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Another early postseason exit has Cowboys Nation up in arms, but with news that Head Coach Mike McCarthy will be returning for the 2024 campaign, the immediate offseason focus turns to QB Dak Prescott. We’ll outline a few options that Dallas possesses with their current QB1 in the coming weeks.

Do Nothing

Prescott is entering a contract year in 2024, set to earn $34M cash against a whopping $59.455M cap hit. This represents 24.5% of the projected $242.5M league salary cap for next season (Aaron Rodgers’ league high $40.3M cap hit in 2023 represented 17.9% of this past season’s cap).

Highest Single Season Cap Hits

  1. Matt Ryan (2022, IND), $40,525,000 (19.4%)
  2. Aaron Rodgers (2023, GB), $40,313,568 (17.9%)
  3. Ryan Tannehill (2022, TEN), $38,600,000 (18.5%)
  4. Patrick Mahomes (2023, KC), $37.1M (16.5%)
  5. Jimmy Garoppolo (2018, SF), $37M (20.8%)

In other words, 24.5% of the league cap would be significantly higher than any team has ever allocated before.

Process a Mini Conversion

There are two elements to Dak Prescott’s cash output for 2024, a $29M base salary, & a $5M roster bonus, set to be paid out March 17th, 2024.

Dak’s contract already contains $36,460,000 of dead cap in 2025 once the contract voids. Any sort of cap conversion will only add to this figure, so if Dallas’ plan may be to move on from Prescott after the 2024 season, they’ll want to tread lightly in this regard.

By converting the $5M roster bonus + $10M of the base salary into a signing bonus, spread out over 5 years (2024 + 4 void years), Dak’s cap hit for next season can drop from $59.455M down to $47.4M, or 19.4% of the projected league salary cap. This maneuver increases the voided dead cap in 2025 from $36.46M to $48.46M. Sounds like a lot (and it is), but keep in mind that the 2025 league salary cap should be in the $260M range, keeping things within compliance from a percentage standpoint.

This option would be the best way for Dallas to manage their roster in 2024 without investing any more guaranteed cash to Dak Prescott.

Process a Full Conversion

If the Cowboys are hesitant to extend Dak this offseason, but still want to maximize their ability to build out a roster around him in 2024, they can process a complete base salary & roster conversion.

This involves lowering his $29M base salary down to a league minimum $1.21M, converting the remaining $27.79M + his $5M roster bonus into a signing bonus.

The move results in a cap decrease from $59.455M down to $33.223M, a savings of $26.2M for the upcoming season. 2024’s pleasure becomes 2025’s pain however, as the dead cap hit waiting when the contract voids has now increased to $62.7M (nearly 25% of the projected salary cap).

This option should only be on the table if the Cowboys are more than likely to extend Dak Prescott before his contract voids (2 days prior to the 2025 league year), but want to wait until the very last possible moment to actually do so (See: The Negotiation Timeline for Dak’s 1st Extension)

Negotiate an Extension

Here’s the thing. Dak Prescott knows a few things that don’t really need to be said out loud.

  1. His current cap hit is a problem for the Cowboys, and must be adjusted somehow
  2. A viable replacement QB is not currently on the Dallas roster (despite Trey Lance’s draft projections)
  3. Based on the void timing & structure of his current contract, if the Cowboys don’t extend Dak this offseason, he will walk into the open market next March - barring an offer that goes above and beyond to prevent him from doing so.

So what does an “above & beyond” offer look like right now? Something like $60M per year, $115M guaranteed, and only 3 new years - allowing Dak to be right back in this situation again before he hits 35 years old.

This is the most expensive option (obviously), but also the most logical one. Dak was a leading MVP candidate for much of the 2023 regular season. The coaching staff may turnover in the next 18-24 months, but it seems unlikely that the QB will as well.

Trade Dak this Summer

It’s only here because it’s an option, & I promised you the options Dallas has available to them. Trading Prescott before June 1st means a dead cap hit of $61.9M (a $2.4M cap loss). So that leaves us with a Post June 1st transaction here.

  • Problem #1: His $5M roster bonus gets paid March 17th
  • Problem #2: 2024 draft picks wouldn’t be included in the trade
  • Problem #3: Dallas would be freeing up $34M in cap space in June, after all of the free agents have been snatched up.
  • Problem #4: Trying to trade a player on an expiring contract who will require nearly $200M from his new team at the last minute doesn’t exactly lead to great return value. Once everyone knows you need to trade a player, you might as well start cutting your asking price in half.
  • Problem #5: Dak is a great quarterback, in a league that requires a great quarterback to win. Finding another great quarterback isn’t something you can just say you’re going to do - and then do.

Concluding Thoughts

Not much left to be said here. Dallas dragged out Dak Prescott’s first go around at a veteran contract and were forced into a truncated, high-cash structure. That’s exactly where things stand again just 3 years later, so the only likely option is a smaller than usual, top of the market QB extension. Dak and the Cowboys agree on a 3 year, $175M extension, with the largest signing bonus in NFL history (Lamar, $72.5M).

Dallas keeps their QB1, frees up significant 2024 cap space, & locks in WR CeeDee Lamb to pair up with Dak for the next 3 years fully guaranteed. It leads to a few cap casualties throughout the roster, but for the most part, this Cowboys group runs things back in 2024, looking to last a little longer in the month of January this time around.