ESPN's Adam Schefter reported the two sides agreed to a four-year, $160 million contract, with a record-setting $126 million in guarantees.
Using a $185 million salary cap, Spotrac projected Dallas to have $25.9 million to spend before news of Prescott's extension.
The Cowboys will inevitably open up a little more flexibility with roster cuts.
The Fort Worth Star-Telegram's Clarence E. Hill Jr. reported in February the team isn't considering releasing Jaylon Smith but could open up $7.2 million if he's designated as a post-June 1 cut. Perhaps Tyron Smith ($5.2 million savings pre-June 1 and $10.5 million savings post-June 1) could be a candidate to go despite his seven Pro Bowl appearances and two All-Pro nods.
At the end of the day, Prescott's contract—while helping—doesn't change much.
Dallas painted itself into a corner by only giving him the franchise tag in 2020. There wasn't really a scenario in which allowing Prescott to leave entirely made sense. Setting aside the necessary money to retain him for 2021, the Cowboys weren't going to have much left over to pursue marquee outside additions.
By lowering Prescott's cap hit by more than $15 million compared to the franchise tender, the front office at least guaranteed it doesn't need to jettison as many players to make the money work for next year.
This probably doesn't make the Cowboys heavy hitters in free agency, though.