With the 2018 franchise tag deadline now past, and the start of the 2018 league year approaching, the Dallas Cowboys have officially placed the franchise tag designation on defensive end DeMarcus Lawrence. According to Lawrence’s Twitter account, and multiple interviews in the days since he was tagged, Lawrence has signed the tag and is prepared to play the 2018 season on the one-year deal, which will guarantee the sack artist $17.143 million.
However, the goal of the franchise tag, as the Cowboys use it, is to facilitate the signing of a long-term contract with a cornerstone player they cannot allow to hit the free-agent market and risk losing.
So if Dallas wants to be able to work out a new long-term contract with Lawrence, what might it look like?
When players are tagged with the franchise tag, their long-term extensions are based on two factors, first the franchise tag itself.
If a player plays well on the tag he is likely to be tagged a second time, which is worth 120 percent of the prior year’s tag. In the case of a defensive end such as Lawrence, that value would be $20.572M. This means that over two years on the tag, Lawrence could make $38.715M in full guarantees, a staggering $19.358M per year.
The second factor that comes into play is the contract at the top of the market for a position. In this case, we are talking about the five-year, $85M contract signed by Olivier Vernon in the 2016 offseason. This contract, which gave Vernon $52.5M guaranteed with an average salary of $17M per year to move from the Miami Dolphins to the New York Giants, set the market for 4-3 defensive ends.
Adjusting for the increase in the salary cap from 2016 ($155.3M) to 2018 ($177.2M), the value of that Vernon contract is $19.4M in 2018 dollars. Considering the fact that Lawrence is represented by the same agents that worked Vernon’s contract, they know this.
The pure economic value of DeMarcus Lawrence on a long-term contract is between $19M and $19.5M per year.
If the Cowboys decide to let Lawrence play out 2018 on a tag and then attempt to sign him long-term, the franchise tag base would increase from $38.7M over two years to $45.26M, a staggering $22.6M per year.
With an understanding of those numbers, it would be prudent of the Cowboys to ensure they sign a long-term contract with Lawrence as soon as possible. Considering the fact that reports have stated he is looking for $17M per year, the Cowboys should jump at that opportunity, and even exceed his expectations in order to avoid paying the $19.4M or even $22.6M he could reasonably seek.
I would propose signing Lawrence to a six-year, $106M contract with a $35M signing bonus, and $53M fully guaranteed.
— Joey Ickes (@JoeyIckes) March 7, 2018
With the contract structured this way, the Cowboys would open over $9M in 2018 cap space, while Lawrence is able to secure $36M in cash in the first year of the contract, which is almost equal to two years of earnings on the franchise tag. This deal would eclipse Vernon’s signing bonus by almost 100 percent along with his total guarantees, average salary per year, and total value. Lawrence’s $17.67M per year would make him the highest-paid defensive end in the league by a wide margin, while saving the Cowboys about $10M in the first three years compared to keeping him on the tag.
Additionally, this deal is structured to give the Cowboys standard restructure treatment after the first year to open additional 2019 cap space if necessary, without adding any voidable years to the end of the deal.
Having Lawrence locked up opens up the tag to be used on another player, such as David Irving, Byron Jones, or even Zack Martin in 2019, should there be no long-term answer on those players by that point.
The smart call for the Cowboys is to lock Lawrence up sooner rather than later, and this contract structure should get it done.