With Dak Prescott’s deal complete, the Cowboys can finally see light at the end of the salary cap tunnel - The Dallas Morning News

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The process was painstaking.

One year and 12 days before Monday’s resolution, quarterback Dak Prescott’s agent, Todd France, and his then-colleagues climbed the steps of Cowboys owner Jerry Jones’ yacht of a bus, parked outside a Marriott hotel in downtown Indianapolis at the NFL combine.

No progress in negotiations came that day. The conversation was the group’s first tangible exchange in five months. Ultimately, it preceded another several months of unproductive dialogue mixed with total silence.

Finally, with the deal done, the Cowboys can see light in their salary-cap tunnel.

Prescott is now scheduled to count $22.2 million against the Cowboys’ salary cap in 2021. His four-year, $160 million extension affords the team $15.5 million in cap savings relative to a $37.7 million franchise tag he would have carried into the March 17 start of the league year had no contract been reached.

Prescott’s deal better positions the Cowboys to pounce on what projects to be a lame free agency market with many veterans, because of a pandemic-caused dip in the NFL’s salary cap, signing short-term deals worth below normal market value.

Still, the front office seeks additional cap space.

This can happen as quickly as it takes to fire off a couple emails.

While the Cowboys can create roughly $1.5 million in cap room and save $2 million in cash by cutting punter Chris Jones, their most useful method to produce immediate cap space is to activate language already written in their most valuable contracts.

Defensive end DeMarcus Lawrence has this clause. Right guard Zack Martin has it. Left tackle Tyron Smith does and so forth.

The method is widely referred to as an “automatic conversion.” The following is an excerpt of the specific language, extracted from a hard copy of the contract Smith signed in 2017.

It reads: “Player and Club agree that on one or more occasions and at any time during the duration of this Contract, the club, in its sole discretion, shall have the right, but not the obligation, to convert any portion of Player’s Paragraph 5 Salary into Signing Bonus. If it wishes to exercise this right, Club must provide Player with written notice of Club’s election to do so.

“The Letter shall be sent via personal delivery, overnight mail or electronic mail in PDF form to Player and Player’s certified representative. The Letter shall be deemed effective when sent.”

Here is how that looks from a practical sense.

Martin is due an $11 million salary in 2021, the first of four remaining seasons under his contract. The Cowboys don’t need to call Martin’s agent to negotiate or ask permission. They can send an email, notifying Martin and his rep the team has decided to perform a simple restructure of his contract.

Of Martin’s $11 million salary, the team could convert a hypothetical $10 million into signing bonus. The bonus money will prorate against the cap across four seasons, producing $7.5 million in cap space for the Cowboys in 2021.

The $15.5 million in cap savings from Prescott’s contract was a couple years in the works.

Martin can save the Cowboys half of that in a micro-fraction of the time.

Dallas must be strategic when determining with which players to trigger this clause. Pushing money into future salary caps, even when those caps project to balloon because of the NFL’s shared television revenue, can cause future cap headaches, particularly if the player is released or traded before his deal expires.

Prescott’s team-friendly extension allows the Cowboys to be more selective when pivoting now to these decisions.

In Monday’s four-year deal, the team slapped two voidable years at the back of Prescott’s contract. This was done for salary cap purposes; the annual proration of a signing bonus spreads more thinly across, say, five years instead of four.

If the Cowboys seek to add a voidable year to Martin’s simple restructure in the aforementioned scenario, it is believed that maneuver would involve more than a procedural email. His agent would have to sign off on it. And there is no financial reason why he wouldn’t.

The most complicated negotiation that helps the Cowboys’ 2021 salary cap outlook is one they’ve already made.

More on Dak’s new deal

Find more Cowboys coverage from The Dallas Morning News here.

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With Dak Prescott’s deal complete, the Cowboys can finally see light at the end of the salary cap tunnel - The Dallas Morning News
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