Monday, March 9, 2015

Tony Romo's Contract and Salary Cap Insight

There were many critics of Jerry Jones when he awarded Tony Romo a contract valued at 110 million over 6 years with 55 million dollars in guaranteed money, averaging 18 million per season. 2015 that cap hit is scheduled to be a league high 27 million dollars. Many have wondered about the longevity of the contract with an aging player and a bad back. Here is why the contract is much better than you think and how it aligns with the way most NFL teams are working their salary cap in today's NFL.

1. First of all we should discuss the play of Tony Romo. The past 4 years have been the best four year's of his career. In 2014 at age 34, he finished with an NFL best quarterback rating at 113.2, completing almost 70% of his passes. Finally in 2014 he started to get help around him, notably Demarco Murray running the football and a defense that improved under Rod Marineli, still just an average defense. Prior to 2014, the Cowboys ranked nearly last in rushing efficiency as well as defensive ranks. Not many quarterbacks have won in the NFL with a poor defense and poor rushing attack. Tony Romo's career quarterback rating have him as one of the all time best. At 97.6 Tony Romo ranks number two all time, behind Aaron Rodgers and just ahead of Peyton Manning and Steve Young. Not a bad group to be a part of.

2. In 2018 if the Cowboys were to cut Romo, the cap hit would only be 2.5 million dollars. That puts him currently on basically a 3 year contract. He is scheduled to average 21 million over the next 3 years, but that is the cost when you have a quarterback of his caliber. When you add in 2014 where his cap hit was just under 12 million, that makes it essentially a 4 year deal averaging 19 million per year. Alex Smith was recently awarded a contract at 17 million dollars per year. Jay Cutler recently got a deal for 120 million dollars over 7 years, including 54 million the first 3 years. Andy Dalton was recently awarded a deal that paid him 115 million over 6 years. This is a quarterback who has never won a playoff game and many question whether he is the long term answer at quarterback for the Bengals. Jay Cutler is perhaps on his way out of Chicago and Alex Smith was not wanted by his prior team the 49ers. Their are quarterbacks with significantly less ability and statistical success getting paid anyways. It is a quarterback driven league.

3. Flexibility. Soon you will see Tony Romo restructure his contract like many other players do. He will take a signing bonus and move salary forward to future years. The cowboys can create roughly 11 million dollars in cap room through doing this. The goal will be to add cap space now so the Cowboys can put themselves in contention for a free agent to help get them to the next level. Romo will likely also lower his total contract to add more guarantee money to it. He did this last year to create 10 million in cap space. Tyron Smith signed a cap friendly deal that will allow him to do the same thing as well. With Smith it is significantly less risk on this type of deal because he is a younger player.

The Cowboys have not had the success many have wanted in recent years and Tony Romo still has a lot to prove in the playoffs to be more respected by many. However, when looking at the financials of the team, they finally have many players on their rookie deals outplaying their contract. That is a big key to winning in today's NFL. Look at the Seattle Seahawks and the value they have gotten from players like Russell Wilson. The value the Cowboys are getting from their rookie contracts, most notably the offensive line, along with a quarterback playing at a high level with a contract he can restructure, should leave the Cowboys in position to extend Dez Bryant to a long term deal, sign a defensive end or corner back to help improve the defense, and look for a running back in the draft to replace Demarco Murray. If they can avoid a bad contract this off season and make quiet moves while retaining their own talent, the Cowboys will put themselves in contention for the Superbowl the next 3 years.

Cap numbers - http://overthecap.com/salary-cap/dallas-cowboys/
Quarterback stats - http://www.pro-football-reference.com/leaders/pass_rating_career.htm
Romo Contract - http://www.spotrac.com/nfl/dallas-cowboys/tony-romo/






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