As the old saying goes—“There’s more than one way to slice the salary cap.”
It feels like an annual occurrence when the Dallas Cowboys front office restructures their long-term contracts with players to free up money for the “now” while pushing the hit down the line. Zack Martin and Tyron Smith are usually the usual suspects in this situation. One player the Cowboys have restructured a few times is quarterback Dak Prescott. In the past, some of Prescott’s four-year, $160 million contract has been converted into signing bonuses to help Dallas’ salary cap.
For example, on March 10, 2023, the front office converted $29.2 million of Prescott’s 2023 salary into a bonus that freed up $22 million of cap space. However, entering 2024, their franchise quarterback will be carrying a nearly $60 million hit against the cap, which could handcuff the front office from adding players in free agency or re-signing their own.
All Cowboys fans know that number cannot stay where it is entering the offseason. The evident and likely choice will be for Dallas to extend Prescott with a new contract. Depending on the terms, it allows more flexibility for the front office to work the cap in their favor while Prescott gets paid like a top-tier NFL quarterback—it’s a win-win.
However, it’s come to light that an extension is not the only scenario in which the Cowboys can lower the second-highest cap hit in the league for next season. Michael Gehlken of the Dallas Morning News has pointed out there’s more “financial flexibility” with Prescott’s current contract than meets the eye.
He notes that in 2022 and 2023, the Cowboys utilized an ‘automatic conversion’ where they converted salary into a signing bonus which is then spread over the life of the contract (for up to five years). Prescott’s contract has void years for 2025 and 2026, which help absorb that converted bonus money. This option is once again available to the Cowboys without any input from Prescott.
Prescott is owed a $29 million salary in 2024. Hypothetically, the Cowboys have the sole discretion to reduce his salary to as low as $1.21 million. The $27.79 million reduction would be paid to Prescott as a bonus and become evenly distributed across the 2024, 2025 and 2026 salary caps.
At $59.46 million, Prescott is now slated to have the second-highest cap hit of any player in 2024, trailing only Cleveland Browns quarterback Deshaun Watson at $63.98 million. If the Cowboys convert the maximum amount of Prescott’s salary into a signing bonus, Prescott’s new number would be $40.93 million, the seventh-highest cap hit.
Dallas can create up to $18.53 million in 2024 cap space through an automatic conversion.
Putting things in plain English with the details listed above, if the Cowboys don’t want to offer an extension to Prescott, they have the complete control to convert a chunk of his 2024 salary into a signing bonus as they’ve done before, and the cap hit then gets spread over the next three seasons.
Freeing up almost $19 million in cap space is better than nothing if the front office wants to see how the year plays out for Prescott and head coach Mike McCarthy, whose futures are tied at the hip. Given the lack of playoff success, it’s opened the door for the fanbase to question whether or not No. 4 is the guy to get their team back to a Super Bowl.
If owner Jerry Jones wishes to hit the hard reset button in 2025 if the upcoming season doesn’t meet expectations, this would be the best route. While people might like the sound of this path, it is a dangerous game.
Dak Prescott has proven to be one of the best, if not the best, players in his position in the NFC during the regular season. He was at the top of the MVP conversation just before the game in Buffalo against the Bills. Prescott obliterated the offseason narrative around him being a “turnover-prone” player by leading the NFL in touchdown passes with just nine interceptions.
The contract extension Prescott and the Cowboys agreed to in 2021 included a no-tag and no-trade clause. That gives all the leverage for the quarterback to walk away in 2025 as a free agent, and Dallas could do nothing about it except offer him an extension. By then, there could be bad blood between both camps, souring any reunion potential.
There’s enough history to show finding a franchise quarterback is hard enough in the NFL if a team isn’t picking in the top five of the draft, and even that’s never a guarantee you land one.
If Dallas decided not to extend Prescott, they could easily win ten or 11 games with this roster, lose in the divisional round of the playoffs, and sit with a first-round pick in the late 20s. That’s not within the same zip code of landing a top quarterback prospect in the 2025 draft without selling the farm to get one.
The point is this—Dak Prescott should not be going anywhere, and the team would be wise to sign him to a long-term deal this year. It accomplishes the ultimate goal of lowering the cap and is a sign of good faith in the Prescott-Cowboys relationship. It would also send a positive message to guys like CeeDee Lamb and Micah Parsons, knowing the franchise will take care of them when it’s time for extensions.
Not extending Prescott would open a new can of worms before the Cowboys even land in Oxnard, California, and put even more pressure on an already thin-ice situation.