The Economics of Prescott's Injury
Dak Prescott suffered a gruesome ankle injury in Sunday’s 37-34 victory over the New York Giants. Prescott suffered a compound fracture and dislocation of his right ankle. He is expected to make a full recovery in 4-6 months. His wallet might not make such a recovery.
Your heart has to go out to Prescott, mine certainly does. Prescott suffered through more adversity in his young life than most people go through their whole lives. Prescott deserved a hefty contract with the Dallas Cowboys. Maybe he still does. But the reality of the situation is that Prescott’s latest injury will certainly cost him millions of dollars and highlights the risk that players take when they quibble over money in contracts.
According to NBC Sports’ Chris Simms, the Dallas Cowboys offered Prescott a five-year deal worth $175 million in the offseason. Prescott turned down the $35 million per year deal and reportedly sought $45 million a year. Prescott opted to sign his one-year franchise tender and playout the season. There are reports from well-respected reporters that Chris Simms’ report is false. According to Ian Rapoport, Prescott never turned down such an offer. Let’s assume such a contract was offered. Even if the actual offer from the Cowboys differed from Simms’ report, Prescott surely was in line for one of the biggest pay days in the history of the league.
LOS ANGELES, CA - JANUARY 12: Quarterback Dak Prescott #4 of the Dallas Cowboys walks off the field after losing the NFC Divisional Round playoff game to the Los Angeles Rams at Los Angeles Memorial Coliseum on January 12, 2019 in Los Angeles, California. (Photo by Kevork Djansezian/Getty Images)
Prescott’s injury highlights the importance of using a cost-benefit analysis when analyzing pro sports contracts. By waiting until the end of the season to negotiate for more money, Prescott risked getting injured and losing millions of dollars in his new deal but also allowed for the possibility of receiving the $45 million per year deal he coveted if his level of play increased.
Prescott proved to be less risk-averse than most people and bet on himself having a career season. And was he ever having a career year. Heading into week 5, Prescott was on pace for over 6,500 yards which would demolish the record set by Peyton Manning (5,477 yards). Prescott combined for 12 touchdowns in the air and on the ground compared to only 3 interceptions in the first quarter of the season. It's safe to say Prescott would have earned a $45 million per year contract if he stayed healthy.
Reports are Jerry Jones still wants Dak to be their quarterback moving forward. I’m sure he does, but most certainly not at $45 million per year. I seriously doubt that the Cowboys will be willing to even offer their latest offer of 5 years $175 million. Dak will have to sign a short term deal to prove he can still play at an NFL MVP level before signing a lucrative contract. Expect a short term deal, potentially even a 1-year deal, for Dak to regain his value.
SANTA CLARA, CA - AUGUST 10: Quarterback Dak Prescott #4 and team owner Jerry Jones of the Dallas Cowboys hug each other during pregame warm ups prior to the start of an NFL preseason football game against the San Francisco 49ers at Levi's Stadium on August 10, 2019 in Santa Clara, California. (Photo by Thearon W. Henderson/Getty Images)
Dak’s situation is unfortunate but serves as a perfect example of the advantages and disadvantages of waiting to sign a contract. If I were Prescott’s agent, I would have strongly urged my client to take the 5-year $175 million contract. I argued during the offseason that Prescott’s camp was making a mistake by refusing to accept the Cowboys’ offer, and I’ll argue it now. I prefer to be risk-averse whenever there is a substantial amount of guaranteed money on the table. Prescott’s estimation of his value looked to be accurate given the gaudy numbers he achieved in his short stint in the 2020 season, he would have received $45 million a year. But the injury risk in the NFL, especially at the quarterback position, is too great to pass up a $175 million offer.
Let’s hope Dak comes back better than ever. We’re all rooting for him.