For Dorsey and Reid, the time for a tough decision is a scant week to 10 days away. When Bowe officially begins his one game (week) suspension, he can be released, saving the Chiefs around $8.5 million in cap space, according to Mike Florio at NBC Sports. The decision Dorsey makes will have serious impact on the Smith/Houston situation.
When Dorsey and Reid took over the team after the '12 season, they inherited two established players whose contracts were up; Brandon Albert and Dwayne Bowe, and they had only one franchise tag. They felt they had to get one or the other signed. Since Albert was asking for something in the range of Ryan Clady's $15 million per year, they went after Bowe. Unfortunately, in their panic mode, they were far too generous. Due to Bowe's transgression, they have an opportunity to remedy the situation.
Can the Chiefs do without Bowe? A simplistic view of the problem suggests that no, the Chiefs cannot afford to part with Bowe. Avery, Jenkins, and Hemmingway have so far this preseason failed to impress. If you look at the bigger picture, however, yes, parting ways with Bowe may help the team more than hurt it.
I think Dorsey had a plan for this past off-season to possibly get Smith and Houston signed. Releasing Flowers was the first part of the plan. Releasing Hali after this season would have been the second part of the plan. However, the team would need a replacment for Hali. As the '14 draft approached, I predicted that the Chiefs would draft a WR in the first round, followed by an OLB in round three, and a CB in round four. They fooled me. They totally skipped the WR, instead taking an OLB and a CB with their first two picks. As soon as Ford was picked, I assumed that Hali was as good as gone after this season (if they cut him before the end of this season, they'd owe him significant "dead money"). Now, I think that that part of the plan may be changed. It will boil down to whether Houston will decide to take less money than he could get on the open market, or if Hali will seriously restructure his deal. I can't see how the Chiefs can afford both Smith and Hali & Houston. Picking up the cap space created by releasing Bowe should create enough cap space to sign Smith, and probably Hali (if he restructures).
Oh...and as for Smith; resigning him is a no-brainer. He's an above average QB, who we can win with, if we have an OL, and someone for him to throw to. As for Daniels, we're paying him too much. Cut him. By next year, Murray will be our #2 anyway.