Cowboys restructure Martin, save $8M; how they may spend it

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Another day, another contract trigger pulled for the Dallas Cowboys. A couple of weeks ago, the Cowboys utilized their usual contract mechanism to create more cap space by restructuring the deal of stalwart left tackle Tyron Smith. The move provides Dallas cap space this season, and if unused it goes into next season, where there will be considerably less cap space thanks to limited or no attendance at games across the NFL.

On Wednesday morning, it has been revealed by Ian Rapoport of the NFL Network the club has done something similar, restructuring the deal of All-Pro right guard Zack Martin.

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Martin’s base salary in 2020 was set to be $11,000,000. Based on the reported savings, it appears the team has moved $10 million from salary to a restructure bonus.

Restructure bonuses are treated like signing bonuses. The player gets the money up front (unless otherwise agreed to), but the cap hit is then spread out evenly across the remainder of the contract, up to five years.

Martin has five years remaining on his extension signed in 2018. That $10 million equates to a $2 million cap allocation each season from 2020 through 2024.

So $10 million off Martin’s base salary, $2 million added to the prorated bonuses and the Cowboys net $8 million in savings.

Why more space when the season is here?

The Cowboys looked to have around $8.5 million of cap space entering the season after the shuffles of placing guys on short-term IR. That number will fluctuate as players move around and is available to sign injury replacements as the season wears on. The majority will be rolled into the 2021 cap, which will have a floor of $175 million.

Prior to the pandemic, many projected the NFL’s cap in 2021 would be around $215 million. Long-term contracts over the last several years have all been structured with that level of increase in mind, so teams are going to have to scramble to create cap room next offseason and that will most likely result in a lot of restructures and the gutting of mid-tier veterans.

If the Cowboys don’t spend the additional cap room, then the money can be used to lessen the blow of what comes next year.

For example, rolling over the $8 million in 2020 savings, and Dallas adding $2 million prorated onto 2021’s cap, would be a net savings of $6 million on next year’s cap and Dallas can again restructure Martin’s deal (and others) to create even more space.

Restructuring contracts is only an issue when a player doesn’t play out his entire contract like when center Travis Frederick retired earlier this year. His prorated deal left a sizable amount of dead money on both the 2020 and 2021 caps.

Outside of those circumstances, restructures are all just funny money; accounting tricks to deal with later what a team has paid for now. Before the world-altering pandemic, it was a sound strategy to pay a guy under the confines of a current years cap and defer taking the cap hit until the cap was much longer (thus lessening what percentage of the cap the contract took up).

Alternative Energy

There is of course the possibility that some or all of the new space is with a specific need in mind.

The Cowboys could be working on a Dak Prescott extension. The rules say a deal cannot be signed until after the season concludes for the franchise tagged quarterback. That doesn’t mean that a new agreement can’t be reached.

Also, Dallas number crunchers know the next several years of cap manipulations ahead of time, and with the confines of next year’s cap reduction, the team didn’t have the cap space to place the next tag on Prescott, in case an agreement isn’t made between January and the start of the new league year.

The Cowboys could also be gearing up to offer an incentive-laden contract to a free agent safety named Earl Thomas after Week 1. Vested veterans (ones with four or more years experience) contracts are guaranteed for the entire year if they sign before the season, but after the first game they can be released with no penalty.

Dallas should still be interested in Thomas because they have a clear void at his position and he’s made his desire to play for his hometown club clear in previous years. But the way Thomas exited Baltimore has to give any club pause that he could cause locker room problems the team would need to be prepared to resolve quickly without worrying about a submarine of their cap.

 

 

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