Dak Prescott had a large bird in his hand. He’s got an even bigger one now.
With a reported four-year, $160 million contract from the Cowboys, Prescott will make $40 million per year.
There are two ways to evaluate NFL contracts. One way, which applies when a player signs a new deal with time left on a prior one, looks at the average value of the so-called new money (i.e., the cash to be paid on the extra years beyond the current contract). The other way looks at the total value of the contract from the moment it’s signed.
Agents strongly prefer the new-money analysis, since it generates a higher total average. It’s a bit misleading, however, because there’s no actual extension of an NFL contract. The old contract goes away, and a new one takes its place.
For example, the contract signed last year by Chiefs quarterback Patrick Mahomes has a new-money average of $45 million. That puts him $5 million per year ahead of Prescott. From signing, however, Mahomes’ deal has a value of $39.8 million. At $40 million from signing, Dak has a better deal.
Prescott also has a better deal because Mahomes’ contract runs through 2031. When Prescott’s deal expires, Mahomes will be under contract for seven more years. By then, the market will have changed. By then, Mahomes will be underpaid. Prescott will be getting paid again.
Indeed, some pointed out that the four-year deal given by the Titans to Ryan Tannehill compares favorably to the Mahomes deal. Tannehill’s deal is worth $118 million over four years, $42 million less than Prescott’s.
As recently explained, contracts given to other quarterbacks were ultimately irrelevant to Dak Prescott, because his deal was driven by the leverage that came from the prospect of being tagged again, at $37.68 million in 2021. The Cowboys would have been over, inside, and/or under a barrel in 2022, with the chances of Prescott hitting the open market increasing significantly if he’d been tagged again.
So they gave him a four-year, $160 million deal, and he decided that taking the deal was superior to playing under the tag and seeing what happens next year. The fact that it was superior to the contracts signed by Mahomes and Watson is a collateral question, but it doesn’t hurt.