Here's how NFL teams like Cowboys beat the salary cap: QB Dak Prescott

5 days ago 2

One of the common misconceptions of NFL fanbases is how easy it is for teams to manipulate their salary cap situations. For years, owners would tell the local media about the difficulty in being able to pay multiple players and they'd happily lap up the sound bites and run and publish articles that misled fans about the way NFL contracts and the cap worked.

Dallas Cowboys ownership in Jerry Jones and his son Stephen Jones still utilize this method to this day, crying about not having enough pie to go around. They are still doing that to this day. Certainly there is a limit to how much they can spend this year, but there are numerous tools at their disposal that allow them to circumvent a single year's cap number. They will once again do those things in 2026, and one of the primary vehicles for that is the contract of quarterback Dak Prescott.

Prescott is, by an egregious margin, the biggest entry on their ledger for next season. This is right because of the importance of the quarterback position, the wide gulf that exists between starters and most backups, and the clear fact that when healthy, Prescott statistics are among the upper echelon of NFL quarterbacks.

Prescott, who signed a four-year extension for $240,000,000 at the end of training camp in 2024, is set to count a mind-numbing $74 million against the Cowboys' cap. The NFL cap for 2026 hasn't been determined, but Over The Cap predicts it will fall around $295.5 million. Prescott is literally over 25% of that number.

But Prescott is actually going to be considerably less than that number by the time the regular season comes around. Here's a quick breakdown into how his cap hit is currently configured, and what options the Cowboys have to do something about it.

Prescott's Current 2026 Cap Hit: $74,068,430

Base Salary: $40,000,000

This is how much Prescott gets paid during the NFL season. Also known as Paragraph 5 Salary (CBA, contract talk), Prescott's base is set to be paid out to him in equal installments. Most NFL deals are structured around the 18 weeks of the regular season, though some players get provisions to pay them across 36 weeks.

Prescott basically makes $2.22 million every week of the regular season.

Signing Bonus Proration: $34,068,430

So here's the first way NFL teams circumvent the cap. Base salaries will always hit a team's cap in the year they are paid. 2026 salaries appear, in full, on the 2026 cap. But teams are also allowed to write various types of bonuses into a contract as well. And bonuses are allowed to cheat the salary cap rule.

The most frequently used one is the singing bonus. This is money that is essentially paid to a player at the time of their signing. Again, sometimes it's written out differently for various players, but the concept remains the same.

Dallas gave Prescott an $80 million signing bonus when pen hit paper. However, the team didn't have to place that $80 million on their 2024 cap even though that's the season they paid the money. Instead, the NFL has a rule where a team spreads the bonus across multiple year's caps; up to five.

How the Cowboys will reduce Prescott's 2026 cap hit

Again, signing bonuses aren't the only tool NFL clubs can use. There's another type of bonus, called a restructure bonus, and that's what Dallas will deploy this spring in order to knock Prescott's cap hit down a substantial amount. They'll do this for several of their top-dollar investments.

The NFL allows teams to take a player's Paragraph 5 Salary, and convert that amount into what's called a restructure bonus. Like signing bonuses, restructure bonuses are also able to be spread evenly across up to five seasons' caps.

Teams can literally just take a player's base salary for that season and "restructure" it, so that the base salary is relatively low, and the rest of the amount owed to the player is mostly pushed off to future year's cap.

With Prescott, his 2026 base salary of $40 million will absolutely be restructured. The NFL has a minimum veteran salary, and for Prescott's tenure that sits at $1.3 million a year. Dallas can convert up to $38.7 million of Prescott's base salary to a restructure bonus.

Prescott is still paid the full $40 million in 2026, but the $38.7 million is spread evenly over multiple years. Teams can even create phony contract years beyond the real years of a deal to stash the cap hit!

Prescott's deal technically expires after 2028, but the club can write in years that will void into the contract, just so that they can amortize the bonus up to five seasons. When Dallas restructures Prescott, 40% of that restructure will be placed on their 2029 cap, a season where he is no longer under contract.

Current NFL contracts are written so that the player doesn't even have to consent to this; teams can do this at any time they need to create more room under the current-year's cap to sign a player, or in this case to get under the cap prior to the start of the new league year.

Pros and Cons of Restructure Bonuses

There are two sides to every coin, and there are pros and cons to restructing a player's deal.

Cons to Restructures

Using void years means that a player will count against a team's cap after they are no long on the roster. Say 2028 is Prescott's final season in Dallas. He'll count against their cap in 2029, though, taking up space for a player who isn't contributing to that current season.

Also, because bonus money has already been paid to the player, it will always come due. Let's say the Cowboys were to release Prescott prior to 2028. Sure they'd save his base salary, but whatever bonus money was set to hit the 2028 and 2029 caps is still due. This is referred to as dead money. If the money was already paid to a player, it must be accounted for at some point.

Pros to Restructures

There are pros, though. Teams can restructure a player's base salary whenever they want to. They also have the flexibility to restructure any amount, and do so multiple times in a given year.

The Cowboys don't have to restructure all $38.7 million of the available portion of Prescott's salary. They can restructure $10 million, spread that over five years and reap $8 million in cap savings for 2026. They can come back after the draft and create another $8 million of space by doing the same scenario. They could do the entire $38.7 million at once and create almost $31 million in space this year, around the amount Dallas is currently over the projected cap.

Also, not only does restructuring and pushing cap hit to future years a team to pay out far more money in a given season than their cap hits, it also allows teams more bang for their buck.

Here's how.

Let's say a team is saving $20 million in the current season and pushing it into next year's cap. For simplicity, we'll just use one future season.

If this year's cap is $300 million, and next year's cap is $320 million, that $20 million takes up a smaller percentage of next year's cap. It allows the team to have that one player, and another $20 million worth of talent in the current season, and because there's no interest accrued on the amount, it basically increases a team's spending power.

Prescott's Coming Restructure Summary

To recap, Prescott's set to enter the second year of this $240 million extension. His base salary is $40 million and his current cap hit is $74 million. The team will be able to restructure Prescott's deal and move as much as $38.7 million into a bonus, which will be spread across the three remaining years of his deal, plus two void years (2029 and 2030) that only exist to stash cap hit.

Converting $38.7 million would result in $31 million of additional cap space. Dallas doesn't have to restructure the entire amount at once, they can do it in phases, as they sign free agents. This increases the amount of cap hit from Prescott, but the team can continue to reduce his base salary in future years.

This article originally appeared on Cowboys Wire: How Cowboys can shave salary cap space restructuring QB Dak Prescott

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