Projecting Cowboys, Prescott extension of almost $300 million in value
I already know what’s going to happen. Casuals are going to have to get it off their chest they don’t want Dak Prescott to continue as the QB of the Dallas Cowboys. Have at it; the rest of us will be over here being realistic about where he stands as an NFL quarterback and what the market looks like.
It’s been predicted for the last several years, but the NFL has been slow on the ballooning of the annual salary cap. Most people, even those in tune with the financial side of the league, had no idea just how detrimental the 2020 year was for the league’s coffers. The projected increase from the new TV deals and gambling revenues haven’t resulted in a big boon, but that all will change in 2024.
And that coincides with the final year of Prescott’s current contract. Timing is everything. Because the Cowboys’ delayed signing Prescott to an extension in 2019 or 2020, he held their feet to the fire and got a no-tag clause in his four-year deal in 2021. That puts him in the driver’s seat during the negotiations which, if they haven’t started yet, will soon. I anticipate a new extension coming next offseason (though it could still drop in 2023), and the way the market seems to be sizing up I anticipate it to pay Prescott over $50 million a season on average.
The pending QB Market
Right now, Aaron Rodgers is the only quarterback over the $50 million annual threshold. Denver’s Russell Wilson is right under that at $49 million per season. At the end of next season, the following star quarterbacks are going to be out of contract: Cincinnati’s Joe Burrow, Los Angeles’ Justin Herbert, Baltimore’s Lamar Jackson and Philadelphia’s Jalen Hurts.
At least one, if not all of these quarterbacks are going to break the $50 million plateau.
Prescott will make at least $50 million because the market dictates that any QB in the top 12 of the league will land at or near the top of the totem.
Look no further than mediocre-at-best to this point of his career Daniel Jones. Sure Jones has upside, but he signed for the same $40 million Prescott averages just two seasons after the Cowboys QB inked his deal.
$50 million is now the baseline for top QBs. Wrap your head around that first, okay?
Caveat: Walking away after 2024
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While analytics confirm Prescott is a top QB, his high variance was an issue in 2022. Certainly his high interception total had a lot to do with the situations the Dallas offense put him in, constantly forcing him to bail them out with spectacularly risky throws to receivers who couldn’t create separation in bad down-distance scenarios.
But still, a repeat turnover performance by Prescott in 2023 could change the team’s thinking about hitching their wagons to him. It is this reason why it would not be surprising to see Dallas take a mid-round QB in April’s draft, to potentially have a bridge QB better than Cooper Rush should the team need to prepare for a divorce.
Clayton Tune, Hendon Hooker, Dorian Thomspon-Robinson all sit as potential guys who with the right seasoning could be in play for Dallas.
Still, that is highly unlikely and more CYA than anticipated course of action. Prescott in all likelihood will be the Cowboys QB for the remainder of the decade and that is more than likely a very good thing.
Other baselines beyond $50 million annual value
There are other baselines that have to be considered when hypothetically structuring a player’s deal. What’s the total value of other’s at the position the agent is going to demand be beaten? What about the total guarantees?
Most importantly, what about the fully guaranteed amount of the deal?
Prescott’s agents will assuredly want to come in above Wilson’s $245 million total value; that goes hand in hand with the $50 million annual value baseline.
There’s a reason several NFL teams were in lockstep (read: collusion) in denying they’d consider Jackson this offseason as the Ravens star sits without a long-term deal and a non-exclusive franchise tag. Cleveland signing Deshaun Watson to a fully guaranteed deal is so above and beyond the rest of the market it’s difficult to right-size other deals.
Watson’s $230,000,000 total guarantees is $65 million higher than the second-highest in Wilsons. His $230 million in full guarantees is at the time of signing is $106 million more than Wilson’s.
To put that in perspective, only Watson and Wilson have contracts where the fully guaranteed portion is higher than that $106 million gulf.
Do all NFL players deserve fully guaranteed contracts? Very big argument for that. Do NFL owners agree with this? Absolutely not.
So the baselines for Prescott, Jackson, Herbert, Burrow and to a lesser degree Hurts (because of a shorter body of work as a franchise QB), is Wilson’s deal.
Prescott’s next deal has to have at least $165 million in total guarantees and at least $124 million in full guarantees at the start of the deal.
Projected Prescott extension, 5 years, $255 million
In this projection, there are two void years (2030, 2031) to allow for bonus proration and future cap conversions.
The average salary of the new money being sent to Prescott would be $51 million, $2 million more than Wilson’s $49 million signed in 2022.
Prescott currently has $34 million of cash due to him in 2024, making the total value of this deal $289 million across six seasons,
Wilson had two years remaining on his deal when traded to Denver, so his five-year extension made it a seven-year deal for $296 million in cash, or $42.3 million on average.
Prescott’s deal far surpasses that at an average of $48.2 million across the six seasons.
This contract would reduce Prescott’s 2024 cap hit from it’s current level of $59.5 million, down to $41.5 million; creating $18 million of space.
Projected guaranteed money
In our deal, Prescott would be seeing a fully guaranteed amount of $125 million.
That would include a $70 million signing bonus (he received $66 million in 2021) and fully guaranteed base salaries for 2024 and 2025, a fully guaranteed 2025 Option bonus and a partially guaranteed 2026 base salary.
Prescott’s total guarantees would be $185 million, as 2026 and 2027 bonuses would guarantee on the fifth day of the prior season and be fully guaranteed for injury.
Year-by-Year cash to Prescott
Total: $289 million
Year-by-Year Cap Hits
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Initially, here’s how the cap hits would be structured, before any of the base salaries would be converted.
Prescott’s current deal has $25.5 million of prorated bonus on both the 2024 and 2025 cap, and another $11 million on the 2026 cap. The latter two are already void years and an extension doesn’t change those hits; in fact an extension keeps the $11 million 2026 hit from accelerating onto the 2025 cap if Prescott were allowed to walk.
2024: $41.5 million (down from current $59.5M)
2025: $50.5 million
2026: $49 million
2027: $54 million
2028: $70 million
2029: $68 million
2030 (void): $12 million
2031 (void): $6 million
Total: $351 million ($289 million in cash, $62 million already on books from current deal)
Here’s a breakdown of how each of those cap hits comes to be:
The $70 million signing bonus spread across five seasons (2024-2028) is $14 million per season. The $40 million option bonus in 2025 spread across five seasons (2025-2029) is $8 million per season. The $30 million option bonuses in 2026, 2027 spread across five seasons is $6 million each, per season.
2024: $25.5M current proration, $2M base salary, $14M new pro = $41.5M
2025: $25.5M current pro, $3M base, $14M new pro, $8M pro = $50.5M
2026: $11M current, $10M base, $22M new pro, $6M pro = $49M
2027: $20M base, $28M pro (14 yr 4, 8 yr 3, 6 yr 2), $6M pro = $54M
2028: $36M base, $34M pro = $70M
2029: $48M base, $20M pro = $68M
2030 (void): (6 yr 5, 6 yr 4)= $12M
2031 (void): (6 yr 5)= $6M
Dallas would have the option to convert any of the base salaries to rearrange cap hits even further, pushing them to the later years of the deal, including into dead money that would hit the 2030 cap after this contract was no more.
Future Projected Caps and Prescott percentages
Here’s where the opening salvo about cap space comes into play.
Before the pandemic, the cap was going up around $11 million a season.
Between 2013 ($123.6 million) and 2020 ($198.2 million), the total increase was $74.6 million, or $10.65 million a year.
But the pandemic caused the 2021 cap to plummet back down to $182.5 million instead of going up to $200 million. 2022 should have been at $211 million but was actually at $208 million and 2023 would’ve been projected at $222 million. This year’s cap is $224.8 million, so it’s relatively close.
It appears the cap is finally ready to make the leaps and bounds previously predicted. Over The Cap is projecting the 2024 cap to balloon to $256 million, and keep rising at these sizable increases each year after.
2024: $256 million
2025: $282 million
2026: $308 million
Keeping that $26 million jump trend going, here are the projected cap limits for the duration of Prescott’s proposed extension.
2027: $334 million
2028: $360 million
2029: $386 million
Prescott’s current 2023 cap hit of $26.8 million takes up just under 12% of this year’s cap. Here’s how the proposed numbers above would fit in to these projected cap totals.
2024: $41.5 million of $256 million; 16.2%
2025: $50.5 million of $282 million; 17.9%
2026: $49 million of $308 million; 15.9%
2027: $54 million of $334 million; 16.1%
2028: $70 million of $360 million; 19.4%
2029: $68 million of $386 million; 17.6%
Keeping Prescott’s cap percentage under 18% for the first four of the six seasons would be a monumental achievement for the Cowboys’ front office. Other top quarterbacks waffle between 18% and 20% starting in Year 3 of their extensions.