The franchise tag extension deadline has come and gone. While a long-term contract between Dak Prescott and the Dallas Cowboys seemed to make sense for all parties involved, the two sides weren't able to come to terms. Prescott will play out his $31.4 million franchise tag for the 2020 season before we go through all of this again next offseason. The Cowboys will be unable to sign their quarterback to an extension for the remainder of the league year.
This decision doesn't impact solely the 26-year-old and his employers. The Prescott news, in fact, affects teams and players around the league both now and in the offseason to come. Let's cover some of those winners and losers in light of Wednesday's news:
Losers: Us
The most likely scenario for Prescott's 2020 season is that he plays well enough to keep the Cowboys competitive without winning an MVP or the Super Bowl. If that happens, we're going to have all the same debates about Prescott we were having this offseason next year too. Chances are that the people who are skeptical about Prescott now are still going to be skeptical of Prescott 12 months from now.
I've already established my stance on this topic, and unless Prescott delivers a disastrous 2020 campaign, it's not going to change.
Loser: Deshaun Watson, QB, Houston Texans
Watson is going to do just fine, but the smartest thing for him to do this offseason was wait for Prescott and Patrick Mahomes to sign extensions before working on his own deal with the Texans. The nature of the 12-year contract Mahomes inked with the Chiefs makes it a difficult comparable for Watson, who reportedly wants to sign a short extension with the Texans.
With that in mind, a Prescott deal was likely to set the table and raise the stakes of a Watson extension, as is often the case when we see quarterbacks sign extensions during the same offseason. Last year, Carson Wentz signed a four-year, $128 million extension with the Eagles in June. Three months later, Jared Goff's four-year extension with the Rams came in at $134 million. If Goff had signed his deal first, Wentz's contract likely would have been larger. Prescott had a July 15 deadline because of the franchise tag and Watson did not, so the prudent thing was to wait.
With no Prescott contract, Watson will be negotiating off those Goff and Wentz deals for his extension. After adjusting for cap inflation, Goff's deal comes in at four years and $141 million, which is $35.3 million per year. Prescott's contract would have likely been around $36 million per season, which might have gotten Watson up to $37.5 million. In his time as Houston's general manager, Bill O'Brien has focused more on signing the players he wants to keep around than getting the best possible price for those guys, so Watson might end up earning that much anyway. But this probably cost Watson a few million dollars.
Losers: The Cowboys
This doesn't do the Cowboys any favors. For one, unless Prescott totally bombs in 2020, his price is only going to increase. History tells us that quarterbacks only get more expensive with each passing year. Watson is likely to sign an extension this offseason, and Prescott will be able to negotiate off that deal next offseason. The salary cap, which typically rises every year, also makes it so that player salaries grow each season.
Things could be different in 2021, but that's going to hurt Dallas more than it will hurt Prescott. As I mentioned in May, the salary cap in 2021 might shrink as a result of a reduction in local revenue. The NFL and NFL Players Association are in negotiations to try to smooth any possible cap reduction by spreading it over several years, but there's no guarantee the two sides will come to an agreement.
The problem for the Cowboys is that while their cap number is tied to revenue, Prescott's cap number for 2021 is tied to his 2020 salary. If they can't get Prescott to sign a long-term extension next offseason, they'll be forced to either let him leave for nothing more than a possible third-round compensatory pick or pay him $37,690,800 for the 2021 season. The price tag would be the same regardless of whether Dallas uses the franchise tag or transition tag to retain Prescott, so there's little reason for the team to choose the latter option.
If Prescott's number rises while the cap falls, the Cowboys could be in an extremely vulnerable position this time next year. The league's standard salary cap in 2020 is $198.2 million, and Dallas was able to roll over $19.5 million in unused space in 2019 for a total of $217.7 million. Prescott's one-year, $31.4 million franchise tag amounts to 14.4% of the team's cap.
The Cowboys are set to roll over about $10 million in cap space into 2021, but the cap could shrink dramatically. If that happens, Prescott's deal could be far more difficult to absorb. Here's how much of the cap Prescott's contract would occupy under various cap situations and how much that translates to in 2020 dollars:
In other words, if the NFL announces that its cap for 2021 will be $150 million, the $37.7 million the Cowboys would have to pay Prescott next year would feel more like paying him $51.3 million under their current cap situation. If the cap gets squeezed and the Cowboys can't get a deal done with Prescott next offseason, they'll need to do serious work to try to create cap room.
Prescott also will be one year closer to true unrestricted free agency by the time the organization has its next shot at trying to make a deal work, which will leave it in a more difficult negotiating position. NFL contracts are about leverage, and when players can get multiple teams to negotiate against one another in free agency, it produces a bigger contract than what those same guys would get when they're able to negotiate with only one team. With Prescott one offseason from having a handful of teams as possible negotiating partners next spring, the Cowboys will be under more pressure to get a deal done before they hit 2022.
Winners: Teams in the QB market in 2021 or 2022
The salary-cap squeeze and the inability to do a Prescott deal could create a dream scenario for teams looking to add a quarterback of Prescott's caliber over the next two years. I strongly doubt the Cowboys would give up and let Prescott leave in free agency after the 2020 season out of cap concerns, but with his third franchise tag set to cost Dallas an unreal $54.3 million in 2022, they probably wouldn't be in a position to keep him after 2021 if he simply refused to sign a long-term contract. (They could use the transition tag in 2022 and offer Prescott $45.2 million, but as was discussed when Kirk Cousins approached a third tag, a transition tag doesn't make sense.)
The threat of losing Prescott before the 2022 season for no more than a compensatory third-round pick in the 2023 draft and paying him more than 20% of its cap next year could encourage Dallas to trade Prescott in 2021 for the best available offer. It would be in line to get much more than that third-rounder, although it probably wouldn't be able to get the two first-rounders that would come as a return for a non-exclusive franchise tag. A Prescott deal would likely include one first-round pick and another asset.
By my count, half the league wins here, because there's at least some chance those teams will be in the market for a new quarterback over one of the next two offseasons. That group includes:
Teams whose current starter is projected to hit free agency: Buccaneers, Colts, Patriots, Saints
Teams whose current starter could retire or lose his job with subpar play: 49ers, Bears, Panthers, Raiders, Steelers
Teams that could move on from their young starter by the end of 2021 if he doesn't live up to expectations: Bills, Broncos, Browns, Giants, Jaguars, Jets, Washington
Of course, some of those teams won't end up needing a quarterback, but there should be plenty of organizations that would be interested in trading for Prescott in 2021 or signing him as a free agent in 2022. Projecting which teams will have cap space in 2022 seems like a fool's errand, but if we assume that the cap will constrict in 2021 and want to focus on those that would still have cap space and a need for a quarterback, three teams come to mind ...
Winners: The Colts, Jaguars and Patriots
These three are each projected to have more than $75 million in cap space in 2021 if the cap stays stagnant at $198.2 million. Even if the cap falls to $160 million, they would each have at least $37 million in room if they wanted to pursue Prescott. The Jaguars also have an extra first-round pick from the Jalen Ramsey trade, which would seemingly give them the biggest war chest of assets if they wanted to try to make a trade with the Cowboys. (This assumes that the Jaguars won't be in a position to draft Trevor Lawrence or another quarterback they like with a top-three pick.)
The Colts and Patriots both have veteran quarterbacks on one-year deals. It seems likely that Philip Rivers is in one of the final years of his career, but there's another quarterback who expects to play for a while ...
Loser: Cam Newton, QB, New England Patriots
While the marriage between Newton and the Patriots is great for both parties, what happens after this season is still up in the air. The Patriots have the ability to franchise-tag Newton if they're so inclined, but the former MVP's injury history could cause Bill Belichick to hesitate in offering Newton a long-term deal.
If Prescott is available via trade, New England might prefer to give up a first-round pick and sign up for a higher-floor, lower-ceiling option like Prescott on a multiyear deal as opposed to Newton. The Patriots also would likely recoup a compensatory pick if Newton left and signed somewhere else in free agency after an impressive season in New England. The chances of all of this coming to pass seem slim, but then again, who would have suggested one year ago that Tom Brady would be on the Buccaneers?
Winners: The rest of the NFC East
While the Cowboys are Super Bowl contenders this year with Prescott in the lineup, the best thing that could happen for the Eagles, Giants and Washington would be to see Dallas lose its star quarterback for free. What happened on Wednesday pushes Prescott and the Cowboys closer to a divorce.
Washington knows all about Dallas' predicament, having franchised Cousins twice before letting him hit free agency. Daniel Snyder's team was 26-30-1 (.465) with Cousins as its starter; while that's not championship football, the organization has gone 10-22 (.313) since, even while trading a second-round pick for Alex Smith and using a first-round choice on Dwayne Haskins.
The team couldn't have anticipated what would happen with Smith, of course, but it has become clear that it would have been better off by sticking with Cousins, who has been an above-average quarterback in Minnesota.
Winner: Dak Prescott
The man deserves to be appropriately compensated for his skills. The Cowboys have spent the past year arguing about how he needs to take the deal they're offering on their terms as if they have a long-term alternative. These are the same Cowboys who settled on Prescott in the 2016 draft only because their attempts to draft Paxton Lynch and Connor Cook earlier in the draft failed. The same Cowboys have paid Prescott $4 million over the past four seasons when lesser quarterbacks such as Cousins ($97.9 million), Matthew Stafford ($96.2 million) and Joe Flacco ($76.8 million) have made many multiples more over the same time frame because their earnings weren't restricted by a rookie cap. There's a legitimate argument to be made that Dak Prescott was the most underpaid man in America over the past four years.
Adam Schefter outlines how rare it is for an NFL quarterback to play a season on the franchise tag and what this means for Dak Prescott's future with the Cowboys.
Prescott should have the ability to play for a team that values him like a true franchise quarterback and pays him accordingly. Prescott has to run the risk of suffering a downturn in play or a serious injury over the next year, but he has played at a high level for the vast majority of his career and has never been on the injury report. (A Dallas team that lived through a decade with the brilliant but frequently injured Tony Romo as its quarterback should appreciate how valuable Prescott's availability has been.) If this negotiation really fell apart because the team wasn't willing to give Prescott a four-year deal, it's an organizational failure. The Cowboys need Prescott more in the short and long term than Prescott needs the Cowboys.
Loser: Dak Prescott
And yet, it has to be disappointing for Prescott's camp that this deal didn't get over the line. He will have no shortage of suitors if he does hit the market next year, and the $31.4 million he'll earn this year gives him the sort of life-changing money he didn't make on his previous deal, but playing quarterback in the NFL is an inherently risky job. The respect of being treated like a franchise quarterback might mean more than the money when the difference amounts to $175 million from the Cowboys or $190 million from the Cowboys and a second team over the next five years; but if it was true that Prescott could have locked up $100 million in practical guarantees by signing this deal, it's a lot of money to leave on the table.
Another team will eventually offer Prescott the contract he wants if the Cowboys don't, but Prescott's best chance of having a Hall of Fame career is in Dallas. I ranked the Cowboys' weapons as the third best in football earlier this week, and if CeeDee Lamb lives up to expectations, they are probably the favorites to be No. 1 next year. Offensive lines weren't factored into that analysis, but they have arguably the best tackle (Tyron Smith) and guard (Zack Martin) in football. Prescott isn't a creation of that ecosystem, but precious few teams are going to be able to put as much around Prescott as the Cowboys have so far during his career.
In the end, I wonder if we have two sides still trying to prove something to each other. Maybe the Cowboys still see Prescott as that guy they settled for on draft day and think that they can use all their offensive pieces to mold another midround pick such as Prescott or undrafted free agent such as Romo into a viable starting quarterback. And maybe Prescott still feels like he needs to prove that he is somebody who shouldn't need to settle for a discount or abide by the Cowboys' usual contract structure. This time next year, one of these sides might end up looking like it made a huge mistake. More likely, though, is that we'll just be having this same debate as the deadline approaches on July 15, 2021.