1. Welcome to CowboysZone!  Join us!  Come on!  You know you want to!

Breaking Down Contracts

Discussion in 'Fan Zone' started by Galian Beast, Jan 23, 2014.

  1. gmoney112

    gmoney112 Well-Known Member

    3,192 Messages
    530 Likes Received
    Few things that needed to be pointed out..

    1. Sean Lee is getting 16m guaranteed. Bowman has 25m guaranteed. We'll make a decision on Sean Lee in 2017. If he still has injury issues he'll be let go. His contract is set up so we can restructure him and eat minimal dead money in the future. It was a good deal.
    2. Ware is a HoF pass rusher but he's been hampered and he's accounting for 1/10 of our total cap in 2014. This begs the question, what is the opportunity cost of keeping Ware? If we keep him, we won't be signing anyone in FA. I don't want to release him but injuries have piled on the last few years. Restructuring, in the event that Ware is not the HoF player expected, exacerbates the cap mismanagement we have all been so loving subjected to in the last few years. It really is a Catch 22.
    Corso, BigStar and Galian Beast like this.
  2. Hoofbite

    Hoofbite Well-Known Member

    32,528 Messages
    2,215 Likes Received
    I disagree. The guaranteed money is pretty much all that matters because if the contract turns bad that's what's left over in the form of dead money.

    Also, those playing time numbers are in addition to what he's scheduled to make and raise the value to a potential $51M.

    The fact that Lee's contract is backloaded makes it less likely he'll see those later years and if they restructure it means that they'll have more dead money when they do let him go.

    I'm not really sure why backloading is all that appealing to you.

    Seems like a quick way to be in a position where you have to decide if a guy's performance is worth the high cost, and if not you're still going to accept a good chunk of dead money.
  3. bkight13

    bkight13 Well-Known Member Zone Supporter

    2,386 Messages
    689 Likes Received
    Ware can't logically be next year for 12.75m even with a restructure. If he was willing to eat 4-6m and take a restructure it would probably be worth it.
  4. Hoofbite

    Hoofbite Well-Known Member

    32,528 Messages
    2,215 Likes Received
    I don't think that's the case. It's a "bonus" which means it's extra if he meets the terms of those conditions, just like any other incentive.

    I don't think the NFLPA would ever allow such a contract because teams could just sit a guy and screw the player over.

    Here's the ESPN article:

    http://espn.go.com/dallas/nfl/story...ix-year-42-million-extension-according-source
  5. gmoney112

    gmoney112 Well-Known Member

    3,192 Messages
    530 Likes Received
    Not sure if by logically you meant it wasn't smart or technically possible, but it is possible (according to overthecap calculator anyway. if that's accurate). But I agree it probably isn't smart.
  6. bkight13

    bkight13 Well-Known Member Zone Supporter

    2,386 Messages
    689 Likes Received
    You can't just stop restructuring in the middle of these deals. They have committed to this method and the only way out would be to tank for 2 years and eat all that dead money. It's not whether it is more appealing or not, it's just the reality. Once Romo, Ware and Witten are gone, it may be the time to bite the bullet or maybe the cap keeps going up and all of this worry is for naught anyways.
  7. Galian Beast

    Galian Beast Well-Known Member

    9,023 Messages
    1,302 Likes Received
    I think you're confusing guaranteed money and signing bonus.

    Guaranteed money is what has to actually be paid to the player, and thus also has to be accounted for on the salary cap. Signing bonus on the other hand is money that is prorated over the duration of a contract, at most 5 years. The guaranteed money in these cases generally guarantees the payment of the first couple years of the contract, and doesn't have any effect on dead money.

    A misconception about backloaded money meaning that they'll never see the money. That isn't the case, especially as we just saw with Romo. What generally happens is that in the last year or so of a players career, they'll see those contracts extended and those base salaries prorated in a restructure if they are worth keeping.

    Backloading is a good idea because 1 dollar in 2013 is worth a lot more than 1 dollar in 2017. So all things being equal you'd rather backload. Also signing players to contracts early enough usually gives you cap savings that offset dead money later on.

    The Jay Ratliff deal was hailed as a terrible deal, but that doesn't take into account that Ratliff generally outplayed his original deal.

    By investing in your high profile players you can avoid signing free agents to big money when they're much older. Sometimes this doesn't work out, sometimes it does.

    Generally speaking I would say that you shouldn't sign a player to more than 1 extension, and that is something that I think gets this team in a bit of trouble.

    For example the 7 million we would pay Sean Lee in 2019, is almost certainly going to be less than the going rate for top free agent linebackers in 2019... How do I know that? Because 7 million per year already puts Sean Lee outside of the top 10 paid inside linebackers TODAY, let alone in 2019. So the question is Sean Lee at top 15-20 inside linebacker, do you expect him to be in 2019? Then absolutely you should make the deal that they did.
  8. bkight13

    bkight13 Well-Known Member Zone Supporter

    2,386 Messages
    689 Likes Received
    I definitely meant smart. It's very easy to do, but in terms of dead money vs his cap hit, now is the best time to make the big decision with Ware. I would insist on a big pay cut or tell him he will be released.
  9. Hoofbite

    Hoofbite Well-Known Member

    32,528 Messages
    2,215 Likes Received
    Sean Lee's base salary in 2014 doesn't even free up that much money. $3.6M maybe, because 1/5th of the amount is applied to the current year and with a scheduled $5.5M base salary, you probably aren't pulling off much more than $4.5M.

    Restructuring Lee wouldn't do much and it increase his cap charge for the years when his cap number will already go up because of his base salary and could go up because of the playing time aspect.
  10. bkight13

    bkight13 Well-Known Member Zone Supporter

    2,386 Messages
    689 Likes Received
    That 3.6m is huge this year. That could be used a sign a top DT/DE. And if it doesn't matter to you this year, then it should mean even less spread over 4 more years. They are not cutting Lee anytime soon.
    Galian Beast likes this.
  11. Galian Beast

    Galian Beast Well-Known Member

    9,023 Messages
    1,302 Likes Received

    This strategy is actually a lot more sound than people give it.

    If you look at our top 10 contracts they are

    1. Tony Romo
    2. DeMarcus Ware
    3. Brandon Carr
    4. Miles Austin
    7. Jason Witten
    6. Sean Lee 1
    9. Orlando Scandrick
    5. Morris Claiborne R
    8. Dan Bailey 1
    10. Tyron Smith R
    (11. Dez Bryant) R

    3 of those are on rookie contracts, and two of them are on their first extensions (can't recall if Austin has been extended once or twice).

    Once Ware is gone, generally we won't be all that top heavy. There is no real biting the bullet once the top heavy contracts are gone. Even extending Smith and Bryant shouldn't put us in bad shape once Ware and Austin are gone.

    Eventually Romo will be replaced, and when that happens we will presumably have a much cheaper contract on our hands at QB.

    I think the biggest question cap wise is what we should do with Murray.
  12. Galian Beast

    Galian Beast Well-Known Member

    9,023 Messages
    1,302 Likes Received
    Ah, I thought it was likely to be earned incentives which are cooked into the contract. Thanks for the correction.
  13. Galian Beast

    Galian Beast Well-Known Member

    9,023 Messages
    1,302 Likes Received
    If Ware is restructured, I might have to consider taking a break from the Cowboys for a while.
  14. bkight13

    bkight13 Well-Known Member Zone Supporter

    2,386 Messages
    689 Likes Received
    I agree, but I think they have to add at least one high priced DT/DL this year. His cap hit will spike around the time Dez and TSmith spike, so the cap with always be an issue, but never a huge problem.

    I would try to keep Murray, but not a Barber type deal. Maybe around 4m a year.
  15. Galian Beast

    Galian Beast Well-Known Member

    9,023 Messages
    1,302 Likes Received
    I agree with you completely. I would be thrilled if they signed TWO or three free agent DT/DL. Personally I would go after Henry Melton and Linval Joseph. Depending on how much the market demands for Melton coming off that ACL.

    I think maybe you can get away with starting Selvie for a year if you sign two free agent defensive tackles, and draft a defensive end high in the draft.

    As for Murray, not sure I could spend 4 million a year on a running back who can't stay healthy at least not with a coaching staff who can't run the ball consistently.
  16. bkight13

    bkight13 Well-Known Member Zone Supporter

    2,386 Messages
    689 Likes Received
    I was thinking a 5/20m type deal that could easily be a 3 yr deal. Not a 7/45m like Barber got.
  17. Hoofbite

    Hoofbite Well-Known Member

    32,528 Messages
    2,215 Likes Received
    I'm not confusing the two. I know It generally doesn't impact dead money because players play beyond those years but it's still a commitment to the cap regardless of what happens.

    And now Dallas is in a position where they'll prorate 2014 and as a consequence of not being able to take a $27M cap hit in 2015 for Romo they'll prorate that year as well.

    As a result they'll finish 2016 and be looking at a 37 years old QB (who's taken countless more hits after 2 surgeries) to start the season who's cap charge will be $25M but who's dead money would be $20M if he were cut.

    When you prorate as part of an extension you aren't saving anything because you're also going to have to hand out signing bonus money to get that extension done. So now you're taking cap hits for base salaries, signing bonus, and money paid during the previous contract. Romo currently has over $13M in cap charges from his previous deal spread out across the first 4 years of his current deal.

    Yet you have more dollars in 2017 precisely because the cost of all contracts generally increases and the cost of signing new contracts always increases. You won't be able to sign a player in 2017 for the same price as you would have in 2013 but you don't need to because you have more cap space to work with so your relative ability to acquire players is much the same.

    I think backloading has less to do with the relative worth of a dollar and more to do with not having to pay at all, which is why players don't go for those DeAngelo Hall/Oakland Raider contracts anymore that slot money into years that will never be seen.

    As far as signing players earlier, it's all cyclical so relative to some other team you're always in a position of signing your guy either a year earlier or a year later depending on which team you want to compare to. Signing someone sooner just means you have to sign that player (or his replacement) sooner down the road.

    That's irrelevant. You can't accept bad deals moving forward based on past performance because there's no guarantee that you're going to make up that lost value by another player who is currently playing at a level that is exceeding his pay. What Jay Ratliff did in 2008 doesn't mean anything for 2014.

    Money is money. Whether you pay a big free agent from another team or pay a player of your own who would be a big free agent.

    Sean Lee's contract is one of the few that I actually like, provided they do not restructure it. That said, given the choices of spending money on a young guy who's arrow is pointing up or spending money on a 33 year old Sean Lee, which one would actually represent the best use of $7M?
    CyberB0b likes this.
  18. Galian Beast

    Galian Beast Well-Known Member

    9,023 Messages
    1,302 Likes Received

    Maybe a 5/20 with significant backloading and not a huge signing bonus, but I think the market would pay him more than that.
  19. Galian Beast

    Galian Beast Well-Known Member

    9,023 Messages
    1,302 Likes Received
    You specifically brought up dead money, and there really isn't a significant effect on dead money, you don't normally pay these guys and cut them a year later.

    When Dallas made the commitment to Romo they planned on having him for more than 3 years. Going into 2017, we'll be more than able to afford Romo. His base salary actually dives in 2016. And in 2017 all he has left is signing bonus (outside of new restructuring). The reality is that his cap figures are more than manageable going forward.

    You confused things again. Players contracts become more expensive, which is a reason to sign them earlier rather than later. Check. Money is cheaper later than earlier. Check. These are all reasons to sign a player now and backload their contract. Which still allows you to spend more money in the future.

    Imagine two players

    Player A makes 70 million in 10 years and Player B makes 70 million in 10 years.

    Player As contract looks like this

    10,10,10,10,10,10,10

    Player Bs contract looks like this

    7,8,9,10,11,12,13

    In the case of Player B, he allows you to manage the cap a lot more in years 1,2,3 than player A's contract does.

    Year 4 is equal, however in years 5,6,7,8 the salary cap has increased, so as an overall percentage of the salary cap this contract has actually decreased. And by paying the player more in those years to a closer level to his peers, there is less chance that he will holdout.

    The going rate for this position in years 5-8, might be 14-16 million per year.

    By backloading, you give yourself a lot more flexibility in the earlier years of the cap, you also can cut ties will a player who isn't performing. It's why every team backloads.

    You've come to your own conclusion on my statement about Ratliff. I didn't say his contract extension was a good one, rather that is the risk you pay when you extend a player (especially an older one), but the principle of extending players and backpaying them is sound, and had Ratliff continued to play well like Witten for example, it would have worked itself out to our benefit.

    Generally when you sign a free agent from another team you're going to pay the current market price for them, whereas if you have signed your own player long term you'll come underneath the going market value, even if it is backloaded.
  20. jterrell

    jterrell Penguinite

    19,516 Messages
    1,322 Likes Received
    the strategy is not sound. we dont need to look farther than our current cap issues to realize that.
    very seldom do players get better as they get older once they are past cheap rookie contracts.
    you do not want to FORCE yourself to pay them more later by having the cost to remove them from the roster be so high it is pointless.

    ware is the prime example.

    it is cheaper to keep him(granted via scheduled restructure) than cut him.
    we have no real leverage for a pay decrease which is why his agent is chirping.

    we dont need to do anything with murray.
    let him play out his rookie deal then deal with him.
    locking him up early makes zero sense for that position and that player who is similarly out of action as sean lee.

Share This Page