Breaking Down Dak Prescott's $240M Extension

Michael Ginnitti
Michael Ginnitti, Managing Editor & NFL/MLB ExpertSeptember 09, 2024
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QB Dak Prescott & the Dallas Cowboys agreed to an historic extension at the 11th hour of the offseason, finalizing a 4 year, $240M contract that includes $231M guaranteed for practical purposes. Spotrac dives into the full details of this new deal, which was (aggressively) negotiated by agent Todd France of Athletes First.

The Contract Terms

The new years/new money terms of the deal clock in at 4 years, $240M through the 2028 season. Prescott had $29M remaining on his previous contract (an additional $5M was already paid out in March when a small cap conversion was processed). So in full, this now becomes a 5 year, $269M contract.

The $240M new money value clocks in 8th among NFL contracts, but easily surpasses his own $160M deal as the largest contract in Dallas Cowboys history.

The Average Salary

The new average annual value on Prescott’s deal was always going to start with a “6” thanks to a plethora of leverage. At $60M per year for new year/new money purposes, Dak becomes the highest average paid player in NFL history by $5M. And by keeping this extension fairly short & sweet (also to his benefit), the total value AAV ($269/5 years) remains extremely competitive ($53.8M). For comparison, Joe Burrow’s total value AAV is just north of $44M.

When plugging this AAV into the current salary cap landscape, things actually change a little bit. While nearly every other aspect of this contract ranks 1st all-time, that can’t be said for the AAV % of League Cap metric.

Largest Percent of League Cap at Signing

  1. Joe Burrow, 24.47%
  2. Josh Allen, 23.56%
  3. Dak Prescott, 23.49%
  4. Justin Herbert, 23.35%
  5. Lamar Jackson, 23.13%

In order to surpass Burrow here, Prescott would have needed to sign a new year/new money contract that averaged $62.5M per year. I bet he’s just fine & dandy securing $231M guaranteed instead.

The Guarantees

Prescott’s latest blockbuster includes $129M fully guaranteed at signing, by way of an $80M signing bonus, $1.25M 2024 salary, & $47.75M 2025 salary. This guarantee at signing number ranks 6th in the league, and it’s $17.51M less than Joe Burrow’s $146.5M with Cincy. The $80M signing bonus is an NFL high by $5M.

Largest NFL Signing Bonuses

  1. Dak Prescott, $80M
  2. Jordan Love, $75M
  3. Jared Goff, $73M
  4. Lamar Jackson, $72.5M
  5. Dak Prescott, $66M

Next March 16th, another $40M (his 2026 salary) becomes fully guaranteed, while all $45M of his 2027 salary will lock in on the 5th league day of 2026. Finally, $17M of Dak’s 2028 salary will become fully guaranteed on the 5th league day of 2027. All $102M of this future money is guaranteed for injury at signing, and it brings the practical guarantee value on this contract up to $231M - $1M more than Deshaun Watson’s $230M fully guaranteed. This is very much, not an accident.

Largest Total Guarantee in NFL History

  1. Dak Prescott, $231M
  2. Deshaun Watson, $230M
  3. Joe Burrow, $219M
  4. Justin Herbert, $218M
  5. Trevor Lawrence, $200M

In other words, $231M of Dak Prescott’s $269M total value contract is guaranteed for practical purposes. That near 86% is an elite rating for contracts of this size.

The Cash Flow

After being paid $5M this past March by way of a salary cap conversion, Dak will now reel in an additional $81.25M this season ($80M signing bonus, $1.25M base salary).

The new 2-year payout is $129M ($17.25M more than anyone) else, while the 3-year payout of $169M is $13.75M more than Lamar Jackson.

With the exception of a “little bit of fluff” built into the final season ($55M cash in 2028), absolutely everything about this contract’s cash flow is top of the market. Again - leverage.

The Salary Cap

Prescott entered the offseason with a $59,132,647 cap hit for 2024. Dallas converted $5 million of his base salary into a signing bonus, dropping the figure to $55,132,647. Had Dak played the year out on this figure, it would have represented the largest single season cap hit in NFL history, slightly more than Russell Wilson’s $53M dead cap hit with the Broncos for 2024

The new contract lowers Dak’s 2024 salary cap figure down to $43.3M, freeing up $11.8M of space for the Cowboys. Things get wild thereafter however:

Dak Prescott’s Salary Cap Hits
2024: $43.3M
2025: $89.8M
2026: $68M
2027: $62M
2028: $72M

As you can see, the Cowboys will need to massage this deal quite a bit to keep themselves afloat elsewhere, beginning with the 2025 offseason. A simple base salary restructure next year will open up over $37M of cap space, but the process of pushing cap into future (and voidable) years will once again begin. (Dallas rolled over $40.1M of dead cap from the last deal into this new deal because of bonus proration).

The Clauses

As he did in his previous extension, Prescott secured a full no-trade clause over the entirety of this new contract, affording him about as much control as possible as a player in the NFL.

Also per his previous contract, the new deal contains 4 void years (for salary cap conversion purposes). The void date in 2029 comes after the end of the tag window that offseason, giving him a no-tag clause as well.

The Practical Contract

It’s been awhile since we’ve written about a contract in which the practicality of that contract almost matches the entirety of it - but here we are. Dak has secured early vesting guarantees in ALL FIVE of his future seasons, finishing with a $17M lock on his 2028 salary.

If the wheels fall off, the Cowboys can walk away from this after 4 years - but they’ll owe Prescott a $17M cash payment to do so. The much more likely outcome is that Dak is still Dallas’ best option at QB1 after 2027, and we’re all deep into the next contract negotiation discussion (with a league salary cap well north of $300M by then). Prescott will be 34 years old at this juncture.

It’s clear that a few things were in play here when negotiating Dak’s latest deal:
1) Top out the standard metrics”
2) Usurp the Deshaun Watson guarantee
3) Keep open a path to a 3rd blockbuster extension
4) Regain leverage & control

It’s not entirely clear why the Dallas Cowboys continue to operate in this “last minute” fashion, but it sure does work out well for all players & agents involved.


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