Jets general manager Joe Douglas disclosed in an appearance on #PFTPM last week that the team is renegotiating the contract of newly acquired quarterback Aaron Rodgers. The Packers dealt the four-time NFL MVP and a 2023 fifth-round pick to the Jets shortly before last April's NFL Draft for a 2023 second-round pick, a 2023 sixth-round pick, a conditional 2024 second-round pick and a swap of 2023 first-round picks. The 2024 second-round pick becomes a first-round pick if Rodgers takes at least 65% of the Jets' offensive snaps this season. The Packers moved up two places to the 13th overall pick while the Jets dropped to the 15th spot.
"We knew at the end of the trade that Aaron and Green Bay needed to work some things out. We didn't know the exact ramifications," Douglas said. "It was just important to us that the cap number wasn't going to go higher than it was at the time that we agreed to it. We didn't know that it was actually going to go down to the minimum, so when they re-did the deal, you know, we saw the new number, knew that we saw that it was low for this year. We're still working on restructuring aspects of the deal as we speak, but we feel we're in a really good place."
Rodgers' 2022 contract
Rodgers became the NFL's first $50 million per year player in March 2022. He signed a contract widely considered to be $150.815 million over three years although there were two additional below-market years (2025 and 2026) in the deal.
The Packers used one of the NFL's more complex contract structures with Rodgers. The deal had the seldom used double option bonus structure.
Initially, Rodgers' 2023 base salary was a fully guaranteed $59.465 million. A $58.3 million payment was required to exercise an option for Rodgers' 2025 contract year worth $20.9 million to drop his 2023 base salary to a fully guaranteed $1.165 million. Rodgers was scheduled to make $59.515 million in 2023, which also included a $50,000 workout bonus. The window to exercise this option was the first day of the 2023 league year (March 15) until a day before Green Bay's first 2023 regular-season game in September.
From a salary cap standpoint, the presumption is option years will be picked up. Option bonuses are prorated over the life of a contract (up to a maximum of five years), including the option years, beginning in the league year when the option is exercised. This meant the $58.3 million option bonus was prorated on the salary cap at $14.575 million annually from 2023 through 2026.
The contract's second option was in 2024. Rodgers had a $49.25 million 2024 base salary that was guaranteed for injury at signing. This $49.25 million would have been fully guaranteed on the fifth day of the 2024 waiver period (five days after Super Bowl LVIII) on Feb. 16. A $47 million payment was going to be required to exercise an option for Rodgers' 2026 contract year worth $15.05 million to drop his 2024 base salary to a fully guaranteed $2.25 million. The window to exercise this option was the first day of the 2024 league year until a day before Green Bay's first 2024 regular-season game.
Rodgers' adjusted deal
Rodgers' contract needed to be adjusted prior to the trade to prevent the Packers from having adverse salary cap consequences. The Packers were comfortable with having a $40,313,570 salary cap charge in 2023 because of the trade consisting of $7,673,570 in pre-existing bonus proration from previous Packers contracts and $32.640 million in roster bonus proration from Rodgers' fully guaranteed $40.8 million 2022 roster bonus.
The Packers renounced their rights to exercise the option for the 2025 contract year so the $14.575 million in proration from the $58.3 million option bonus wouldn't also be a 2023 cap charge. The Packers would have gotten a cap credit in 2024 for the $14.575 million without this maneuver since they weren't exercising the option prior to making the trade.
The Jets seemed to have been anticipating the first option and the rest of the contract remaining intact based on Douglas' comments where there would have been a $15.79 million 2023 cap hit for Rodgers consisting of the $14.575 million of option proration bonus, his $1.165 million base salary and $50,000 workout bonus. Rodgers' 2024, 2025 and 2026 cap numbers were going to be $32,541,666, $51,141,166 and $45,291,668.
Surprisingly, the $58.3 million option bonus became fully guaranteed base salary in 2024. The $49.25 million injury guarantee in 2024 with the early vesting date next February to become fully guaranteed and the second option were removed from Rodgers' contract. This $49.25 million became unguaranteed 2024 base salary and the 2025 and 2026 contract years were also deleted.
The contract the Jets acquired has Rodgers' 2023 compensation as only his fully guaranteed $1.165 million 2023 base salary and the $50,000 workout bonus. Rodgers is currently counting on the Jets' salary cap for $1.215 million.
Rodgers is scheduled to make $107.6 million in 2024. His 2024 compensation is composed of a $107.55 million base salary where $58.3 million is fully guaranteed and a $50,000 workout bonus. The deal expires after the 2024 season instead of Rodgers being under contract for four years running through 2026.
The most unexpected change to the contract is Rodgers giving up the original 2024 salary guarantee for $49.25 million. The move is reminiscent of Tom Brady forfeiting the skill guarantees with his 2015, 2016 and 2017 base salaries right after the 2014 regular season ended where $1 million was added to each of his base salaries for these years. Brady's injury guarantee remained intact, though.
The simplest thing to do would be use the framework of Rodgers' original deal for the renegotiation. The $58.3 million that was the option bonus could be turned into a fully guaranteed roster bonus.
Voiding/dummy 2025 through 2027 contract years could be added so the $58.3 million would be prorated on the salary cap at $11.66 million annually. Also, 2025 could be a negotiated into a real year with a realistic salary instead with 2026 and 2027 as fake/dummy years in case Rodgers, who turns 40 in December, wanted to play beyond 2024.
The benefit to Rodgers having a fully guaranteed roster bonus is the Jets couldn't recoup any of the $58.3 million for any type of contract breach, including retirement, after the 2023 league year although the salary cap treatment is the same as a signing bonus. As a signing bonus, the Jets would have rights to $46.64 million if Rodgers retired after this season with the inclusion of the standard signing bonus recoupment language in NFL contracts.
The 2024 compensation would be restored to $49.3 million Rodgers was scheduled to make before changes were made to facilitate the trade. Rodgers hasn't committed to playing beyond 2023 but did suggest that he wouldn't be "one and done" in his introductory press conference after the trade.
Just to be on the safe side, it might make sense to put the second option back in place with the lengthy window to exercise in case Rodgers takes a long time in making a decision about a second season in New York. The option could be to exercise a voiding/fake 2028 contract year so the $47 million option bonus would be prorated at $9.4 million each year from 2024 through 2028.
The Jets aren't currently in a position to handle $11.66 million being added to Rodgers' $1.215 million 2023 cap charge. Contracts would need to be restructured or players released because the Jets have $6.713 million in cap space, according to NFLPA data.
The biggest drawback to restoration is the dead money, which is a salary cap charge for a player no longer on a team's roster. The Jets would have to contend with $46.64 million in dead money with Rodgers only playing one season for the franchise. The dead money would be $72.58 million if Rodgers played two seasons with the Jets. There are ways where the dead money could be spread over two years rather than being taken completely on the 2024 or 2025 cap depending on whether Rodgers ended his football career after the 2023 or 2024 season.
The Drew Brees approach
It's an uncharacteristic move for Rodgers to give up the 2024 salary guarantee considering maximizing career earnings with player-friendly contract structures has been a priority for him. The deals he signed in 2013, 2018 and 2022 each made him the NFL's highest-paid player.
Drew Brees drove a hard bargain in contract negotiations with the Saints until the latter stages of his career. The future Hall of Fame quarterback gave the Saints a financial break for the first time in his numerous contract dealings with the franchise in 2018 when he was 39 instead of exploiting his leverage by exploring potential options with other teams. Brees signed a two-year, $50 million contract with $27 million fully guaranteed to remain in New Orleans after limiting negotiations to just the Saints. He was the NFL's seventh-highest paid player by average yearly salary at $25 million per year in 2018.
The final contract signed Brees during his 20-year NFL career as a 41-year-old in 2020 was also for $50 million over two years. Brees was tied with Brady and Philip Rivers as the league's 16th-highest paid quarterback in 2020 at $25 million per year.
It remains to be seen whether Rodgers will follow in Brees' footsteps by cutting the Jets some slack financially in the renegotiation. Taking $92.5 million over two years for an average of $46.25 million per year would put Rodgers in the same place in the NFL salary hierarchy, seventh, that Brees was in 2020 when the dust finally settles this year with quarterback contracts. Joe Burrow and Justin Herbert, 2020 first-round picks, are in line for top-of-the-market contract extensions from the Bengals and Chargers, respectively, before the regular season starts. The expectation is the Chiefs will revisit the 10-year, $450 million extension Patrick Mahomes signed in 2020 after Burrow and Herbert get new deals.
Rodgers has made $306,692,206 in career earnings from his NFL player contract, according to my calculations using NFLPA data. He is set to pass Brady's record $317,594,794 NFL player contract earnings mark, even if he gives the Jets a steep hometown discount in the renegotiation.