How the Cowboys are restructuring Terence Steele’s contract

The Dallas Cowboys had a rather frugal offseason as the lowest-spending team by more than $50 million, spending an NFL-low $16.5 million in free agency. They waited until the very last moment to give contract extensions to quarterback Dak Prescott and wide receiver CeeDee Lamb.

Now that they have, however, Prescott has become the highest-paid quarterback in NFL history and Lamb is now the second highest-paid non-quarterback in the league. Prescott signed a four-year, $240 million extension for an average annual salary of $60 million and $231 million in guaranteed money. Lamb signed a four-year, $136 million extension for an average annual salary of $34 million.

Cowboys’ salary cap after Prescott and Lamb deals

According to Sportrac, CeeDee Lamb is set to cost $8.75 million against the cap in 2024, which will climb to around $35.5 million in 2025. Prior to Prescott’s new deal, he was set to cost the Cowboys a $40 million cap hit for the 2025 season. Now that he’s signed the extension with bonuses that allow for more than $26 million of his salary to be prorated towards future years, Prescott is set to cost less than $30 million against the cap in 2025.

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The Cowboys currently have $65 million in cap space heading into 2024, with Sportrac estimating that Prescott will continue to cost them more than $55 million against the cap in the current season. If the Cowboys had let him become a free agent, they would have had a dead cap total of $95 million heading into the 2025 season.

Cowboys making moves to clear more cap space

The Cowboys’ next big signing will be an extension for star edge rusher Micah Parsons, who enters into the final year of his contract in 2025, as the Cowboys chose to exercise his fifth-year, $21.3 million option. That deal could end up being as big as if not bigger than San Francisco 49ers defensive end Nick Bosa, who’s currently earning an average $34 million annually.

In order to clear cap space for the 2024 season, which could help with that Parsons deal later, the Cowboys are making moves. They’ve now restructured offensive tackle Terence Steele’s contract in order to create salary cap space.

The Cowboys originally signed Steele as a rookie free agent out of Texas Tech University in 2020. They extended his contract in 2023 when he agreed to a five-year, $86.6 million deal and is now under contract until 2028. The restructure of his contract now opens up $4.5 million in cap space.