Dak Prescott negotiations - how does the math add up?

TheSkaven · May 26, 2020

Proof said:
The deal he passed up would’ve started the following year. It wouldn’t have erased his final 2 mil salary. So he didn’t lose anything other than getting some signing bonus money fronted sooner than later.

I don’t think that’s right. It was an offer made in August 2019, typically those extensions start immediately. I’ve never heard of a player signing an extension and they don’t get the salary until the following season.

glimmerman · May 26, 2020

TheSkaven said:
That wasn’t even the question, did you read the post?

Here are the cliff notes: by not signing the original deal and playing for $2.025M in 2019, Dak missed out in between $28M and $30M dollars. To make that up, $35M per year won’t cut it, because the difference is what he’s make over what he could have made is between negative.

No one is talking about whether the Cowboys should sign the player. The question is what is Dak’s agent’s end game? If it’s anything less than $40M per year, he should have signed the original deal.

He should have signed it. Maybe pushed for 32 but signed the original deal. Daks agent has screwed him. Once wentz got signed then I knew there would be trouble. Then goff got more. Dak went from saying he don’t expect to get Wilson money because he hasn’t been to a SB to now wanting more than Wilson. Not sure if we lowballed him or if it was a fair offer but I think it was JJ wanting a 6 or 7 year deal and Dak wanting shorter years so he can go back to the table and cash in again. That’s his only choice now if he wants to make up the money that his agent screwed him out of. Should have signed a short term extension...

glimmerman · May 26, 2020

TheSkaven said:
I don’t think that’s right. It was an offer made in August 2019, typically those extensions start immediately. I’ve never heard of a player signing an extension and they don’t get the salary until the following season.

I think that’s one reason they like signing a extension. They get that sweet bonus up front.

bandfan · May 26, 2020

Everybody is missing the one number that is driving all of this....3%

HanD · May 26, 2020

TheSkaven said:
I don’t think that’s right. It was an offer made in August 2019, typically those extensions start immediately. I’ve never heard of a player signing an extension and they don’t get the salary until the following season.

If you look at wentz as an example, he had a 4 year rookie contract. they picked up his 2020 option. then he signed his 4 year extension. His 4 years of new contract years are added to the end of his 2020 option year. he got the signing bonus up front but his actual salaries for the new contracts don't start until after his original/5th year option is played out. IOW his new contract that he signs starts in 2021.

https://www.spotrac.com/nfl/philadelphia-eagles/carson-wentz-18950/

Proof · May 26, 2020

TheSkaven said:
I don’t think that’s right. It was an offer made in August 2019, typically those extensions start immediately. I’ve never heard of a player signing an extension and they don’t get the salary until the following season.

what I’m saying is that what ever money they get is from the next years allotted pool. Whether he accepts it then or the following year it doesn’t go away, or replenish.

DandyDon52 · May 26, 2020

TheSkaven said:
That wasn’t even the question, did you read the post?

Here are the cliff notes: by not signing the original deal and playing for $2.025M in 2019, Dak missed out in between $28M and $30M dollars. To make that up, $35M per year won’t cut it, because the difference is what he’s make over what he could have made is between negative.

No one is talking about whether the Cowboys should sign the player. The question is what is Dak’s agent’s end game? If it’s anything less than $40M per year, he should have signed the original deal.

that isnt how it works, his last year would still be 2 mil or whatever it was.
if it is possible the jones should have given him a new deal when he was named the # 1 qb over romo. Instead of having him play
on the rookie contract which was way too small for a starting qb.

Rayman70 · May 26, 2020

TheSkaven said:
That wasn’t even the question, did you read the post?

Here are the cliff notes: by not signing the original deal and playing for $2.025M in 2019, Dak missed out in between $28M and $30M dollars. To make that up, $35M per year won’t cut it, because the difference is what he’s make over what he could have made is between negative.

No one is talking about whether the Cowboys should sign the player. The question is what is Dak’s agent’s end game? If it’s anything less than $40M per year, he should have signed the original deal.

END GAME? Getting paid.

csirl · May 26, 2020

I dont believe the Cowboys made any offer last August. Doesnt make sense to extend a QB when you are sweating the final year of your coaches contracts and are expecting to change everything at seasons end.

The media speculation is just that and more than likely drummed up by Dak's agents publicist.

To date, Cowboys have followed GM 101 to the letter with Dak (which is hard to believe with JJ).

GM 101 says you dont extend a QBs contract if (i) you dont have to and (ii) you've never seen him play in the system your new coaching squad will use.

GM 101says no decision will be made until at least mid-season and more likely at seasons end.

Risk reward chart says the risk of being in cap hell due to wasting 150m is much higher than the risk of the price going up a few million due to the player working out (and theplayer working out is a positive)

This would apply to any QB, not just Dak. The fact that there are existing uncertainties over Dak strengthens the argument for waiting.

darthseinfeld · May 26, 2020

TheSkaven said:
I don’t think that’s right. It was an offer made in August 2019, typically those extensions start immediately. I’ve never heard of a player signing an extension and they don’t get the salary until the following season.

They get the bonus money upfront. The salary escalation starts the next season.

HanD · May 26, 2020

DandyDon52 said:
that isnt how it works, his last year would still be 2 mil or whatever it was.
if it is possible the jones should have given him a new deal when he was named the # 1 qb over romo. Instead of having him play
on the rookie contract which was way too small for a starting qb.

can't extend rookies until after the 3rd year (last year's offseason for dak)

DandyDon52 · May 26, 2020

HanD said:
can't extend rookies until after the 3rd year (last year's offseason for dak)

Well ok , but what about a new contract to simply replace the 1st one>?

HanD · May 26, 2020

DandyDon52 said:
Well ok , but what about a new contract to simply replace the 1st one>?

you typically can't replace a contract from my limited understanding. they are extensions to the existing ones. further up on this page i showed how wentz's new contract was actually an extension of 4 years that took place after he finished his 4 rookie years and his 5th option year.

ksg811 · May 26, 2020

Your logic is flawed based on using solely AAV. AAV does not equal cash flow. There were also extenuating circumstances that made it logical for him to wait from a cash flow perspective. I'll try to break down Dak/his agent's thinking.

By waiting a year, he has increased his total contract value. He allowed other QBs (Goff and Wentz) to reset the market and proceeded to outplay them, increasing his leverage to negotiate higher deals than them, thus increasing his guarantees, which in turn would increase his 3 year cash flow since most big contracts pay out the guarantees in 3 years regardless of length to allow future flexibility to cut/trade a player.

Now, likely the bigger factor in Dak's cash flow logic on waiting had to do with the contract rules that were in place last year as opposed to this year due to the new CBA. Because there was no new CBA signed as of last offseason, teams were at a disadvantage in terms flexibility of contract structures due to the 30% rule. The 30% rule states that contract years subsequent the final CBA year (which would have been this year) can not see raises greater than 30% of the player's salary in the final CBA year. Salary in this case means pretty much anything but signing bonus

As we know, teams like to sign big contracts with high signing bonuses and low early year salaries that balloon in later years ("funny money") to prorate the salary cap impact. What the 30% rule did was prevent those traditional ballooning salary structures. What teams did to counteract this rule separate a big signing bonus into two or three smaller bonuses. The traditional prorated signing bonus would be much smaller than typical followed by a slightly larger year 2 (final CPA year) Roster bonus or Option bonus. Roster bonuses hit the cap in the year signed and option bonuses are prorated over the length of the deal max 5 years.

Look at the contract Zeke signed with the Cowboys last season. He signed a small $7.5m signing bonus but received a $13m option bonus at the start of this season. You can also look at Jared Goff's and Carson Wentz's deals from last season and see the same idea.

Since there is a new CBA in place, there is no 30% restriction. Dak will receive a huge signing bonus upfront (upwards of 60+ million) on a 5/$175 million deal with guarantees around $115 million pr higher paid through 2022, a 3 year out for the team. Add that to the $2.025 million he made last year and that's a 4 year cash flow of $117 million.

Were he to have signed last year, he would have signed for less total value, plus the last year of his rookie deal would have been included in the total structure, making it a longer deal for cap purposes. Even at the high end, a 5 year deal He probably would received a $20 million bonus at signing with a salary still around $2 million. He would have received another bonus of 20-25 million that would be prorated with another low salary likely around $10 million. He'd likely have all guarantees paid through 2022, so his 4 year cash flow through 2022 would likely be around $110 million or so on a total contract value of 6 years $167 million.

As you can see, he's increased his max contract value, guarantees, and 3-4 year cash flow by waiting. Hopefully I explained things well enough but feel free to ask any questions you may have.

jaythecowboy · May 26, 2020

TheSkaven said:
I don’t think that’s right. It was an offer made in August 2019, typically those extensions start immediately. I’ve never heard of a player signing an extension and they don’t get the salary until the following season.

They get the signing bonus immediately, but that money is prorated over the life of the deal. As far as how many years dak would have been under contract it is the same. If Dak signs a 4 year deal now it would be years 2020-2023. Had he signed a 4 year extension before the start of last season, he still would get the $2 million salary for 2019, and then the new deal would start 2020-2023. The only difference is Dak gets the signing bonus up front. So if Dak hasn't really lost anything in the long term yet. It simply has been deferred. That being said, if he does horrible and his stock lowers and he is forced to sign a lesser contract then he will have lost money.

jaythecowboy · May 26, 2020

ksg811 said:
Your logic is flawed based on using solely AAV. AAV does not equal cash flow. There were also extenuating circumstances that made it logical for him to wait from a cash flow perspective. I'll try to break down Dak/his agent's thinking.

By waiting a year, he has increased his total contract value. He allowed other QBs (Goff and Wentz) to reset the market and proceeded to outplay them, increasing his leverage to negotiate higher deals than them, thus increasing his guarantees, which in turn would increase his 3 year cash flow since most big contracts pay out the guarantees in 3 years regardless of length to allow future flexibility to cut/trade a player.

Now, likely the bigger factor in Dak's cash flow logic on waiting had to do with the contract rules that were in place last year as opposed to this year due to the new CBA. Because there was no new CBA signed as of last offseason, teams were at a disadvantage in terms flexibility of contract structures due to the 30% rule. The 30% rule states that contract years subsequent the final CBA year (which would have been this year) can not see raises greater than 30% of the player's salary in the final CBA year. Salary in this case means pretty much anything but signing bonus

As we know, teams like to sign big contracts with high signing bonuses and low early year salaries that balloon in later years ("funny money") to prorate the salary cap impact. What the 30% rule did was prevent those traditional ballooning salary structures. What teams did to counteract this rule separate a big signing bonus into two or three smaller bonuses. The traditional prorated signing bonus would be much smaller than typical followed by a slightly larger year 2 (final CPA year) Roster bonus or Option bonus. Roster bonuses hit the cap in the year signed and option bonuses are prorated over the length of the deal max 5 years.

Look at the contract Zeke signed with the Cowboys last season. He signed a small $7.5m signing bonus but received a $13m option bonus at the start of this season. You can also look at Jared Goff's and Carson Wentz's deals from last season and see the same idea.

Since there is a new CBA in place, there is no 30% restriction. Dak will receive a huge signing bonus upfront (upwards of 60+ million) on a 5/$175 million deal with guarantees around $115 million pr higher paid through 2022, a 3 year out for the team. Add that to the $2.025 million he made last year and that's a 4 year cash flow of $117 million.

Were he to have signed last year, he would have signed for less total value, plus the last year of his rookie deal would have been included in the total structure, making it a longer deal for cap purposes. Even at the high end, a 5 year deal He probably would received a $20 million bonus at signing with a salary still around $2 million. He would have received another bonus of 20-25 million that would be prorated with another low salary likely around $10 million. He'd likely have all guarantees paid through 2022, so his 4 year cash flow through 2022 would likely be around $110 million or so on a total contract value of 6 years $167 million.

As you can see, he's increased his max contract value, guarantees, and 3-4 year cash flow by waiting. Hopefully I explained things well enough but feel free to ask any questions you may have.

.
You explained it much better than I did, lol

JoeKing · May 26, 2020

TheSkaven said:
I don’t think that’s right. It was an offer made in August 2019, typically those extensions start immediately. I’ve never heard of a player signing an extension and they don’t get the salary until the following season.

It happens all the time. That's why it's called an "extension". It does not override the previous contract, it's just added to the end of it, thus extending it. Otherwise it would just be called a new contract.

Clove · May 26, 2020

4 years and he's back on the market for a boatload. Sounds reasonable to me.
Before we start going off on other's salary, we should take a look at what we do on our own personal jobs, then maybe, and possibly we'd understand.

TheSkaven · May 26, 2020

bandfan said:
Everybody is missing the one number that is driving all of this....3%

Explain. I’m not following you.

TheSkaven · May 26, 2020

Clove said:
4 years and he's back on the market for a boatload. Sounds reasonable to me.
Before we start going off on other's salary, we should take a look at what we do on our own personal jobs, then maybe, and possibly we'd understand.

Well that isn’t easy because there are no franchise tags in my industry but let me give it a shot at apples to apples, just lop off two zeros.

Im a data scientist and I am scheduled to make $20,250 per year in 2019 (Dak’s $2,025,000 in 2019).

At my annual review, my boss says, “Skaven we would like to offer you $300,000 per year for the next 5 years” (Dak’s $30 million dollar offer).

“No, I want $350,000 per year boss. I’ll take my chances and work for my $20,250 per year salary this year and prove to you that I’m worth it”.

Boss loves the idea and only pays me $20,250. I miss out on $279,750 that I could have made.

The next year comes around and boss says, “You’re right Skaven, you are worth that. Here is your $350,000 per year”. But no, I still refuse because I only want a 4 year contract.

Does that work for you, @Clove ? Do you see the flaw in his agent’s logic?

The problem is the same. You see, if I accept that $350,000 per year it’s great because it’s $50,000 per year more than I would have made.

But the problem is that I lost out on $279,750, money that’s just gone. I’m making $50,000 per year more but I’d need 6 years ($50K * 6 = $300K) to make back what I lost, and the contract I’m asking for is only 4 years.

I hope this makes sense. I see most people responding either aren’t reading my post or aren’t understanding what I wrote - maybe I’m being too verbose.

I’m not bashing Dak or saying we shouldn’t pay him, which @Rayman70 seemed to think that I was saying.

I’m saying that Dak left money on the table that, even at the higher salary he wants, isn’t enough to recuperate what he lost. That’s why I believe his real asking price is $40 million per year, because that’s the only way that he comes out ahead in these negotiations.

Clear as mud?

Dak Prescott negotiations - how does the math add up?

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