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Mailbag: How Do Retirement Cap Hits Work?


So with the recent retirement of Travis Frederick and with him deciding on his own to retire, how come we are still on the hook for his contract. I know we're loyal to him but with it being his decision and his alone, why do we have a cap hit? — TRE MARCHANT / MARYSVILLE, CA

David: It's a good question, and it's something we've seen the Cowboys deal with before, as they had to handle the cost of Tony Romo's retirement, as well. Basically, you have to remember that the money has already been committed. Obviously, Travis Frederick will no longer collect on his contract, but there are still bonuses and other mechanisms in the contract that need to be accounted for. The same as when the team cuts a guy, those accelerate after a retirement. Maybe it doesn't seem fair, since it was Frederick's decision to retire, but that's the way it works.

Rob: Actually, there's not much money the Cowboys could get back even if they wanted to. It's roughly an $11 million hit over two years, but most of it comes from restructure bonuses that they can't get back. But you mentioned the team being loyal, and they are. Just remember how hard Frederick worked to get back from a debilitating illness in 2018. They do get $7 million in space for 2020 by placing him on Reserve/Retired.

If one year is the difference in Dak signing or not, and assuming he only wants four years so that he can hit the market earlier, doesn't not signing for going on two years defeat the purpose and cost him more in the long run -- in both time and money? — GARY BARRETT / LAMPASAS, TX

David: I don't think there's a way to know this answer until several years from now, when we can see the reality of Dak's future. It's true that there's no way to recoup the money he's losing by not signing a deal right now — but we also don't know what deals lie ahead. Kirk Cousins turned down several long-term offers from Washington and instead pocketed $45 million while playing on two consecutive franchise tags. When his second tag expired, he signed a fully-guaranteed, $84 million deal with Minnesota. Today, his career earnings sit at $130 million. I doubt he regrets passing on the early money. It's hard to say right now if it'll work out as well for Dak, so we'll just have to wait and see.

Rob: I understand your line of thinking. I'm not speaking for him, but if quarterback salaries continue to skyrocket, then in his mind it might be worth it to hit free agency in four years if the market-value guaranteed money gets even more astronomical. We've seen this in the NBA with star players signing even shorter deals – like, one year with a player option for two – in anticipation of a major cap spike. Yes, Dak stayed on his rookie salary last year, but he bet on himself and had a career season. Even if he ends up playing on the franchise tag this year, that's $31.5 million guaranteed. Not exactly pennies.

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