 by $12 million - another big way for the Cowboys to save money on the CAP.
Then, in 2016, Romo's contract drops to $8.5 million. The Cowboys could choose not to restructure his contract that season. With Romo playing the 2016 season at the age of 36, the Cowboys can choose to cut ties with Romo anytime after 2016 and still walk away with a good deal.
After restructuring his contract in 2014 and 2015, here is what the actual breakout will look more like:
- $25 million in bonus paid up front in 2013
- (Age 33) 2013 Salary - $1.5 million + $5 million prorated bonus = $6.5 million CAP hit
- $12.5 million Restructure bonus paid in 2014
- (Age 34) 2014 Salary - $1 million + $7.5 million prorated bonus = $8.5 million CAP hit
- $15 million Restructure bonus paid in 2015
- (Age 35) 2015 Salary - $2 million + $10.5 million prorated bonus = $12.5 million CAP hit
- (Age 36) 2016 Salary - $8.5 million + $10.5 million prorated bonus = $19 million CAP hit
- (Age 37) 2017 Salary - $14 million + $10.5 million prorated bonus = $24.5 million CAP hit
- (Age 38) 2018 Salary - $19.5 million + $5.5 million prorated bonus = $24.5 million CAP hit
- (Age 39) 2019 Salary - $20.5 million + $3 million prorate bonus = $23.5 million CAP hit.
The Cowboys can cut Romo at age 37 prior to the 2018 season, and only take a $8.5 million DEAD Money CAP hit in 2018. If you consider that they will likely be paying a new QB on his Rookie contract in that year, taking that CAP hit will be easy to swallow.
Also, if the Cowboys decide to draft a rookie QB in 2015 or 2016, and let him sit for 1-2 years behind Romo, then theoretically the Cowboys can start the 2017 season with at least 2 years left on his Rookie contract. The Cowboys could designate Romo a June 1st cut, and then take a $10.5 million CAP hit in 2017, and another $8.5 million CAP hit in 2018 while the salary of the new Cowboys QB is still relatively low.
What this means is that the Cowboys have arranged a contract with Romo, that when combined with the rookie contract of a new QB picked in 2015 or 2016, will not cost them more than $19 million per season for the next 6 years.
That, my friends is a very, very well written contract. Romo get's 4 years to make it work at an average salary of just over $16 million per season - well below the rate the top QB's are getting. The Cowboys get a contract guaranteed to cost them no more than $19 million per season against the Salary CAP for the starting QB.
(Note: This does NOT include $14.6 million the Salary CAP hits for Romo's previous contract that are spread over the next 4 seasons. The Analysis above was strictly for Romo's new contract.)
Now, instead of looking at it from the perspective of an individual player, let’s look at it from the perspective of a General Manager. If I’m the General Manager, what I want is Salary CAP stability at the starting QB position. At a time when franchise QB’s are getting paid at a rate of $20 million per year or more, can I reduce that obligation and at the same time, get quality play at the QB position at a reduced rate?
Here is the real deal. Romo was already scheduled to make $11.5 million in 2013. If you consider that his contract is ACTUALLY a 4 year deal for $65.5 million, that means that the Cowboys tacked on 3 more years for $54 million - an average of 18 million per season.
Here is where you have to just sit back and appreciate the Genius of the structure of the contract that the Cowboys got Romo to sign.
- Assume the Cowboys restructure Romo's $13.5 million salary in 2014 into a $12.5 million signing bonus + $1 million salary.
- Assume the Cowboys restructure Romo's $17.0 million salary in 2015 into a $15.0 million signing bonus + $2 million salary.
- Assume the Cowboys restructure Romo's $8.5 million salary in 2016 into a $6 million signing bonus + $2.5 million salary.
- Assume the Cowboys draft a new young QB in 2016 to replace Orton as the Backup who will learn as Romo’s backup for for 1 season. The Cowboys draft this kid late in the 1st or early in the 2nd round, and pay him a contract in the range of $8 million over 4 years - an average of $2 million per season.
- Assume the Cowboys cut Romo in 2017, but designate him a June 1st cut.
Here are how those moves, along with the new contract Romo just signed, affects the Cowboys salary CAP over the next 6 seasons.
- 2013 - Romo CAP hit - $6.5 million + $5,318,333 Old Bonus CAP hit (OBCH) = $11,818,833 Total CAP hit
- 2014 - Romo CAP hit - $8.5 million + $4,336,333 OBCH = $12,836,333 Total CAP hit
- 2015 - Romo CAP hit - $12.5 million +$3,273,000 OBCH = $15,773,000 Total CAP hit
- 2016 - Romo CAP hit - $14.5 million +$1,635,000 OBCH = $16,135,000 Total CAP hit
- 2017 - Romo DEAD money CAP hit - $12.0 million + New QB Salary - $2 million = $14 million Total CAP hit
- 2018 - Romo DEAD money CAP hit - $11.5 million + New QB Salary - $2 million = $13.5 million Total CAP hit
- 2019 - Negotiate new Contract for New QB based on performance.
What the Cowboys have done with this contract is guarantee that they will have a very friendly Salary CAP number for the Starting QB for the next 6 years.
Also, the DEAD money for Romo's bonuses in 2017 and 2018 prevent the Cowboys from spending that money on other players - ensuring that they have the CAP space to sign the new QB they draft in 2016 without having to cut a bunch of guys in 2019. Essentially, the DEAD money acts as a place-holder reserving that part of the CAP for the starting QB in the past and in the future for those 2 seasons.
Genius, I tell you. Just Genius. I am in admiration of Stephen Jones.
Free Agent CB Orlando Scandrick Joining Washington Redskins
Just two days after being released by the Dallas Cowboys, cornerback Orlando Scandrick has found a new home in the nation's capitol. After 10 seasons in Dallas, Scandrick is signing with the rival Washington Redskins.
Redskins and Orlando Scandrick have agreed to a 2-year deal worth a max value of $10M, source said. From Dallas to a rival.
By joining Washington after leaving Dallas, Scandrick follows in the footsteps of many ex-Cowboys: Terrell McClain, Jason Hatcher, Stephen Bowen, and even Deion Sanders to name a few.
Last week, Orlando reportedly requested his release from Dallas. It was widely expected that he would be a salary cap casualty anyway, though, and especially with the young stockpile of cornerbacks the Cowboys currently have.
Dallas has three young corners they believe in with Chidobe Awuzie, Jourdan Lewis, and Anthony Brown. There is also talk that Byron Jones could be moving back to CB next year.
Scandrick, 31, will get to stay in the NFC East and now cover some of his former teammates. Give the reportedly salary, he should at least be the slot corner for Washington next year if not a starter.
Upgrading the Offensive Line Cowboys Top Offseason Priority?
Despite the displeasure by the majority of fans, the Dallas Cowboys continue to hold things close to the vest with their approach to free agency. It's definitely not the most popular approach and tends to drive fans crazy, but things could start heating up now that the free-agent market is starting to settle.
Looking from the outside in, we can only speculate as to which positions the Dallas Cowboys may prioritize in free agency and in the draft that matter. Earl Thomas and the safety position has been the most popular topic of discussion throughout the free agency process, but it looks as if the Cowboys are narrowing their focus on upgrading and adding depth to their offensive line.
This is just speculation of course, but it's based on the fact that the Cowboys are rumored to be bringing in free-agent offensive lineman Marcus Martin and Cameron Fleming. And on top of that, it was announced that two of the Dallas Cowboys 30 pre-draft visitors are also offensive lineman, Will Hernandez, who is popular among Cowboys fans already, and offensive tackle Kolton Miller.
I don't know about you, but it looks as if the Dallas Cowboys are certainly focused in on upgrading the offensive line. This absolutely makes sense after what they went through last season with the carousel at the left guard position and Tyron Smith's struggles to stay healthy.
More than anything, the Cowboys need OL depth heading into the 2018 season. There is only really one spot up for grabs at left guard, but the depth across the OL is absolutely depleted unless you want to rely on Chaz Green again.
This is where Marcus Martin and Cameron Fleming make a lot of sense. Marcus Martin has the versatility to play center and guard, and has done so already in his NFL career. He could compete for the starting LG position, but if nothing else, could replace Joe Looney as the backup C/OG.
Cameron Fleming could be the more important of the two free agents the Cowboys are rumored to be interested in. At the worst, Fleming would be an upgrade as the swing tackle, something he's done with the New England Patriots throughout his career. But, he could compete to become the starting right tackle, which would kick La'el Collins back inside to left guard.
That's all speculation right now, but the Dallas Cowboys would do what's best for the entire team in order to get the right starting five offensive lineman on the field.
The same can be said about rookies Will Hernandez and Kolton Miller. Hernandez would likely be a plug-and-play left guard if he ended up being the Dallas Cowboys first-round draft pick. That would keep the offensive line from shuffling and hopefully solidify the unit for years to come.
Kolton Miller on the other hand would be a lot like the Cameron Fleming situation mentioned above. He can probably tackle on the left or right side the NFL, although some draft analysts believe he will struggle as a LT at the next level.
Of course, there is no way of knowing how much interest the Dallas Cowboys have any of these players right now. But to me, it looks as if upgrading the offensive line is certainly one of their top priorities this offseason.
Is upgrading the OL the Dallas Cowboys top offseason priority?
Cowboys Free Agency: The Thin Line Between Frustration and Comprehension
For die-hard NFL fans, the free agency period is as fun as any other week in the regular season. It's always a fun experience knowing what team is interested in which player and who's visiting who. Heck, there are websites with "free agents trackers" for people who don't want to miss a single thing.
Seeing the huge contracts some players get and discussing whether it's well-deserved money or an overpaid salary provides football fans all around the league with fun football conversations in the middle of March.
This is a period in which, despite not being on the field, every NFL team is doing the same thing. Trying to get better. Which is exactly why most Dallas Cowboys fans are frustrated with how things have gone for their favorite team in this 2018 NFL offseason.
Right now, less than a week after the free agency period officially began, they're the only team left in the NFL that hasn't signed a single free agent.
Surprising? Not at all.
Whether we like it or not, we know how this team likes to operate. A quiet free agency isn't out of the ordinary for the Cowboys. For many years, the NFL Draft has been the priority for them, and they've done a good job at it.
At the end of the day, waiting for the first wave of free agents to pass is smart unless you're looking for a QB or have a huge amount of cap space. When you look at what players are getting, you realize most of them are overpaid. Sammy Watkins got a $48M three-year deal, when he hasn't really proved to be worth it.
I don't think Cowboys Nation would've liked to see the Jones family bring Watkins for that kind of money. Personally, I don't mind the Cowboys' front office letting those first expensive signings occur without them participating in them.
I mean, they've already made a splash, when you think about it. DeMarcus Lawrence was the biggest non-QB free agent of the year and they managed to keep him for at least next season. It's not exactly a free agent signing, but they are paying one of the NFL's best pass rushers more than $17M to wear the Star one more year.
Yes, the Cowboys' team-building philosophy is comprehensible. But when do fans like you and me stop understanding their offseason approach and get bothered by it? To me, that frustration came in the form of Tyrann Mathieu signing with the other NFL team in Texas.
If the Honey Badger had signed a super expensive contract, I'd be fine with the Cowboys passing on him. But Houston was able to get him for just seven million dollars on a one-year prove-it deal.
Mathieu is one of the best defensive talents in the league and will be just 26 years old when next season begins. Why didn't the Cowboys tried to land him, if safety is a position of need? I mean, we've been talking about a potential trade for Earl Thomas all year!
Were they hesitant just because the Honey Badger isn't your traditional safety? Are they so conservative that their reason to not go after him was he wasn't a scheme fit? When you're talking about a talent like his, I think you make things work to see him thrive along young and promising cornerbacks like Jourdan Lewis and Chidobe Awuzie.
The Cowboys can still look at Tier-2 free agents such as TE Eric Ebron or S Kenny Vaccaro over the following days. It could end up working for them, or it could end up just like Nolan Carroll's horrendous game versus the Broncos in week 2 of the 2017 NFL season and his $2M in dead money for this year.
When it comes to the Cowboys' approach to free agency, there's a very thin line between comprehension and frustration. Maybe, just maybe, they make us understand next season when we see results on the field.
For now though, it's tough to stay in the "comprehending" side of things.
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