Agent's Take: Think getting Tom Brady at a discount is a good deal? Here's a breakdown
The Patriots have benefited from Brady's bargain contracts; here's why, and what a renegotiation might look like
Tom Brady has caused a bit of a stir since the Patriots' loss in Super Bowl LII to the Eagles. It took him more than two months after the defeat to commit to playing the 2018 season, which was surprising because Brady, who turns 41 in August, had been steadfast in his insistence that he is going to play into his mid-40s. Brady hasn't been at voluntary offseason workouts, which started a month ago. He plead the fifth when recently asked if the Patriots appreciate him.
Brady's unwillingness to toe the company line is uncharacteristic because he has dutifully played the role of loyal soldier during his 18-year tenure with the Patriots. Reports have surfaced that Brady is chafing under head coach Bill Belichick's heavy-handed approach to running the team.
According to NFL Network, Brady has expressed a desire for a new contract before the season starts. Patriots owner Robert Kraft stated last month in an interview with The Athletic's Jeff Howe that he was comfortable with Brady's contract, which runs through the 2019 season. He also said he would deal with Brady's contract if it became an issue. Don Yee, Brady's longtime agent, doesn't believe his client's timetable has changed. He expects Brady to play beyond his existing contract.
The ideal scenario in the NFL is finding a long-term quarterback solution through the draft who quickly becomes a starter so his team can stockpile talent and create depth while he's most affordable. The Seahawks nearly won consecutive Super Bowls during the 2013 and '14 seasons, when Russell Wilson, a 2012 third-round pick, was making less than $750,000 per year on his rookie contract. The Eagles currently have a roster-building advantage with 2016 second overall pick Carson Wentz, who is on a rookie contract averaging just under $6.7 million per year. Super Bowl LII MVP Nick Foles, one of the NFL's higher-priced backup quarterbacks, is a luxury Philadelphia can afford because of Wentz's economical rookie deal.
Brady's contract renegotiations since 2013
The Patriots have had the next best thing with Brady, who is arguably the greatest quarterback of all time. Brady started taking a unique approach to his contracts in 2013, when he first renegotiated the four-year, $72 million contract extension he signed in 2010 to make him the NFL's highest-paid player (by average yearly salary). He began consistently giving the Patriots hometown discounts instead of driving the market.
Brady had completed two years of the 2010 extension when he took a big hometown discount during an offseason renegotiation. He freed up $8 million (2013) and $7 million (2014) of salary-cap room for the Patriots by lowering his cap numbers in those years to $13.8 million and $14.8 million.
Depending upon how it was characterized, Brady signed a five-year, $57 million deal or a three-year, $27 million extension (the value of his new contract years). Either way, it was substantially under his market value. He received $33 million, which was fully guaranteed, in the first two years of the new deal instead of the $30 million he was scheduled to make in the remaining two years of his old contract. Of the guaranteed money, $30 million was a signing bonus with a significant portion deferred. Brady received $10 million of his signing bonus in 2013, $15 million in 2014 and the remaining $5 million was paid in February 2015.
The final three years of Brady's pact (2015 through 2017) for $24 million were guaranteed for injury at signing. These years also became guaranteed for skill (without an offset) by him being on New England's roster for the final game of the 2014 regular season.
Brady curiously gave up the skill guarantee of his $7 million, $8 million and $9 million base salaries in 2015, '16 and '17 right after the 2014 regular season ended. In exchange, $1 million was added to each of his base salaries for these years. Since there was only an injury guarantee left in each of the remaining years of Brady's contract, the Patriots weren't required to fund his guarantees. According to league rules, a team must place into an escrow account the amount of any skill guarantees in a contract. The change in Brady's contract gave the Patriots use of $24 million that wouldn't be available otherwise because of the funding requirement.
Brady's contract maneuver only freed up cash, not salary-cap space. In fact, Brady's 2015, '16 and '17 cap numbers of $13 million, $14 million and $15 million went up by $1 million in each of those seasons because of his modest salary increase. Reworking the deal also made it easier for the Patriots to release Brady, as long as he stayed healthy, if his performance declined, which obviously didn't happen.
Brady signed a two-year extension in March 2016 for $41 million running through the 2019 season, when he will be 42 years old. This pact can also be viewed as a four-year, $60 million deal. Before the extension, Brady was making $9 million and $10 million in 2016 and '17, the last two years added in the 2013 renegotiation. He received a $28 million signing bonus while lowering his 2016 and '17 base salaries each to $1 million, $11 million more than he was scheduled to make over this time before the contract adjustment. Half of the signing bonus wasn't payable until March 2017.
Brady's 2016 salary was fully guaranteed. His 2017 salary was guaranteed for injury. It became fully guaranteed on the third day of the 2017 league year, which began that March. Brady's $14 million 2018 base salary went from being completely unsecured to fully guaranteed this past March 16, which was the third day of the current league year.
Quantifying Brady's discount
Brady is underpaid, especially when focusing on the new money he receives through his contract maneuvers compared to what he would have gotten had he played out his 2010 contract, which was set to expire after the 2014 season. There is $71 million of new money over five new contract years for an average of $14.2 million per year.
The chart below details the cash Brady has received over the past five season compared to some of the other quarterbacks who have been on veteran contracts during this entire period.
|2013 cash||2014 cash||2015 cash||2016 cash||2017 cash||Total|
Brady's contract compensation trails every quarterback by a significant amount. Rodgers, who is the closest, has made almost 25 percent more than Brady.
Signing bonus deferrals were taken into account. Otherwise, Stafford would be higher on the list because $16.5 million of the $50 million signing bonus he received from the Lions last August in his five-year, $135 million extension wasn't payable until this past February. Brees would rank behind everyone besides Brady if $12 million of the $37 million signing bonus from his 2012 deal wasn't paid in January 2013. The Collective Bargaining Agreement's daily amounts for participating in a team's voluntary off-season workout program are included in the calculations.
Brady's cap numbers over the five years have also been manageable thanks to him giving the Patriots financial discounts. The following chart outlines his cap numbers relative to other quarterbacks and New England's overall cap.
|Year||Brady salary-cap hit||QB salary-cap ranking||NFL salary cap||Percentage of salary cap|
Brady's approach to his contracts has paid dividends in allowing the Patriots to assemble a more talented roster than they would have otherwise. Brady and the Patriots have gotten two more Super Bowl wins in three appearances since starting the process.
Brady hasn't started a trend among upper-echelon quarterbacks with the discounted contracts, although Brees, at 39, gave the Saints a financial break for the first time in numerous contract dealings with the franchise this offseason. There's a good chance Brees could have become the NFL's first $30 million player on a short-term deal if he'd had a willingness to exploit his leverage by exploring potential options with teams instead of limiting negotiations to just the Saints. He signed a two-year, $50 million contract with $27 million fully guaranteed to remain in New Orleans. The fully-guaranteed amount equals Brees' 2018 salary.
Renegotiating Brady's contract
Quarterback salaries have exploded since Brady's 2016 renegotiation, when he added two contract years (2018 and '19) averaging $20.5 million. Eight quarterbacks have signed long-term deals averaging more than $20.5 million since Brady's extension in March 2016. The Falcons recently made Ryan the NFL's first $30 million player. Rodgers is expected to top Ryan's deal at some point before the Packers start training camp in late July.
The Patriots would be justified in taking a wait-and-see approach with Brady, given his age. Brady is entering unchartered territory. No quarterback has ever performed at an extremely-high level after turning 41. The NFL's history with quarterbacks in their 40s isn't pretty because Father Time is undefeated. Typically, there isn't a gradual decline with older quarterbacks. The decline occurs rapidly, as was the case with Brett Favre and Peyton Manning. Father Time snuck up on both of them like a thief in the night.
However, Brady isn't showing any signs of slowing down. He was named league MVP in 2017 after having the finest season in NFL history for a quarterback after turning 40. Brady threw for a league-leading 4,577 yards while having the third-best completion percentage (66.3) of his career, which was fifth in the NFL. Brady's 32 touchdown passes were third in the league and he also had the third-best passer rating at 102.8.
The Patriots should be extremely grateful that Brady hasn't used the contract leverage he possessed when he had the chance. Brady is scheduled to make $15 million in both 2018 and '19. The $15 million in each year consists of a $14 million base salary and $1 million of game day active-roster bonuses ($62,500 per game). Brady has a $22 million cap number each year.
The Patriots could use Brees' new contract with the Saints as a baseline since he's also defying the odds by playing at an extremely high level when most quarterbacks have already retired. A three-year extension for $75 million which is a series of one-year options running through the 2022 season when Brady is 45 wouldn't be unreasonable under the circumstances. The option on each of these contract years would need to be picked prior to the start of that particular league year.
Of Brady's $28 million in base salaries, $25 million could be converted into a signing bonus while adding a $7.5 million bonus for reporting to training camp this year and a $7.5 million third-day-of-the-2019-league-year roster bonus (early to mid-March next year). Brady's salary in the 2020-22 contract years would be $20 million annually. There could also be $5 million of incentives available in each of the extension years if Brady continued to perform statistically in a similar manner as last year, was named first team All-Pro or the Patriots won the Super Bowl.
With the renegotiated contract, Brady would be making $45 million over the next two years instead of $30 million. If $7.5 million of the $25 million signing bonus was deferred until 2019, his $27.5 million compensation for this year would be $500,000 more than Brees'.
Brady's cap numbers in 2018 and '19 would remain at $22 million with his base salaries getting lowered to $1.5 million. His cap hit in the final three years would remain constant at $25 million because of a $20 million salary and $5 million in annual signing-bonus proration.
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