Dak Prescott negotiations - how does the math add up?

[TheSkaven]

Sorry to create another Dak thread, ladies and gentlemen, but I believe that this one will add value to the public discourse.

Can one of you math geniuses help me to understand the Dak Prescott / Todd France negotiation strategy? Because for me, the numbers are not adding up.

I tried to provide links to source everything mentioned below.

In the summer of 2019, the Cowboys offered Dak a deal in the $30 million per year range. Some outlets report that he was actually offered $33 million per year.

He rejected the deal and instead played out the final year of his rookie contract, in which he earned $2.025 million dollars. This is about $28 million in lost earnings for 2019, or $31 million if the Clarence Hill report is correct.

According to reports, there is a new offer in the table now. It’s a $175 million dollar deal which pays Dak $35 million per year.

Dak has rejected this offer as well. If no deal is done, he will play on the franchise tag which will pay him $31.4 million dollars, a difference of $3.6 million dollars.

Can someone please help me understand this negotiating strategy and why it makes financial sense? That’s not even mentioning the enormous risk Dak is taking that he could get injured.

Let’s assume first that the Cowboys cave in July and Dak gets $35 million per year over 4 years. That means he’ll earn $5 million more than he would have if he signed the deal offered in August 2019.

Over the lifetime of the contract, 4 years, he will make $20 million more than he would have if he signed the original offer. But he’s out $28 million, so he’s at a net loss of $8 million!! And this assumes he was offered $30 million per year, because if he turned down $33 million, it looks even worse!

I’m assuming that the two signing bonuses are about the same, since the way they’re talking about the contract value ($140M, $175M, etc) it all works out the same.

Please chime in because I must be missing something.

My only thought is that perhaps the two sides are further apart than we know and this isn’t just about length of contract. To get back the money he lost, I mean just to break even, he’s need a contract that averages $37 million per year and obviously break even isn’t good enough or he would have signed the first deal offered.

I think that Dak’s agent wants $40 million per year - this has actually been reported. If he gets $40 million or $42 million per year, yeah, his agent’s tactics do indeed make sense.

So, bonus question for those who day “sign Dak now”, are you still for signing him at $40 million per year?

Thiughts are appreciated!!

 

[shabazz]

He and his agent want to have Jerry by the throat

 

[TheSkaven]

He and his agent want to have Jerry by the throat

How exactly does having Jerry by the throat help to recuperate $28 to $30 million in lost revenue? Does he ask for $40 million or bust?

 

[glimmerman]

Both sides have came out and said Daks side never asked for 40 a year. He will lose money if the reports are right. Unless the actual numbers are off. I heard JJ and SJ lowballed him on the first offer. If 35-36 is in the table then Dak should take it. My guess is that in order to make up the loss for Dak then the deal needs to be a 3 year deal so he can go back to the table after mahomes gets his deal. In 3 years you will see 40+ per year for a franchise QB. Daks agent sucks.

 

[HungryLion]

Playing last year for only 2 mil was a very risky strategy.

I assume he is banking on the salary cap
Being significantly higher in a few years and will make up the lost income on the back end, which is the reason he wants a shorter deal (reportedly).

we shall see if that ends up working out.

 

[Rayman70]

heres how the math adds up. You either pay the man, or we will not win 5 games this year. That's what is at risk here. I'm not sayin pay him 40 mil per, I'm saying, just get the years right, give him around 36 mil per, and be done with it.

 

[Rayman70]

He and his agent want to have Jerry by the throat

lmao LOVE THIS ^

 

[Eanwen]

I don't this thread adds much because it's based on the same assumptions all the other threads are based on: that the rumored contracts are/were in any way real.

The only thing that has been consistent is that Dak wants less years on his contract than the Cowboys want him to sign to.

 

[darthseinfeld]

Sorry to create another Dak thread, ladies and gentlemen, but I believe that this one will add value to the public discourse.

Can one of you math geniuses help me to understand the Dak Prescott / Todd France negotiation strategy? Because for me, the numbers are not adding up.

I tried to provide links to source everything mentioned below.

In the summer of 2019, the Cowboys offered Dak a deal in the $30 million per year range. Some outlets report that he was actually offered $33 million per year.

He rejected the deal and instead played out the final year of his rookie contract, in which he earned $2.025 million dollars. This is about $28 million in lost earnings for 2019, or $31 million if the Clarence Hill report is correct.

According to reports, there is a new offer in the table now. It’s a $175 million dollar deal which pays Dak $35 million per year.

Dak has rejected this offer as well. If no deal is done, he will play on the franchise tag which will pay him $31.4 million dollars, a difference of $3.6 million dollars.

Can someone please help me understand this negotiating strategy and why it makes financial sense? That’s not even mentioning the enormous risk Dak is taking that he could get injured.

Let’s assume first that the Cowboys cave in July and Dak gets $35 million per year over 4 years. That means he’ll earn $5 million more than he would have if he signed the deal offered in August 2019.

Over the lifetime of the contract, 4 years, he will make $20 million more than he would have if he signed the original offer. But he’s out $28 million, so he’s at a net loss of $8 million!! And this assumes he was offered $30 million per year, because if he turned down $33 million, it looks even worse!

I’m assuming that the two signing bonuses are about the same, since the way they’re talking about the contract value ($140M, $175M, etc) it all works out the same.

Please chime in because I must be missing something.

My only thought is that perhaps the two sides are further apart than we know and this isn’t just about length of contract. To get back the money he lost, I mean just to break even, he’s need a contract that averages $37 million per year and obviously break even isn’t good enough or he would have signed the first deal offered.

I think that Dak’s agent wants $40 million per year - this has actually been reported. If he gets $40 million or $42 million per year, yeah, his agent’s tactics do indeed make sense.

So, bonus question for those who day “sign Dak now”, are you still for signing him at $40 million per year?

Thiughts are appreciated!!

Because he would have signed an extension. The contract would have started this season. He would have gotten the bonus money in 2019, but he didnt lose any money not signing an extention last year. He made something like 40 million in endorsements. He wasnt in a position where he getting that signing bonus money in 2019 was important to him

 

[John813]

Playing last year for only 2 mil was a very risky strategy.

I assume he is banking on the salary cap
Being significantly higher in a few years and will make up the lost income on the back end, which is the reason he wants a shorter deal (reportedly).

we shall see if that ends up working out.

Wonder if he signed an insurance deal on a career ending injury last year?
Similar to what college players do.

 

[DandyDon52]

He made something like 40 million in endorsements

Prescott has taken out loss-of-value and disability insurance policies that will compensate him in the event of a career-ending injury.Taken together, Prescott’s endorsement deals and insurance policies are worth more than $50 million, ESPN reported, citing league sources familiar with the matter.

So the insurance is a big part of that total, I didnt think there was any way dak could have made 50 million
on endorsements.
I think he made probably 5 mil or so, and it isnt all up front it is a yearly payout, that could go away
if the sponsors pull out.

 

[jaythecowboy]

Prescott has taken out loss-of-value and disability insurance policies that will compensate him in the event of a career-ending injury.Taken together, Prescott’s endorsement deals and insurance policies are worth more than $50 million, ESPN reported, citing league sources familiar with the matter.

So the insurance is a big part of that total, I didnt think there was any way dak could have made 50 million
on endorsements.
I think he made probably 5 mil or so, and it isnt all up front it is a yearly payout, that could go away
if the sponsors pull out.

Dak wasn't top 10 on this highest endorsements list for 2019 and #10 was Matt Ryan, receiving $5 million a year in endorsements. That means Dak at most is around $5 million a year but I haven't seen a solid number. A lot of people have misread that ESPN article (or read misleading headlines from other outlets regurgitating the ESPN article) and think Dak made $50 million in endorsements. Some people even think he makes $50 million a year in endorsements.
https://opendorse.com/blog/top-10-most-lucrative-nfl-endorsement-deals/

 

[DandyDon52]

Dak wasn't top 10 on this highest endorsements list for 2019 and #10 was Matt Ryan, receiving $5 million a year in endorsements. That means Dak at most is around $5 million a year but I haven't seen a solid number. A lot of people have misread that ESPN article (or read misleading headlines from other outlets regurgitating the ESPN article) and think Dak made $50 million in endorsements. Some people even think he makes $50 million a year in endorsements.
https://opendorse.com/blog/top-10-most-lucrative-nfl-endorsement-deals/

yeah that is what I thought, or that he made 50 mil last season lol.
I dont think any player makes more than like you said 5 mil a year.
So dak is probably around 4 mil, and that could even be adding up 5 year deals, so hard to say
what he actually makes per year.
Could be around a mil a year.

 

[DFWJC]

Because he would have signed an extension. The contract would have started this season. He would have gotten the bonus money in 2019, but he didnt lose any money not signing an extention last year. He made something like 40 million in endorsements. He wasnt in a position where he getting that signing bonus money in 2019 was important to him

Dak makes about 3.5-4.5 mil per year in endorsements.
He may have signed long term deals that add up to 40-50 mil, but his annual number is less than 10% of that....which is still pretty sweet.

 

[DandyDon52]

Dak makes about 3.5-4.5 mil per year in endorsements.
He may have signed long term deals that add up to 40-50 mil, but his annual number is less than 10% of that....which is still pretty sweet.

well as I quoted earlier, he insured himself if he gets career ending injury, so most of that total of 50 mil
had to be for what he would get if that happened.

 

[DandyDon52]

Also I understand dak wanting his payday, he played 4 years on a cheap rookie deal being a 4th round pick.
But at same time he is being a little too greedy for someone who really hasnt won anything significant.
If there was no cap, then I would not mind whatever he asked for , but there is a cap.

Also due to recent events, the expected big cap increase, I dont think that is going to happen till later down the road in a few years.

 

[glimmerman]

Lol. He makes more endorsements than I will ever make.

 

[Proof]

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.

 

[cowboygo]

Sorry to create another Dak thread, ladies and gentlemen, but I believe that this one will add value to the public discourse.

Can one of you math geniuses help me to understand the Dak Prescott / Todd France negotiation strategy? Because for me, the numbers are not adding up.

I tried to provide links to source everything mentioned below.

In the summer of 2019, the Cowboys offered Dak a deal in the $30 million per year range. Some outlets report that he was actually offered $33 million per year.

He rejected the deal and instead played out the final year of his rookie contract, in which he earned $2.025 million dollars. This is about $28 million in lost earnings for 2019, or $31 million if the Clarence Hill report is correct.

According to reports, there is a new offer in the table now. It’s a $175 million dollar deal which pays Dak $35 million per year.

Dak has rejected this offer as well. If no deal is done, he will play on the franchise tag which will pay him $31.4 million dollars, a difference of $3.6 million dollars.

Can someone please help me understand this negotiating strategy and why it makes financial sense? That’s not even mentioning the enormous risk Dak is taking that he could get injured.

Let’s assume first that the Cowboys cave in July and Dak gets $35 million per year over 4 years. That means he’ll earn $5 million more than he would have if he signed the deal offered in August 2019.

Over the lifetime of the contract, 4 years, he will make $20 million more than he would have if he signed the original offer. But he’s out $28 million, so he’s at a net loss of $8 million!! And this assumes he was offered $30 million per year, because if he turned down $33 million, it looks even worse!

I’m assuming that the two signing bonuses are about the same, since the way they’re talking about the contract value ($140M, $175M, etc) it all works out the same.

Please chime in because I must be missing something.

My only thought is that perhaps the two sides are further apart than we know and this isn’t just about length of contract. To get back the money he lost, I mean just to break even, he’s need a contract that averages $37 million per year and obviously break even isn’t good enough or he would have signed the first deal offered.

I think that Dak’s agent wants $40 million per year - this has actually been reported. If he gets $40 million or $42 million per year, yeah, his agent’s tactics do indeed make sense.

So, bonus question for those who day “sign Dak now”, are you still for signing him at $40 million per year?

Thiughts are appreciated!!

My understanding is that the conversation starts like this: The franchise tag is what is guiding this contract process. Dak under the tag would get the guaranteed $31.409 million for 2020, and should he be tagged again in 2021? The CBA dictates that a twice-tagged player receives a 120-percent bump, meaning Dak's 2nd tag would pay him $37.7 million. That is 69M in 2 years. 34.5M per year is where you begin because all Dak needs to do is play on the tag each year, only sacrificing long-term security. This is why the supposed offer on the table is 35M per year.

 

[TheSkaven]

heres how the math adds up. You either pay the man, or we will not win 5 games this year. That's what is at risk here. I'm not sayin pay him 40 mil per, I'm saying, just get the years right, give him around 36 mil per, and be done with it.

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.