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News: BTB: Cowboys 2013 Salary Cap: The Ratliff Extension And The Post-Release Landscape

Discussion in 'Fan Zone' started by NewsBot, Oct 17, 2013.

  1. NewsBot

    NewsBot New Member

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    Yes, it would be a very bad idea to plan on a 30-year-old, undersized nose tackle to be a competent player for an additional seven years.

    The Cowboys released nose tackle Jay Ratliff yesterday after he's failed to play in a game since Week 11 of the 2012 season. Jay Ratliff did not play a single down of football during the contract extension he was given at a time when Dallas didn't have to. That makes the contract a bad business deal.

    I think everyone can agree on those facts.

    I have no qualms with that stance. My dissension is, that isn't really what the Cowboys did. Make no mistake, the Cowboys handled the Jay Ratliff contract situation poorly, but I just don't believe the mistake was made in the way it's been discussed. The "Cowboys made a big mistake by inking Jay Ratliff to a 5-year, $40 million extension with $18 million guaranteed" take is what I'm speaking of.

    I guess this is a bit of nitpicking semantics; it just frustrates me when people repeat short takes from a complicated situation and choose the wrong snippets.

    People seem to harp on the $18 million guaranteed, because as we all know, the guaranteed money is really the only part of an NFL contract that means anything. Unless, of course you are using the contract to cite bad team management and want to make the error as egregious as possible.

    Here's the rub. The two years remaining on Jay Ratliff's original contract were worth over $8 million dollars. In essence, outside of the $10 million signing bonus which was perfectly reasonable in my estimation, the Cowboys didn't originally guarantee a dime of Ratliff's "extension".

    They gave him $10m basically as a reward for outplaying his prior contract, and higher base salaries over the course of the five-year extension, but the Cowboys were in a perfect situation to walk away from Ratliff whenever his skills showed a major decline.

    At the time of Jay Ratliff's extension, entering the 2011 season, Ratliff was indeed underpaid. The Cowboys signed him to a very team-friendly contract during the 2007 season: five-years, $20.9 million. After three consecutive Pro Bowl seasons, he was definitely outplaying his contract with two years remaining.

    In essence, the Cowboys gave Ratliff $10 million as a "yeah, you've been underpaid the last three years" thank you gift, and were able to spread $6m of it over the three years after his original contract would expire. That's it. If they had left it at that, it really wasn't a bad contract at all.

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    The salary cap is a fluid thing for every team. There are many incentives that are written into the deep crevices of every contract that can be interpreted by different sections and subsections of the 2011 CBA. Since complete player contract details rarely ever make it to the regular fan, many are often left to regurgitate what they hear from pundits and writers. It isn't always correct however, simply because the information specifics are so hard to come by.

    That's why I always like to use estimates when it comes to these things. I round up, I round down, I use the term "approximately" a lot. Different people have different information.

    ESPN's Todd Archer is the Cowboys beat entity that I listen to when it comes to salary cap information. However, the most comprehensive site that I've found over the years has been OverTheCap.com. That is where I currently go to draw information. The downside is that sites like OTC (and Spotrac.com, my former go-to) is that they update their sites once a player is released or re-signed, and the prior information is no longer available currently.

    Yesterday, when news of Ratliff being released circulated, I quickly raced to OTC to get the overall cap ramifications of the release. Ratliff was on the books for a $1.34 million in base salary, and a prorated charge from his signing bonus for $2 million, and a prorated charge from his August restructure for another $732,000. Here's how Ratliff's cap charges looked prior to yesterday.


    Year Base Salary Signing Bonus Restructure Bonus Total Cap Charge Dead Money If Released
    2013 1,340,000 2,000,000 732,000 4,072,000 9,660,000
    2014 5,500,000 2,000,000 732,000 8,232,000 6,928,000
    2015 7,000,000 2,000,000 732,000 9,732,000 4,196,000
    2016 7,500,000 732,000 8,232,000 1,464,000
    2017 10,000,000 732,000 10,732,000 732,000​


    The "Restructure Bonus" you see over this and the next four years? That didn't occur until this past March 11th.

    The real issue, the only issue, is that Dallas used Ratliff's 2013 base salary of $5 million to help create additional room under this year's cap. And that was further exascerbated by using that cap space to put a franchise tag on Anthony Spencer, to the tune of $10.6 million.

    Prior to his release, the Cowboys paid Ratliff approximately 35% of his base salary for the 2013 season, $472,941.

    If Dallas had kept Ratliff at his original deal, then cut him yesterday, he would have cost Dallas $1,764,705 in base salary on the year. Add in his prorated signing bonus of $2m, and his cap hit would have been $3.76m.

    There isn't much difference between that and the cap hit Dallas will now have, which is between $3.2m and $4m depending on whether any of his base salary was guaranteed in the restructure.

    The real difference is that the restructure cost Dallas about $3m in cap space on the 2014 cap. Instead of only having $4m left in unamortized charges, Dallas now has $6.9m remaining. That's all on the books next year.

    Of course, the reason he was restructured was because Dallas had to be under the cap by the start of the new league year, March 12th. Remember, the $3.5m savings from Doug Free's restructure didn't hit until May. Even with that, it's hard to say if Dallas would have had the flexibility to sign a Brian Waters.

    This is all to say that Dallas originally had what I consider a good game plan in regards to Ratliff's extensions. They just backed themselves into a corner with other deals and perceived have-to-haves (Spencer).


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    The discussion of whether or not Dallas had the same diagnosis on Ratliff needing to sit a year, as his agent tried to spin yesterday, is worthy, but not one for this article. I have my doubts as to why Ratliff would run a conditioning test if he and his doctor's fully believed he was not even close to being able to play. Was the pressure from the team that heavy? Does it stem from the December locker room dust-up with owner Jerry Jones? Is the agent spinning a tale trying to get employment lined up for his client in 2014? We simply don't know.

    Salary cap-wise, if Dallas truly had their doubts, than restructuring Ratliff in March was perhaps the dumbest move in the history of history.

    On the bright side, Dallas has now reduced the 2014 impact of Jay Ratliff on the cap by $1.3m. Yes, they have a charge for a player that will not help them. Yes, it will upset most people should Ratliff be playing in another uniform next year and costing Dallas $7m in cap space that could have been spent elsewhere. Yes, his cap hit after release could have been just $4m.

    The real win, however, is the flexibility Dallas has after 2014. Gone are the projected cap hits of $9.7m in 2015, $8.2m in '16 and $10.7m in '17. That frees up money for the extensions of the new guard: Tyron Smith, Dez Bryant, Dan Bailey and Bruce Carter. Again, I think the Cowboys planned for the inevitability of having this room become available. They just went off track by restructuring his deal in March.

    Finally, here are a few salary cap tidbits that I think people might be interested in, or need to be aware of.

    • According to OTC, the 2013 Cowboys salary cap now contains $34m in cap charges that will play 34 downs for the 2013 season. Between the reserve/injured list, dead money from released contracts and the cap penalty... That's a quarter of the 2013 salary cap that is of no use to this team.
    • The Cowboys used approximately $121.68 million of the $123 million 2013 salary cap, pending savings from Ratliff's release if none of his base salary was g'teed.
    • Dallas has 56 players currently under contract for 2014, at the tune of $133m. They also have about $11m in dead money, for a total of $145m. They will still have some work to do as the tv revenue money is not expected to jump the cap until 2015 at the earliest. Missing from the list of accounted players: Hatcher, Waters, Bailey.
    • Dallas currently has 26 players under contract for 2015, at the tune of $124.7m. Missing from the list of accounted for players: The above three plus Dez Bryant, Tyron Smith, Bruce Carter. Included that will probably not be in Dallas: Austin, Orton, Bernie.
    • Cautionary tale - We all love what Jason Hatcher has done for the last year and a half, but he'll be 32 before next season starts. Thankfully, defensive line contracts plummeted last offseason. If that's a trend, than Dallas might be able to retain his services for something rational and reasonable.
    • Demarcus Ware will also be 32 before next season starts. He has a $16m cap hit next year, followed by a $17.5m cap hit in 2015. The good news is, it's mostly written as base salary. Ware is one of the few Cowboys who has never had his current deal restructured. If they moved on from Ware (blasphemy) they would save $7.4 million off of next year's cap. Would he be willing to do a "Doug Free"?
    • Miles Austin's salary structure is all sorts of screwed up. He still has $7.86m in unamortized bonus left on his deal. So even if they cut him and his $5.5m base salary, the savings are minimal. An outright release would only save approximately $400k. A June 1st cut save more for 2014, but lessen the 2015 help. A June 1st 2015 cut seems the most plausible at this point, but Dallas just showed it's willing to take minimal help now and in '14 for big help in '15.
    • Kyle Orton is still on the roster. He has $3.3m unamortized bonus remaining and his base salaries are $3.25m, $3.5m, $3.5m the next three years.
    • Mack Bernadeau would net a $1.4m savings if released next year, and would shave $4.5m off of Dallas' 2015 projected cap number.
    • Jermey Parnell, Phil Costa and Justin Durant all have $1m+ base salaries in 2014 with minimal prorated hits. Look for them to be released in 2014.
    • Drake Nevis and George Selvie, should they continue their play, are already locked in for 2014.
    • Dallas could see substantial cap relief from releasing Tony Romo, Orlando Scandrick, Doug Free, Brandon Carr, Jason Witten (with plenty dead money), starting in 2015.



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  2. MichaelWinicki

    MichaelWinicki "You want some?" Staff Member

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    There's a bunch of good information here.

    Some of it makes you go "OUCH". And some makes you go "Yay!"
  3. starfrombirth

    starfrombirth Well-Known Member

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    • Dallas could see substantial cap relief from releasing Tony Romo, Orlando Scandrick, Doug Free, Brandon Carr, Jason Witten (with plenty dead money), starting in 2015.


    Really? 2 of our all time greats still playing at a very high level, Just about the only 2 DB's that are playing good, and a resurgent Olineman..... and those are who he thinks we should cut?.... Or am i misreading this?
  4. Awakened

    Awakened the Dude abides

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    I don't think he was recommending they be cut.
  5. xwalker

    xwalker Well-Known Member

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    1. They would have owed Ratliff an injury settlement for his 2013 base salary if he was released before the season. It appears that would be 50 percent or more of the pre-restructured base of 5.5M.

    2. Making Ratliff a June 1st cut would have caused his original pre-restructured contract to count against the cap until June 1st. Once they decided to franchise Spencer before Romo's new contract was complete, they were force to restructure Ratliff's contract and all other contracts. They even restructured Orton to save 388k against the cap.

    3. Why would they release Parnell? They have put multiple years into making him a good and reasonably priced player.
    Kaiser likes this.
  6. xwalker

    xwalker Well-Known Member

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    Beware of projected cap numbers when they show the team being drastically over the cap the following year.

    This time last year projections were being quoted as 40M over the 2013 cap and that was without franchising Spencer. That turned out to be completely false.

    The projected numbers don't account for restructures or cuts.
  7. burmafrd

    burmafrd Well-Known Member

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    if you had bothered to read the whole article you would see that he explains it pretty well
  8. Bluefin

    Bluefin Well-Known Member

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    It comes to $145.099M, actually.

    And there are 46 players under contract for 2014, not 56.

    The team will need to restructure several contracts next off-season. Tony Romo and Demarcus Ware will create $19M in room. Sean Lee, Brandon Carr and Jason Witten can create another $12M.

    These five restructures would drop the estimated 2014 cap number to $114.099M.

    If Miles Austin is designated as a June release, that will add another $5.5M when it takes effect (June).

    The current unadjusted cap is $123M, it will probably go up a couple of million in 2014 and the team will carry over any unused space from this season as well (it won't be much, though).

    I know some fans really start biting their nails when the topic of pushing more guaranteed money into future years with new signing bonuses comes up, but that's what's on the menu for 2014.

    Doing this would add just over $8M per season to future caps in 2015-18.

    That's OK.

    The team won't need to restructure bunches of contracts in 2015, Romo is the only one I'm expecting (create $10.3M).


    Overthecap includes Doug Free ($11.02M) in its projection.

    Free's renegotiated contract will void following the conclusion of the 2014, so he will count $3.98M in dead money in 2015 instead of the $11.02M that overthecap shows. That will save $7.04M, Austin will save $4.531M and Bernadeau will save $3.25M.

    Right now, the '15 cap commitment is $124.693M. I'm adding $8M for the contract restructures I did in '14.

    That brings it up to $132.693M.

    Romo's contract will be restructured again (create $10.3M) to go along with the room saved on Free, Austin and Bernadeau ($14.821M), bringing the '15 cap number down to $107.572M.

    I know some big extensions are coming, but that's still a good bit of wiggle room.

    Remember, the team usually designs new deals to count less in the early years to help with the cap. Dez and company shouldn't take up a lot of cap space until many of the current big money deals are off the books.


    The team can almost always find a way to get a deal done, but Jason Hatcher might need to take a home team discount if he wants to finish his career in Big D.


    Demarcus Ware would really have to struggle with injuries all season before he would be asked to take a pay cut, IMO.

    I expect his deal will be restructured, again, in 2014.

    The BTB writer, KD Drummond, is dead wrong about Ware never having his deal restructured.

    It's a yearly occurrence.

    Ware's deal was been redone in 2011, '12 and '13, the last time it wasn't fiddled with was 2010, the uncapped season.

    It isn't an issue with me because Ware has ginormous base salaries every year.

    That means the team can create $13M or more by designating Ware as a June release in '15 or '16, should the need arise.

    I'm a huge Miles Austin fan, but he needs to start producing big time if he wants to remain a Cowboy next season, IMO.

    The team can create $5.5M in cap room by designating Smiles as a June release in 2014. Given his injuries, future cap numbers and the current play of rookie Terrance Williams, soph Cole Beasley and 3rd yr Dwayne Harris, it screams to turn the page on Austin next year.

    Williams will be 25 next year, so there's every reason to let him become a starter ASAP. He should be competing with Austin for snaps right now.


    Jason Garrett has always wanted a veteran back-up quarterback, so I'm leaving Kyle Orton alone.


    I'm keeping Jermey Parnell, he's the swing tackle until Darrion Weems or someone else comes along and dethrones him.

    Phil Costa and Justin Durant will save $2.75M in '14, which would drop the cap commitment next year to $111.349 along with the restructures discussed at the top of the post.


    Mackenzy Bernadeau makes for a better game day reserve than Costa, so I'd give him the chance to take a pay cut and remain part of the team in 2014.

    Berny has a $2.75M base salary next year. I'd offer $1.25M, a reduction of $1.5M (which is what Costa is set to make). I'd say take the pay cut and Costa is gone instead of you.

    That would bring the '14 cap down to $109.849M (not counting Austin's $5.5M, which would come in June).


    Romo's deal is designed to be restructured in '14 and '15, and I expect it to happen barring career ending injury.

    The team would want to until 2017 (save $3.3M or $14M in June) to cut Romo, but it could be done as soon as 2016 using the June tag (recoup $8.5M but eat $19.6M in '17).

    If B.W. Webb is legit, Orlando Scandrick could face the axe in '15 (save $3.498M or $5m in June). The team shouldn't need to cut Scan, cap room should be fine, it would simply come down to Webb pushing him out the door.

    Free's contract will void following the '14 season.

    Brandon Carr will be fine unless his play falls off drastically.

    The same goes for Senator Witten.
  9. rynochop

    rynochop Well-Known Member

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    What am i missing on the cap savings on an Austin release? 400k vs 5.5 mi, yours.?
  10. CowboyStar88

    CowboyStar88 Well-Known Member

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    Thank you BF! This should be a sticky at the too for all the panic posters about the cap. So essentially Dallas will be just fine with the cap. Unless I missed something what about Spencer? Obviously if he isn't franchised again that's 10 mil they won't commit to either. For all the crap Stephan gets he really is good at the cap stuff.
    Kaiser likes this.
  11. Bluefin

    Bluefin Well-Known Member

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    It depends on how the team releases him.

    A normal off-season release in 2014 would see all of Miles Austin's remaining pro-rated signing bonus ($7.8556M) or "dead money" accelarate into the '14 cap, which would result in a savings of only $393,800K.

    That wouldn't even cover the cost of a rookie taking his place on the roster.

    If a team waits until June 2nd, it can release the player without having all of the dead money hit that year. Only the player's yearly pro-ration of signing bonus ($2.7494M with Austin) would be on the cap with the team recouping the player's base salary ($5.5M with Austin).

    The remainder of the dead money ($5.1062M for Austin) hits in the following season's cap (the team would still save $4.5312M in 2015 for Austin).

    Teams can designate two players every off-season as June releases if they don't want to wait for the month to actually arrive.

    There is no benefit to the team for doing this, they don't get to use the cap space until June no matter what, it just gives the player a better chance of landing a new contract in free agency.

    If Austin is a June release in the off-season, Dallas will recoup his $5.5M base salary.
  12. bkight13

    bkight13 Well-Known Member Zone Supporter

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    The big take away I get is that the so called "worst" extension in history, really wasn't that bad. Of the 18m guaranteed, 8m of that was paid in 2011 and 2012 as base salary that he was getting anyways. Add to that 4m of the "new" 10m signing bonus that was pro rated in 2011 and 2012, that left only 6m in commitments over his last 5 years. More than reasonable for a Pro Bowl player.
  13. jterrell

    jterrell Penguinite

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    Go back and read what I wrote you yesterday because this is saying the same thing.
    You are tilting at windmills here.

    The issue with how the Cowboys handle contracts is the yearly restructure "plan".
    You can't use it (the restructure plan) as both excuse and savior.

    They could have simply extended Romo earlier and voila... cap space cleared up.
    Then they could have cut Ratliff post June 2nd and avoided much of the cap hit next year.

    As to the mentioned cuts, no one was suggesting we cut Ratliff 2 years ago.
    Things happen quickly in the NFL.

    What we do know is these Cowboys are going to be bargain shoppers until the cap rises substantially because they are always playing a game of push it to next year and never have any money.
  14. Doomsay

    Doomsay Well-Known Member

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    Great, great article. It really illustrates the negative consequences of constantly restructuring existing contracts to squeak under the salary cap every year. This is a worst case example, but the constant restructurings increase overall player costs (in terms of cap) and increase the likelihood of dead cap creation.
  15. jterrell

    jterrell Penguinite

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    Logic dictates Dallas will release Miles come June 2nd 2014 unless he agrees to a restructured, friendlier deal. --see Doug Free.
    Why might Miles do this? Because like Free he could take a 1 year pay cut but remain in a good spot in an explosive offense and then increase his worth for the following season.
    Players do not like entering free agency on down or injured seasons --not that Miles is guaranteed of every being injury free again.
    Either way Austin will cost at least 3m less than it shows on the books.

    They will early restructure Romo/Carr/Ware to simply hand them 80% or so of their bases in bonuses. That will clear up ~25m.

    Sean Lee immediately becomes a candidate for another early restructure and we could free up another 3m that way.
    HOPEFULLY the team is content there.

    If they then live with everyone's expected bases they can begin to gain some flexibility with guys like Witten and others who will eventually be Jay Ratliff.
  16. jterrell

    jterrell Penguinite

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    You are absolutely correct but:
    1. Fans largely are gullible shills that by now welcome any reason to belch Jerry Jones name.
    2. The news cycle has zero incentive to paint this in a realistic light. Much better to blast Jerry and Jay then to point out the reality of the situation.
    rocyaice likes this.
  17. jterrell

    jterrell Penguinite

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    No, Stephen isn't good with the cap.
    Not under this CBA.
    He is using the previous CBA's methodology and it is dated and failing.

    The two teams using it are the Cowboys and Steelers. Look at the state of those cap situations for why it is a bad idea.

    And Spencer counts zero on next year's cap right now. As does Jason Hatcher or any other free agent.

    We will clear the cap space pretty easily.

    FILLING the empty roster spots with able bodies is another thing.
    Common Sense and visionary like this.
  18. jterrell

    jterrell Penguinite

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    The problem with the thinking ahead thing is well you ultimately think wrong.

    1. This team is stupid if it restructures Witten again. He has earned his money so pay it, let it hit the cap and then when he has to be released it can happen without a painful cap hit.
    2. Doug Free has earned a job here next year. We've just got the OL playing well and it would be silly to release him.

    The farther out you get with cap thoughts the less likely they are to be accurate.
    Many had Scandrick already gone then he simply beat out Mo.
    Webb may be a Mo replacement not a Scandrick one.
    Common Sense and visionary like this.
  19. Doomsay

    Doomsay Well-Known Member

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    Yup, we are going to create a whole new tranche of guaranteed money to pay for the tranche of guaranteed / dead money we created this year. It is interesting that they have never restructured Ware, that could be meaningful next year, if he can't regain his health.
    Common Sense likes this.
  20. Common Sense

    Common Sense Well-Known Member

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    Quoted for emphasis.

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